HMOs, PPOs, and Managed Care: ‘Managed Competition’ and Other Lies”

HMOs, PPOs, and Managed Care

“Government Watch: ‘Managed Competition’ and Other Lies”

Copyright Salvatore J. Durante, DDS, FAGD, 1993. Published in GP: The Journal of the New York State Academy of General Dentistry, March 1993.

Our government is on the verge of taking the next step toward assuming total control over health care–its providers, its recipients, and everyone in between who helps make the marvel of modern medicine possible. Socialized medicine is becoming a reality in the United States. It may not be “socialized” in the strict sense that all means of production are owned by the government, but presently over 42% of all services provided are paid for by the government. And it certainly controls and regulates the means by which most of the remaining 58% is paid for: the insurance industry is told whom they can and cannot insure, for how much and for what procedures. Doctors and patients are also strictly controlled, usually by several agencies.

The Clinton administration, like the one before, proposes more government interference as the solution to the problems caused by earlier government interference. Socialism is a failure worldwide, yet American medicine is about to be swallowed by it. The whole sad spectacle is facilitated by three “Big Lies” circulating around the country and one grand error made by doctors.

Big Lie #1: “Managed competition” does not represent the next step toward total government control. This is the best oxymoron to come from Washington in many years. One reason Hillary Clinton was appointed health-care czar is that Clinton’s advisors informed him that it was impossible to combine freedom with government management. A so-called choice among government-approved providers, fees and services within a legislative framework of “universal access,” “global budgets,” and “control of spending”–i.e., mandated benefits, rationing, and price controls–is socialized medicine, plain and simple.

Big Lie #2: Some socialized schemes do not fail; that is, they can provide excellent care to all without snuffing out freedom and innovation. Thirty years ago proponents of this lie offered the Soviet Union as an example of success. Twenty years ago it was England, and ten years ago it was Sweden. One by one, each country’s system inevitably developed into a stifling, stagnant, bureaucratically controlled trap. For many, Canada is the latest showcase for socialized medicine. However, if you check Canadian publications, you’ll find that their experiment suffers the ills that every socialized system must exhibit: overuse leading to rationing, price controls, stagnation, lack of innovation, and patient and doctor demoralization.

Bureaucratic rationing by political force is the hallmark of any government-controlled system. Twenty-four people died in 1989 while waiting for heart surgery in British Columbia. In Manitoba, people wait six months or more for brain and spinal surgery. In Ontario, a woman died after being turned away by 14 hospitals because none had an intensive care bed available. In January 1989, the Hospital for Sick Children sent home 40 children who needed heart surgery. Instruments, supplies and technology are strictly controlled. Washington state–population 4.6 million–has more MRI scanners than all of Canada–population 26 million. Doctors strike periodically, trying to get better treatment for themselves and their patients.

American cities along the border routinely act as “release valves” for the Canadian system. One example mentioned in the January 1991 Detroit News is Heartbeat Windsor, a kind of underground railroad to the U.S., whose goal is to get sick Canadians to the U.S. before they die while waiting on a list. Michael Billet, who runs the service, says “The joke is that the Canadian health system is great as long as you don’t get sick. If you want a basic doctor visit, it’s no problem. It’s when you really need health care . . . a major operation . . . that the system breaks down.”

Big Lie #3: 37 million Americans are completely uncovered by health insurance. This number has been uncritically accepted by many, including the Clinton administration, and used as a call to government action. The truth is much less alarming. The “37 million” figure is an estimate based on a survey for a single point in time. It included many people who were uninsured for a brief period.

As noted in Alan Reynolds’ June 22, 1992 Forbes column, a more accurate picture comes from the 1990 Census Bureau study entitled “Health Coverage 1986-88.” Instead of looking at one particular moment in time, this study looks at 28 months. What it found was that only 4% of all persons lacked coverage for the entire period. That translates into fewer than 10 million long-term uninsured–not 37 million. Furthermore, 27% of these are under 16, while another 23% are between 16 and 25. Most of these are dependents who could be insured through their parents’ plans. The fact that some parents decline such dependent coverage does not mean that they could not or would not pay their children’s medical bills. Another study showed that the highest percentage of short-term uninsured was among those with family incomes above $36,000 a year. The truth is that some people choose not to be insured. However, the government may soon decide that this choice is unacceptable.

These Big Lies and others that suggest the need for greater government control are, unfortunately, accepted by most professional health-care organizations as uncritically as they are accepted by the general public. But professional health-care organizations also accept and endorse, as a moral ideal, an even more deadly Big Lie: that we, as doctors, have a duty to provide care, because the public has a right to health care. This is summed up in the catch-phrase “universal access,” which implies that the government can and should set the conditions under which we are allowed to practice our professions.

By accepting the idea that the public has a right to health care, we give the government all the power it needs to control us: we give it the moral authority to impose whatever regulations it deems necessary. The practical consequences–rationing, price controls, etc.–inevitably follow, as political expediency requires. If you admit that a mugger has a right to $10 from your wallet, you are hardly in a position to argue when he demands $20, then $30, then all your cash plus your credit cards.

We are the victims of this encroaching government bureaucracy, but not the blameless victims: if we do not fight for our own rights, we can hardly expect others to do so for us. Philosopher Ayn Rand referred to the sort of cooperation and compromise routinely practiced by organized dentistry and medicine as the “sanction of the victim.” Without it, the government would have to use naked force if it wanted to control how we provide our services to others. Rand also pointed out the solution: stop pretending that the government is right and just in taking such actions; stop giving it a moral sanction for the sort of interference that it now routinely engages in, and plans to expand.


Politics of Health Care