How will government run our health care?


An excerpt from “Why Government Can’t Run a Business” by John Steele Gordon, from the May 21, 2009 Wall Street Journal:

The Obama administration is bent on becoming a major player in — if not taking over entirely — America’s health-care, automobile and banking industries. Before that happens, it might be a good idea to look at the government’s track record in running economic enterprises. It is terrible.

In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged.

When the plant was finally finished, however — three years after World War I had ended — it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.

Or take Medicare. Other than the source of its premiums, Medicare is no different, economically, than a regular health-insurance company. But unlike, say, UnitedHealthcare, it is a bureaucracy-beclotted nightmare, riven with waste and fraud. Last year the Government Accountability Office estimated that no less than one-third of all Medicare disbursements for durable medical equipment, such as wheelchairs and hospital beds, were improper or fraudulent. Medicare was so lax in its oversight that it was approving orthopedic shoes for amputees.

These examples are not aberrations; they are typical of how governments run enterprises.


One response to “How will government run our health care?”

  1. Don

    Wow. So private insurance companies are bureaucracy-free? You don’t actually believe that, do you? Why can’t the government handle a single-payer system? What is health insurance anyway? Really it’s just a mechanism to pay the bills. How is it that the government can’t do this?

    Think the government has a monopoly on wasteful spending? United Healthcare, that bastion of efficiency, paid its CEO $1.7 billion (with a B) in compensation two years ago. That’s simply indefensible. With leeches like that running the system, it’s not surprising that even with the amount of fraud that exists, Medicare is still cheaper than private insurance.

    In fact, it couldn’t help but be less expensive. The government wouldn’t need to show profits, pay dividends to stockholders, or fund a multi-million/billion dollar CEO compensation package. There is no need for an expensive infrastructure to figure out ways to deny costs. And don’t you think it would be large enough to negotiate lower prices from pharmaceuticals? Think of the purchasing power that Wal-Mart has.

    I suggest that anyone who currently accepts the fears peddled by the private insurance companies read this explanation of what single-payer really means (i.e. not Stalinst death camps):

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