Republicans have been critical of the Obama health care plan, making comparisons to Britain’s and Canada’s health care system, but in fact the Obama plan offers Americans a far inferior system to that of our parliamentary competitors. 

In his most recent post, “Euphemizing the Health Care Debate“, Alex Knepper highlighted some of the weaknesses of the Obama-Dodd-Kennedy plan;

To be sure, our current system is riddled with a seemingly endless list of inefficiencies and problems. We spend more money per-capita on health care than any other nation on Earth, and yet seem to get results that don’t live up to such exorbitant spending. We can get more for less — but not by handing the system over to the federal government. It should be remembered that it is the private sector that created absolutely everything that the federal government is dangling over the heads of voters as goodies. Government cannot create. It can only seize and redistribute wealth that has already been produced. It isn’t an accident that America produces far more new life-saving drugs than Europe on an annual basis. Are we really ready to slay the goose that lays the golden eggs?

The Obama-Dodd-Kennedy health care plan will do very little in the way of reducing costs and increasing competition.   By going the route of creating a massive government insurance program (funded by increased taxation on private businesses and taxpayers), without addressing the cost disadvantages, bureaucracy and inefficiencies in our existing public and private systems, the plan will place the United States further behind nations that have adopted a single payer system.  The McCain 2008 platform would have addressed these concerns, by offering such reforms as allowing Americans to purchase insurance across State lines and replacing the employer tax free exemption with a direct tax credit to individuals and families.  The McCain plan would have empowered families, by eliminating red-tape  and allowing for more choice and competition.   

The British and Canadian governments leverage their single payer systems to cap health care costs and removing the funding burden from private industry.  As an example, in most single payer systems a single government agency negotiates the acquisition and retail costs of non-OTC pharmaceuticals, thus resulting in lower drug costs on consumers and private plans.  The trade off is a lack of access to the most expensive and sometimes most effective pharmaceutical treatments.  A near identical process applies to the acquisition of critical equipment.  In the Province of Ontario, the majority of residents lack access to PET scans for cancer treatment.  Even though the PET scan is the most advanced and accurate method for detecting non-leukemia, lymphoma and other blood cancers, the high cost of acquiring this equipment and the lack of competition in the Ontario health care industry had delayed the availability of this procedure.  Even though residents are suffering from a lack of access to this procedure, it has allowed the government to maintain inflationary costs below the US industry.  Even though this is the least attractive method for maintaining costs, Canada boasts a per-capita of health care funding of 9% of GDP, compared to that of 15% of the United States.      

President Obama is grossly mistaken if he believes he can create a government insurance program that adopts the ‘equal-service for all’ methodology of a single payer system, while maintaining a parallel private sector system.  By retaining the existing, over-regulated and monopolized private sector insurance programs, the federal government will endeavor to compete with an industry that our projected tax revenues cannot afford.  Even though President Obama’s goal is to provide the same substandard care to Americans as citizens in Canada and Great Britain receive, the United States will continue to suffer from the highest inflationary costs for health care services and pharmaceuticals.  Obama is offering our country the worst of both programs, asking taxpayers to compete with a broken system that is facing annual inflation costs of nearly 10%. 

Added to the already heavy burden heath care costs place on our economy, the Obama plan will implement a head tax on companies that cannot afford to provide coverage and a tax on employer benefits to those companies who do provide coverage.  This re-distribution of wealth/tax-shifting logic seems especially incomprehensible as the United States faces the most serious economic downturn since the great depression.  Obama may become successful with insuring 30-40 million additional Americans and replace the private insurance for tens of millions more, but their employment and wealth will be sacrificed in doing so.  Many US companies have filed for bankruptcy, not entirely based on a decrease in sales, revenue or production output, but because of the rising costs of health benefits to their employees.      

The single payer advocates in Canada and Great Britain were much more clever than President Obama.  They at least understood that the decision to expand bureaucracy and inefficiency by eliminating competition in their health care industries, would drive up administrative and long-term care costs.  To offset, these governments used legislation to cap salaries for health care providers and restricted infrastructure and pharmaceutical acquisitions.  Unlike the Obama-Dodd-Kennedy plan, the governments of Canada and the United Kingdom placed the funding burden on the income tax system, not private enterprise.  Unlike the Obama plan, the heath care systems in Canada and the United Kingdom are decentralized to one degrees or another.  In these countires, the second and third levels of government maintain control of spending prioritization and policy.  In fact, many of these local governments have offered private delivery alternatives to federal services and mandates. 

There are several other benefits to adopting the single payer insurance program over the Obama-Dodd-Kennedy plan.  Private sector operating costs in key sectors such as the automotive industry are already significantly lower in many of the single payer systems compared to the United States.  Some estimates have identified the price of producing a General Motors automobile in Canada at over $1,200 lower per unit, then in plants located in the United States. Forcing private enterprise to fund the Obama-Dodd-Kennedy plan will only drive up this divide and further reduce America’s competitiveness in the global economy.

Make no mistake, adopting a single payer system will devastate the quality of care the majority of Americans receive today.   The Obama-Dodd-Kennedy plan will not address the shortage of doctors, nurses and other practitioners which will result when tens of millions of Americans receive coverage later this year.  But, since our government is determined to expand coverage to those who live without, the single payer system remains the best of the worst options our Congressional leadership is offering to our nation.  The Obama-Dodd-Kennedy program will not fail because the plan will sacrifice our world-class health care quality for universal coverage, but because it fails to address the greatest threat to our private and public health care programs, the rising cost of care and the lack of competition and choice in the system.  Make no mistake, if implemented, the Obama-Dodd-Kennedy plan will bankrupt the federal government and drive employment overseas.

Kristofer Lorelli can be contacted at lorville@rogers.com, on Facebook and twitter/Kris_Lorelli.