Milt Freudenheim often writes insightful analysis of health care issues for the NYT. Today�s column doesn�t quite fit the bill. The article discusses the prospects for extending health insurance coverage. It extols the sort of hodgepodge approach put in place in Massachusetts and now being forward in by Governor Schwarzenegger in California as the best route. It also describes these approaches as �market-based.� As a political matter, Freudenheim is likely correct. The insurers and other health industry lobbies have enormous political power. For the immediate future, they will probably be able to shut down any proposal that leads to substantial changes in the industry. However, it is really stretching reality to describe the current system of government protection as �market-based.� Just about every sector of the health insurance industry is coddled by the government and enjoys all forms of lavish subsidies. For example, the insurers won�t let government health programs (like Medicare or the Veterans Administration health care program) compete with them in a free market because they know the government programs would wipe them out on a level playing field. (This is why the Republican Congress expressly prohibited Medicare from offering its own drug benefit). The pharmaceutical industry relies on government granted patent monopolies to make its profits, in addition to the benefits of $30 billion of taxpayer funded research through the National Institutes of Health. (They also get the benefits of the U.S. trade ambassador working as a sales rep, promoting tighter drug patent rules in developing countries as the price for improved access to the U.S. market.) Doctors get restrictions on competition from foreign professionals since, unlike textile workers, auto workers, and custodians, they lack the skills needed to compete in a global economy. In analyzing what is politically feasible, we must recognize the role of political power, just as we have to recognize the gun that the bank robber is holding in deciding how best to resolve a standoff with law enforcement. But, let�s not confuse power with legitimacy. The special interest groups in the health care sector are using their power to increase their income. None of them have any interest in a free market.
--Dean Baker
