Dr. DeGerome: Socialized Medicine No Cure

Tuesday, 23 Feb 2010 09:48 AM

By Dave Eberhart

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 Dr. James H. DeGerome, author of “The Cure for the American Healthcare Malady,” tells Newsmax.TV’s Kathleen Walter that a government-controlled healthcare system -- like those that currently exist in Canada, the United Kingdom, Italy, and France – simply cannot provide enhanced levels of healthcare at lower cost for all people.

The doctor in his house-call to Newsmax issues a dire warning about socialized medicine, calling it the apple in the Garden of Eden.

Editor's Note: Watch video at foot of article, below.


The retired gastroenterologist, who has published numerous articles in medical journals and private sector publications, details why the Democratic reform plans have failed to resonate with the public.

“At the top is a $2 trillion increase in the national debt,” argues DeGerome. “At a time when our economy is struggling, the government comes along and imposes huge new taxation on all kinds of people -- small businesses, medium-size businesses will be facing surcharges of 5.5 percent, new payroll tax hikes …”

“They are going to be faced in the medical device industry with $80 billion worth of new taxes, which will of course be passed on to consumers,” he adds. “So when the president says you won’t pay one penny tax if you make less than $250,000, don’t believe it for a moment. [B]ecause you have to pay more for your drugs because of the tax on pharmaceuticals, and more for your medical products -- because of taxes imposed on medical products.”

DeGerome further notes that if you're elderly and in the Medicare range, you'll see $500 billion less in services that you will be able to get. “So this reform package of the Democrats is extremely expensive and has multiple fatal flaws,” he concludes.

Is there no light to dispel the darkness?

Yes, indeed, proclaims Dr. DeGerome – but some long-entrenched business-as-usual must be tossed to the curb. High on the list are the so-called “mandates.”

Mandates are products and services required by the states of the insurance companies that come to sell healthcare policies in the state. “We are subject to whim of state legislators, who put [by example] massage therapists and vitaminologists in the mandatory coverage that the insurance companies have to offer.”

Bad, bad news for the consumer.

“Each one of those mandates raises the cost of a healthcare policy premium by 1 to 5 percent,” he explains, “and when they're finished, 15 to 50 percent of your premium is frivolous state mandate requirements.”

DeGerome gives the example of New Jersey, where there are approximately 40 state mandates -- so a healthcare policy in New Jersey that cost $3900 only costs $805 in Kentucky, because Kentucky has removed mandate restrictions.

Then there is the ubiquitous bogyman of tort reform. “Without tort reform, how effective can healthcare reform really be,” asks Walter.

“Well, it would be difficult -- because the cost of defensive medicine practices, which after all is what we are talking about, is by CBO [Congressional Budget Office] estimates over $200 billion a year to the healthcare system,” he instructs. “Now Democrats are beholden to the trial bar and the trail bar refuses to allow tort reform.”

DeGerome concedes that the tort reform issue is one of the deal-breakers, “and that's why Republicans and Democrats I don't think can sit down and come up with any kind of compromise -- because tort reform is off the table…”

“If you cap noneconomic damages in medical malpractice case to $250,000 a year, you all but end defensive medicine practices,” he notes. “That's been done in Texas. It's been done in California. Now doctors are back in the emergency room treating high risk cases and defensive medicine practices are ebbing and dying out in those two states.”

Considering other die-hard deal-breakers, DeGerome turns to the public option and the insurance exchanges.

“[B]oth, I firmly believe, lead us directly to socialized medicine or total government monopoly of our healthcare system. Actually, the public option would set up a government as an insurance agent and would compete against private healthcare carriers, imposing various regulations, which would put them out of business…

“And the same is true for insurance exchanges,” the doctor explains. “We know about these from experiences in Kentucky, in Maine and other states where these were tried unsuccessfully; it failed in Florida…

“Right now as we speak, in Massachusetts, the exchanges are failing and insurance premiums are geometrically arising in Massachusetts for the average healthcare policy holder…

“So, the public option or the insurance exchange; okay, what would they do?” he asks rhetorically. “They would impose community rating and guaranteed issue rules on the private healthcare provider. By definition, this means you can be in an ambulance being taken to the hospital and call in and say ‘I want an insurance policy today.’

“It wouldn’t force you to get into the healthcare portal until you got sick. The healthcare pool would be very unhealthy and very expensive,” the doctor concludes.

As to what has been kicking around Republican circles in the way of ideas, DeGerome finds some good fodder.

“I studied quite a few of the ideas from the Republican Party from people like Sen. Tom Coburn and Congressman Price. But going back aways to the Bush-Rove era, where standard health care deductions were floated as a cure -- that is not a bad idea,” he opines.

“It was improved upon by McCain when he suggested tax credits -- tax credits allow the poor between Medicaid eligible and up to 2 or 300 percent above the federal poverty level -- up about $45,000 a year in income -- to get money from the federal government in the form of a tax credit to buy a healthcare policy.

“Also, McCain and others have suggested a guaranteed access pool. That money is coming from state and federal revenues and allows people with pre-existing diseases to get a stipend, and with that stipend to purchase the higher premium healthcare policy that they need because of their pre-existing disease, which costs thousands of dollars to treat.

“Those two ideas have been floated and should be put together in a Republican plan now. Also the ending of state mandates. That idea was carefully explained by [Rudy] Giuliani in his campaign for the presidential nomination for the Republican Party. This needs to be a national law,” he concludes.

The Poison Apple in the Garden of Evil is a metaphor used in DeGerome’s informative book for the disaster of socialized or government-run medicine.
“Once you bite into it, apocalyptic forces are unleashed. It doesn't cost less as they claim; it doesn't cover everybody as they claim; it does leave a higher-quality healthcare…

“It’s the exact opposite the case,” he explains. He gives the example of a couple in Canada making $60,000 with two kids, who pay $11,300 a year in taxes to the federal government. In United States, that same couple pays only $1900 and the kids are covered by the state children's health insurance plan.

“So, it's much cheaper in the U.S. -- since the American couple goes out and buys employer-provided healthcare for about 6800 dollars a year. Do the math. They pay $1900 to the Feds; $6800 for their healthcare. They are 2 or $3000 ahead of their Canadian counterparts -- and Canadians have draconian waits for service, deferred care, denied care, which we don't have in America.”

Summing it all up, DeGerome notes:

-- “We have a group of people 12 million people between Medicaid eligible and 200 to 300 percent over the federal poverty level -- about $45,000 a year income -- who need to have money enough to buy decent healthcare policy. That's problem one.

-- “Problem two is the pre-existing conditions patients – we need tax credits for the poor and we need guaranteed access pools for those with pre-existing conditions.

-- “To make it budget neutral, what we do is everybody is required to buy a healthcare policy -- that lowers price for everyone. We do significant tort reform; we end state mandates and other things…

-- “The other things include further ideas have been around for a while -- health savings accounts, which are powerful wellness incentives; association health plans; data sheets; preferred drug lists; and standard healthcare -- all of these ideas are around and they are all excellent and they reduce the cost of the upward pressure on healthcare premiums.”

Critics have been calling “The Cure for the American Healthcare Malady” an intelligent and meticulously researched examination of the inner workings of healthcare delivery systems in the United States and abroad.

Dr. DeGerome’s narration in his book convinces the reader that we can have universal coverage, affordable to all citizens, without massive increases in personal and corporate taxation.




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