When President Obama first began pushing his healthcare proposals last spring, he claimed they would save money and “bend the cost curve” of rising healthcare premiums.
It turned out he was right — in the opposite direction. The Democrats’ plan would not only raise premiums, it would raise taxes while reducing the quality and availability of healthcare.
The latest bad news comes from Richard S. Foster, chief actuary for the Centers for Medicare and Medicaid Services, who says a Senate plan to cut Medicare to pay for an overhaul of the health system would threaten the profitability of one in five hospitals and nursing homes.
Foster warns that because of low reimbursement rates, many institutions might refuse to take Medicare, “possibly jeopardizing access to care for beneficiaries.”
According to Foster, who ultimately works for Obama, the House version of the bill would sharply reduce benefits for many senior citizens while raising national health spending by about $289 billion over the next 10 years. He also casts doubt on whether the proposed cuts in Medicare to be used to pay for expanded insurance coverage would actually materialize.
How could Democrats be so blind as to propose jeopardizing the quality of healthcare while increasing costs? The same way the Soviets ran their economy, blind to the benefits of the profit motive and free enterprise.
Like the Democrats who want to provide coverage for all Americans, the Soviets had good intentions. They reasoned that if the government ran everything and distributed wealth equally, everyone would be happy. But like the Democrats, the Soviets were naive and shortsighted.
Under their government-run economy, Soviets had no incentive to work hard or to produce. They got paid the same regardless. Because prices of goods bore no relation to their actual cost or their value to consumers, they did not serve the normal function of regulating supply and demand.
In a free economy, if sneakers or chocolate is in short supply and in demand, their prices rise, spurring entrepreneurs to produce more. That was missing in the Soviet economy, where ponderous bureaucracies regulated supply.
As a result, entering a grocery store was like walking into a tomb. On most days, grocers had nothing to sell except potatoes and onions. When available, meat was almost entirely fat. Chickens appeared to be a different species — all skin and bones.
Milk was sour when it was purchased. Apples were tiny and shriveled. Oranges were still green. Grapes, if available, were rotten. To meet plan quotas, tea was mixed with tiny branches and leaves of other plants to increase its bulk.
To buy apples, you had to try to wedge your way into a crowd to get a peek at the prices. Then you stood in line for a half an hour to get to the cashier to pay in advance. Finally, you waited in another line for another half hour to present the chit to a second clerk, who weighed the apples and gave them to you without a bag or wrapping.
Everything was made so cheaply and maintained so poorly that virtually nothing worked properly. When I interviewed KGB defector Vitaly Yurchenko for my book “Escape from the CIA: How the CIA Won and Lost the Most Important Spy to Defect to the U.S.,” I stayed at the National Hotel across from Red Square in Moscow.
Supposedly a high-quality hotel frequented by foreigners, it had a moldy smell. The reception desk had a wooden teletype machine that looked like a prototype of an early radio set. The guest rooms were out of the American West, circa 1890.
The furnishings were what one would expect in an American prison, with two beds the size of cots that sank like pedestrian underpasses in the middle. They were covered with tattered spreads with holes in them. The sheets had small rust stains. The dresser was made of pine and so battered that it would not be sold at a rummage sale in the West.
But that was nothing compared to the bathroom, where the sink was old and rusting and the toilet paper was coarser than the coarsest western writing paper. The towels were so thin and worn from repeated washing they could barely absorb any moisture.
Downstairs in the dining room, there was at least one waiter for each table. Yet the service dragged on for hours because most of the time the waiters remained in the hallway chattering with each other. There was no incentive to do a good job or to cut down on extra workers.
As for healthcare, unless you were a Communist Party official or paid bribes to doctors, you could forget about it. Nearly two-thirds of Soviet hospitals did not have running hot water, and 36 percent of hospitals located in rural areas of Russia did not have sewage or running water.
Some 78 percent of AIDS victims in Russia contracted it through dirty needles or HIV-tainted blood in the state-run hospitals. The official infant-mortality rate in Russia was more than 2.5 times higher than in the United States.
If their government incursion becomes law, the Democrats will have a similar effect on healthcare. As happened with the Soviets, it will surely result in their eventual defeat. But in the meantime, it will bring higher costs, poorer care, and longer waits for life-saving treatment for decades to come.
Ronald Kessler is chief Washington correspondent of Newsmax.com. View his previous reports and get his dispatches sent to you free via e-mail. Go here now.
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