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Dr. O’s Dilemma By: Jacob Laksin
FrontPageMagazine.com | Thursday, July 23, 2009

“This isn’t about me,” insisted President Obama yesterday, as he made his appeal for health care reform in a primetime press conference. Like much of what followed, this statement contained a sizable kernel of untruth.


Although it has wider implications, the health care issue is very much about Obama. The president has expended his once-plentiful political capital and staked his credibility on his belief that the country not only wants a more effective and less costly health care system but that it shares his and the Democratic majority’s view that greater government involvement in health care is essential to achieving this end. The former is demonstrably true; the latter is anything but. For the first time in his tenure, public discontent is directed at Obama personally. That was evidenced this week’s by a Washington Post-ABC News poll, which found that public support for Obama’s handling of health care has for the first time plunged below 50 percent. For more than half the country, the health care issue is about Obama.  


At issue, too, is the nature of the health care reforms that the president wants – and their possible consequences for the country. Of these the most controversial is the so-called “public option,” and it is a testament to the discontent it has fueled that the president largely avoided mention of the government-subsidized health care plan. That turned out to be a wise strategy, because President Obama’s one attempt to defend the public option, in which he suggested that a government-run plan would expand competition and “incentivize” private insurers to offer more affordable coverage, was a blatant fallacy of economic reasoning.


Instead of encouraging competition, the government-run plan is likely to stifle it. The reason is that a government plan would be able to draw on taxpayer funds, a subsidy unavailable to private insurers that would keep insurance premiums artificially low in the public government plan and force private-sector companies out of business. And rather than driving down insurance costs in the private sector, the public option is likely to inflate them. The Cato Institute’s Michael Tanner points out that “the government plan could impose much lower reimbursement rates on doctors and hospitals the way Medicare and Medicaid do today. Providers would be forced to recoup that lost income by shifting their costs to private insurance, driving up premiums and making private insurance even less competitive.”


If this seems like a prescription for corralling the country into a government-run plan, it is: The Lewin Group, an econometrics firm, estimates that as many as 118.5 million people, or approximately two thirds of all Americans with health insurance, could lose private coverage and end up in the public plan if health care reform is passed. That casts serious doubt on Obama’s oft-repeated disclaimer that those Americans happy with their current coverage would be allowed to keep it under his plan.


So, who is in favor of the president’s plan? In one of the odder portions of his press conference, Obama touted the example of the Cleveland Clinic, a hospital group that he called a model for the health-care reform he envisions. Just one problem: Not only has the Cleveland Clinic not come out in favor of the president’s reform plans but its CEO and President, Toby Cosgove, is an avowed critic of the public option. He argues that government-run programs regularly underpay hospitals for services, and that a public option would crimp already tight hospital finances. President Obama may believe that the Cleveland Clinic has found a system that “works,” but the clinic so far has not returned the compliment.


The disconnect between reality and rhetoric was equally pronounced when Obama extolled what he considers the great virtue of his plan – its alleged ability to control runway health care costs – without addressing the exorbitant price tag that health-care reform would entail. Nowhere, for instance, did the president address Congressional Budget Office Director Douglas Elmendorf’s conclusion last week that the America’s Affordable Health Choices Act of 2009, the health care legislation recently introduced by House Democrats that represents one version of the president’s proposed reform, “would result in a net increase in the federal budget deficit of $239 billion” over the next ten years. True, he warned about not being able to “control our deficit.” But reasonable observers may have been forgiven for wondering if in this instance the president’s proposed cure was not the disease.


Faced with slipping support over health care and rumblings of discontent within his own party – most notably from the conservative “Blue Dog” Democrats – President Obama had to reassure the country last night that his plan was not as bad some say and more and more now believe. Perhaps the best indication that he fell short of that goal is the fact that, at times, Obama sounded very much like the critics he was ostensibly trying to refute. Speculating about why Americans have grown skeptical about the promises of ObamaCare, he suggested that “they feel anxious, partly because we’ve just become so cynical about what government can accomplish.”


If that’s true, then President Obama must shoulder some of the blame. Having witnessed in recent months what the government can do for the economy, it’s no wonder that Americans prefer it to leave health care alone.  

Jacob Laksin is managing editor of Front Page Magazine. His email is jlaksin -at- gmail.com

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