Gingrich on Health Care

by | Jan 2, 2012 | POLITICS

Increasingly, it looks like either Newt Gingrich or Mitt Romney will be the Republican alternative to the horrendous President Obama. Anyone who’s not a liberal already understands what’s wrong with Romney. In the first of a series, I’ll examine Gingrich’s proposals, as articulated on his website. Today the focus is health care. Gingrich: “Make health […]

Increasingly, it looks like either Newt Gingrich or Mitt Romney will be the Republican alternative to the horrendous President Obama. Anyone who’s not a liberal already understands what’s wrong with Romney. In the first of a series, I’ll examine Gingrich’s proposals, as articulated on his website. Today the focus is health care.

Gingrich: “Make health insurance more affordable and portable by giving Americans the choice of a generous tax credit or the ability to deduct the value of their health insurance up to a certain amount and by allowing Americans to purchase insurance across state lines, increasing price competition in the industry.”

Dr. Hurd: These are necessary reforms, and long overdue — especially selling health insurance across state lines. The biggest problem with health insurance is that it’s not a private marketplace. Imagine if cell phones, computers, televisions or automobiles could not be sold across state lines. Imagine if people living in California were not allowed to buy home improvement products manufactured in New Jersey. It’s insane and obscene, and shouldn’t even have to be debated.

Gingrich: “Create more choices in Medicare by giving seniors the option to choose, on a voluntary basis, a more personal system in the private sector with greater options for better care. This would create price competition to lower costs.”

Dr. Hurd: Let’s be clear. Medicare cannot be forced to operate on market principles. However, the current elderly generation is stuck with Medicare and yet Medicare is going bankrupt sooner than anticipated. If Gingrich thinks Medicare can permanently be made to function as a private market, with government subsidies and in effect operating as a government monopoly, he’s mistaken. This is as foolish as George W. Bush thinking that billions of dollars poured into federal education would make public schools “accountable” and operate as if they could go out of business, as in a free market. Look at how well that worked out.

Having said that, I’m all for giving seniors more choices. But we must always remember that Medicare has an unfair advantage: Government pull, government subsidies (in the trillions), and government coercion. Even so, I’m betting that the free market will still beat out Medicare, just as FedEx and UPS ultimately beat the post office. This is the one thing that liberal Democrats and even many Republicans (Romney included) cannot tolerate, so expect a huge fight.

Gingrich: “Reform Medicaid by giving states more freedom and flexibility to customize their programs to suit their needs with a block-grant program similar to the successful welfare reform of 1996.  With that block grant, each state can focus on providing the assistance to low-income families that they each need to buy health insurance.”

Dr. Hurd: This assumes that it’s government’s responsibility to provide health care and insurance in the first place. This premise gave birth to Medicare and Medicaid, and all the bureaucracy and bankruptcy which followed, which much more coming. You cannot “reform” the inherently unreformable. It’s time to accept the fact that Medicare and Medicaid failed fiscally because they were morally unsound. Their moral failing boiled down to the fact that productive, healthy citizens were coerced into paying for the health care of those unable and/or unwilling to pay for their own. This is a recipe for inflation, incompetence and ultimately collapse. Medicare and Medicaid cannot be reformed; they have to be phased out. America does not need a “better” Medicare and Medicaid system, because no such thing is possible and they’re not going to get one. These programs must be phased out, and replaced with what should have been there all along: A free market. In 1996, there was the luxury of a decade or two, or even three, to perhaps phase those programs out.

That time has passed. The deficit and debt are growing by the second, America’s credit rating has been downgraded, the value of the dollar is falling and may collapse, bringing the whole economy with it. This is partly because Obama won’t let the private economy grow, and partly because Medicare and Medicaid have bankrupted the nation. The government made promises it could not keep. That’s the simple truth, and Gingrich should be smart enough to know it.

Gingrich: “Cover the sickest with a High Risk Pool set up by each state to cover the uninsured who have become too sick to buy health insurance.”

Dr. Hurd: This is Democrat-lite. From what I’ve read, ObamaCare already does this. This is the job of private charity. We’re all potentially sick, and will all be sick someday. The demand for medical care and medical insurance is virtually unlimited. Government cannot afford to do the impossible, and politicians should stop promoting the pretense that it can.

Gingrich: “Protect consumers by reinforcing laws which prohibit insurers from canceling or charging discriminatory rate increases to those who become sick while insured. Extend Health Savings Accounts (HSAs) throughout the health care system.  Everyone on Medicare and Medicaid should be free to choose an HSA for their coverage.  All workers should be free to choose an HSA in place of their employer coverage if they desire.”

Dr. Hurd: HSAs are a good transitional step. However, they have failed to date because (1) liberals have undercut them and, (2) people don’t look at health insurance as something they are responsible for purchasing on the market. It’s well and good for government to give health care consumers more options. But government will also have to make it clear: “We’re phasing out government insurance. We can’t pay for it. You’re going to have to handle it yourself. But we’re going to liberalize the marketplace as widely and quickly as possible.” This is a stand no politician is willing to take, including Gingrich, it seems.

This makes Gingrich vulnerable to attacks from both Romney and Obama, who strongly favor preserving the pretense — excuse me, the outright lie — that government can keep paying for everybody’s health care, or even the health care of the elderly alone.

Gingrich: “Reward quality care by changing the Medicare and Medicaid reimbursement models to take into account the quality of the care delivered and incentivizing beneficiaries to seek out facilities that deliver the best care at the lowest costs. Reward health and wellness by giving health plans, employers, Medicare, and Medicaid more latitude to design benefits to encourage, incentivize, and reward healthy behaviors.

Stop health care fraud by moving from a paper-based system to an electronic one. Health care fraud accounts for as much as much as 10 percent of all health care spending, according to the National Health Care Anti-Fraud Association. That’s more than $200 billion a year.

Compare this to the 0.1% fraud rate in the credit card industry thanks to its high-tech information analysis systems.”

Dr. Hurd: There he goes again. Gingrich must let go of the delusion that Medicare/Medicaid can be forced to behave as a marketplace. These programs are based on compulsion and bureaucracy. They cannot go out of business, even when bankrupt. Private owners with a financial stake in fighting fraud will always, hands down, do a better job of minimizing fraud than the clunky, lazy apparatus of government ever will. Everybody knows this! As for changing the way Medicare providers are paid, good luck with that. I don’t see doctors agreeing to work with Medicare if Medicare tells them, “We’ll tell you after the fact if we’ll pay you, or how much we’ll pay you.” As it is, government is going to — sooner or later — cut doctor’s reimbursement rates by 30 percent or more. This is based on a law passed by Congress when the House was run by Gingrich himself, a law Congress keeps postponing every year since. Is this what you want for your doctor, all you elderly out there? Unless government is prepared to draft doctors into medical service and remain part of Medicare — nobody has gone there yet, but I expect to live to see it happen — then Medicare is going down on this basis, alone.

Gingrich: “Stop junk lawsuits that drive up the cost of medicine with medical malpractice reform.”

Dr. Hurd: Nobody rational can argue with this. But nothing whatsoever has changed in this regard, even when Republicans (and Gingrich himself) controlled Congress. Lawsuit reform, while desirable, is probably putting the cart before the horse, anyway. First we need a free market in medicine. Let consumers and health providers become beholden to each other, rather than to the third party of government. Competence, efficiency and good will will increase. At that point, lawsuits, as in any other private industry, will likely become the exception and not the norm.

Gingrich: “Speed medical breakthroughs to patients by reforming the Food and Drug Administration.”

Dr. Hurd: Here’s a thought. Let’s stop giving the FDA control over what people can and cannot buy. Everyone assumes the FDA protects them.

Really? Products take forever to get to market, and they’re incredibly expensive once they get there, more than anyone can afford. Is this protection? It’s fine for government to punish fraud and objective malpractice.  But the FDA has political and vested interests of its own, because of the life or death power we give it over drugs that might never come to market. People think I’m crazy to even suggest this, but if you ask me, it’s the status quo which is something worse than crazy.

Gingrich: “Inform patients and consumers of price and quality so they can make informed choices about how to spend their money on care.

Patients have the right to know this information, but finding it is virtually impossible.”

Dr. Hurd: A free market would provide this. If Gingrich thinks there’s a system other than a free market which can provide this, he should say what it is. If he does think it’s a free market we need, he should come out and say so. People should be told the truth. That’s what leadership is!

Gingrich: “Invest in research for health solutions that are urgent national priorities. Medical breakthroughs–ones that prevent or cure disease rather than treating its symptoms–are a critical part of the solution to long-term budget challenges.  More brain science research, for example, could lead to Alzheimer’s Disease cures and treatments that could save the federal government over $20 trillion over the next forty years.”

Dr. Hurd: But we already have government investment in research. Why is this government’s job? Why should government favor, by vote in Congress or executive edict, which diseases warrant more research and which ones less? It’s all political! It’s not justice and fairness — it’s pull.

Gingrich has always been a big fan of more and more government research for diseases. Where’s the money going to come from, Newt?

Overall, Gingrich’s positions on health care are disappointing. He equivocates on the issue of a free market. This undercuts his ability to be a leader. It makes him vulnerable to attacks from Obama and Romney, both who like the system as we know it.

For years, politicians have been talking about “change.” When are we going to get it?

What we need is for-profit medicine. When people operate for a profit, they have all the incentive they need to deliver the best product, service or technology available. Americans get this better than anyone.

But when it comes to medical care, they’re stuck in the Middle Ages.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at:

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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