SPEECH OF
HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
Wednesday, October 6, 1999
1999 Ron Paul 104:1 Mr. PAUL.
Mr. Speaker, as an MD, I know
that when I advise on medical legislation I
may be tempted to allow my emotional experience
as a physician to influence my views, but
nevertheless I am acting the role of legislator
and politician. The MD degree grants no wisdom
as to the correct solution to our managed
care mess. The most efficient manner to deliver
medical services, as it is with all goods
and other services, is determined by the degree
the market is allowed to operate. Economic
principles determine efficiency of markets,
even the medical care market; not our
emotional experiences dealing with managed
care.
1999 Ron Paul 104:2 Contrary to the claims of many advocates of
increased government regulation of health
care, the problems with the health care system
do not represent market failure, rather
they represent the failure of government policies
which have destroyed the health care
market. In today’s system, it appears on the
surface that the interest of the patient is in
conflict with rights of the insurance companies
and the Health Maintenance Organizations
(HMOs). In a free market this cannot happen.
Everyone’s rights are equal and agreements
on delivering services of any kind are entered
into voluntarily, thus satisfying both sides.
Only true competition assures that the consumer
gets the best deal at the best price
possible, by putting pressure on the providers.
Once one side is given a legislative advantage,
in an artificial system, as it is in managed
care, trying to balance government dictated
advantages between patient and HMOs
is impossible. The differences cannot be reconciled
by more government mandates which
will only makes the problem worse. Because
we are trying to patch up an unworkable system,
the impasse in Congress should not be
a surprise.
1999 Ron Paul 104:3 No one can take a back seat to me regarding
the disdain I hold for the HMOs’ role in
managed care. This entire unnecessary level
of corporatism that rakes off profits and undermines
care is a creature of government interference
in health care. These non-market institutions
and government could have only
gained control over medical care through a
collusion among organized medicine, politicians,
and the HMO profiteers, in an effort to
provide universal health care. No one suggests
that we should have “universal” food,
housing, TV, computer and automobile programs
and yet many of the “poor” do much
better getting these services through the marketplace
as prices are driven down through
competition.
1999 Ron Paul 104:4 We all should become suspicious when it is
declared we need a new “Bill of Rights” such
as a Taxpayer’s Bill of Rights, or now a Patient’s
Bill of Rights. Why don’t more Members
ask why the original Bill of Rights is not adequate
in protecting all rights and enabling the
market to provide all services. If over the last
fifty years we had a lot more respect for property
rights, voluntary contracts, state jurisdiction
and respect for free markets, we would
not have the mess we’re facing today in providing
medical care.
1999 Ron Paul 104:5 The power of special interests influencing
government policy has brought us this managed
care monster. If we pursue the course of
more government management — in an effort
to balance things — we’re destined to make the
problem much worse. If government mismanagement,
in an area that the government
should not be managing at all, is the problem,
another level of bureaucracy — no matter how
well intended — cannot be helpful. The law of
unintended consequences will prevail and the
principle of government control over providing
a service will be further entrenched in the nation’s
psyche. The choice in actuality is government
provided medical care and it’s inevitable
mismanagement or medical care provided
by a market economy.
1999 Ron Paul 104:6 Partial government involvement is not possible.
It inevitably leads to total government
control. Plans for all the so-called Patient’s Bill
of Rights are a 100% endorsement of the principle
of government management and will
greatly expand government involvement, even
if the intention is to limit government management
of the health care system to the extent
“necessary” to curtail the abuses of the
HMOs. The Patients’ Bill of Rights concept is
based on the same principles that have given
us the mess we have today. Doctors are unhappy,
HMOs are being attacked for the
wrong reasons, and the patients have become
a political football over which all sides demagogue.
1999 Ron Paul 104:7 The problems started early on when the
medical profession, combined with tax code
provisions making it more advantageous for
individuals to obtain first-dollar health care
coverage from third-parties rather than pay for
health care services out of their own pockets,
influenced the insurance industry into paying
for medical services instead of sticking with
the insurance principle of paying for major illnesses
and accidents for which actuarial estimates
could be made. A younger, healthier
and growing population was easily able to afford
the fees required to generously care for
the sick. Doctors, patients and insurance companies
all loved the benefits until the generous
third-party payment system was discovered to
be closer to a Ponzi scheme than true insurance.
The elderly started living longer, and
medical care became more sophisticated, demands
because benefits were generous and
insurance costs were moderate until the demographics
changed with fewer young people
working to accommodate a growing elderly
population — just as we see the problem developing
with Social Security. At the same time
governments at all levels become much more
involved in mandating health care for more
and more groups.
1999 Ron Paul 104:8 Even with the distortions introduced by the
tax code, the markets could have still sorted
this all out, but in the 1960s government entered
the process and applied post office principles
to the delivery of medical care with predictable
results. The more the government got
involved the greater the distortion. Initially
there was little resistance since payments
were generous and services were rarely restricted.
Doctors liked being paid adequately
for services that in the past were done at discount
or for free. Medical centers, always willing
to receive charity patients for teaching purposes
in the past liked this newfound largesse
by being paid by the government for their
services. This in itself added huge costs to the
nation’s medical bill and the incentive for patients
to economize was eroded. Stories of
emergency room abuse are notorious since
“no one can be turned away.”
1999 Ron Paul 104:9 Artificial and generous payments of any
service, especially medical, produces a well-known
cycle. The increase benefits at little or
no cost to the patient leads to an increase in
demand and removes the incentive to economize.
Higher demands raises prices for doctor
fees, labs, and hospitals; and as long as the
payments are high the patients and doctors
don’t complain. Then it is discovered the insurance
companies, HMOs, and government
can’t afford to pay the bills and demand price
controls. Thus, third-party payments leads to
rationing of care, limiting choice of doctors,
deciding on lab tests, length of stay in the
hospital, and choosing the particular disease
and conditions that can be treated as HMOs
and the government, who are the payers, start
making key medical decisions. Because
HMOs make mistakes and their budgets are
limited however, doesn’t justify introducing the
notion that politicians are better able to make
these decisions than the HMOs. Forcing
HMOs and insurance companies to do as the
policitians say regardless of the insurance policy
agreed upon will lead to higher costs, less
availability of services and calls for another
round of government intervention.
1999 Ron Paul 104:10 For anyone understanding economics, the
results are predictable: Quality of medical care
will decline, services will be hard to find, and
the three groups, patients, doctors and HMOs
will blame each other for the problems, pitting
patients against HMOs and government, doctors
against the HMOs, the HMOs against the
patient, the HMOs against the doctor and the
result will be the destruction of the cherished
doctor-patient relationship. That’s where we
are today and unless we recognize the nature
of the problem Congress will make things
worse. More government meddling surely will
not help.
1999 Ron Paul 104:11 Of course, in a truly free market, HMOs and
pre-paid care could and would exist — there
would be no prohibition against it. The Kaiser
system was not exactly a creature of the government
as is the current unnatural HMO-government-created chaos we have today. The
current HMO mess is a result of our government
interference through the ERISA laws, tax
laws, labor laws, and the incentive by many in
this country to socialize medicine “American
style,” that is the inclusion of a corporate level
of management to rake off profits while draining
care from the patients. The more government
assumed the role of paying for services
the more pressure there has been to managed
care.
1999 Ron Paul 104:12 The contest now, unfortunately, is not between
free market health care and nationalized
health care but rather between those who
believe they speak for the patient and those
believing they must protect the rights of corporations
to manage their affairs as prudently
as possible. Since the system is artificial there
is no right side of this argument and only political
forces between the special interests are at
work. This is the fundamental reason why a
resolution that is fair to both sides has been
so difficult. Only the free market protects the
rights of all persons involved and it is only this
system that can provide the best care for the
greatest number. Equality in medical care
services can be achieved only by lowering
standards for everyone. Veterans hospital and
Medicaid patients have notoriously suffered
from poor care compared to private patients,
yet, rather than debating introducing consumer
control and competition into those programs,
we’re debating how fast to move toward a system
where the quality of medicine for everyone
will be achieved at the lowest standards.
1999 Ron Paul 104:13 Since the problem with our medical system
has not been correctly identified in Washington
the odds of any benefits coming from
the current debates are remote. It looks like
we will make things worse by politicians believing
they can manage care better than the
HMO’s when both sides are incapable of such
a feat.
1999 Ron Paul 104:14 Excessive litigation has significantly contributed
to the ongoing medical care crisis.
Greedy trial lawyers are certainly part of the
problem but there is more to it than that. Our
legislative bodies throughout the country are
greatly influenced by trial lawyers and this has
been significant. But nevertheless people do
sue, and juries make awards that qualify as
“cruel and unusual punishment” for some who
were barely involved in the care of the patient
now suing. The welfare ethic of “something for
nothing” developed over the past 30 to 40
years has played a role in this serious problem.
This has allowed judges and juries to
sympathize with unfortunate outcomes not related
to malpractice and to place the responsibility
on those most able to pay rather than on
the ones most responsible. This distorted view
of dispensing justice must someday be addressed
or it will continue to contribute to the
deterioration of medical care. Difficult medical
cases will not be undertaken if outcome is the
only determining factor in deciding lawsuits.
Federal legislation prohibiting state tort law reform
cannot be the answer. Certainly contractual
arrangements between patients and doctors
allowing specified damage clauses and
agreeing on arbitration panels would be a big
help. State-level “loser pays” laws, which discourage
frivolous and nuisance lawsuits,
would also be a help.
1999 Ron Paul 104:15 In addition to a welfare mentality many have
developed a lottery jackpot mentality and hope
for a big win through a “lucky” lawsuit. Fraudulent
lawsuits against insurance companies
now are an epidemic, with individuals feigning
injuries in order to receive compensation. To
find moral solutions to our problems in a nation
devoid of moral standards is difficult. But
the litigation epidemic could be ended if we
accepted the principle of the right of contract.
Doctors and hospitals could sign agreements
with patients to settle complaints before they
happen. Limits could be set and arbitration
boards could be agreed upon prior to the fact.
Limiting liability to actual negligence was once
automatically accepted by our society and only
recently has this changed to receiving huge
awards for pain and suffering, emotional distress
and huge punitive damages unrelated to
actual malpractice or negligence. Legalizing
contracts between patients and doctors and
hospitals would be a big help in keeping down
the defensive medical costs that fuel the legal
cost of medical care.
1999 Ron Paul 104:16 Because the market in medicine has been
grossly distorted by government and artificially
managed care, it is the only industry where
computer technology adds to the cost of the
service instead of lowering it as it does in
every other industry. Managed care cannot
work. Government management of the computer
industry was not required to produce
great services at great prices for the masses
of people. Whether it is services in the computer
industry or health care all services are
best delivered in the economy ruled by market
forces, voluntary contracts and the absence of
government interference.
1999 Ron Paul 104:17 Mixing the concept of rights with the delivery
of services is dangerous. The whole notion
that patient’s “rights” can be enhanced by
more edicts by the federal government is preposterous.
Providing free medication to one
segment of the population for political gain
without mentioning the cost is passed on to
another segment is dishonest. Besides, it only
compounds the problem, further separating
medical services from any market force and
yielding to the force of the tax man and the
bureaucrat. No place in history have we seen
medical care standards improve with nationalizing
its delivery system. Yet, the only debate
here in Washington is how fast should we proceed
with the government takeover. People
have no more right to medical care than they
have a right to steal your car because they
are in need of it. If there was no evidence that
freedom did not enhance everyone’s well
being I could understand the desire to help
others through coercive means. But delivering
medical care through government coercion
means not only diminishing the quality of care,
it undermines the principles of liberty. Fortunately,
a system that strives to provide maximum
freedom for its citizens, also supports
the highest achievable standard of living for
the greatest number, and that includes the
best medical care.
1999 Ron Paul 104:18 Instead of the continual demagoguery of the
issue for political benefits on both sides of the
debate, we ought to consider getting rid of the
laws that created this medical management
crisis.
1999 Ron Paul 104:19 The ERISA laws requiring businesses to
provide particular programs for their employees
should be repealed. The tax codes should
give equal tax treatment to everyone whether
working for a large corporation, small business,
or is self employed. Standards should
be set by insurance companies, doctors, patients,
and HMOs working out differences
through voluntary contracts. For years it was
known that some insurance policies excluded
certain care and this was known up front and
was considered an acceptable provision since
it allowed certain patients to receive discounts.
The federal government should defer to state
governments to deal with the litigation crisis
and the need for contract legislation between
patients and medical providers. Health care
providers should be free to combine their efforts
to negotiate effectively with HMOs and
insurance companies without running afoul of
federal anti-trust laws — or being subject to
regulation by the National Labor Relations
Board (NLRB). Congress should also remove
all federally-imposed roadblocks to making
pharmaceuticals available to physicians and
patients. Government regulations are a major
reason why many Americans find it difficult to
afford prescription medicines. It is time to end
the days when Americans suffer because the
Food and Drug Administration (FDA) prevented
them from getting access to medicines
that were available and affordable in other
parts of the world!
1999 Ron Paul 104:20 The most important thing Congress can do
is to get market forces operating immediately
by making Medical Savings Accounts (MSAs)
generously available to everyone desiring one.
Patient motivation to save and shop would be
a major force to reduce cost, as physicians
would once again negotiate fees downward
with patients — unlike today where the government
reimbursement is never too high and
hospital and MD bills are always at maximum
levels allowed. MSAs would help satisfy the
American’s people’s desire to control their own
health care and provide incentives for consumers
to take more responsibility for their
care.
1999 Ron Paul 104:21 There is nothing wrong with charity hospitals
and possibly the churches once again providing
care for the needy rather than through
government paid programs which only maximizes
costs. States can continue to introduce
competition by allowing various trained individuals
to provide the services that once were
only provided by licensed MDs. We don’t have
to continue down the path of socialized medical
care, especially in America where free
markets have provided so much for so many.
We should have more faith in freedom and
more fear of the politician and bureaucrat who
think all can be made well by simply passing
a Patient’s Bill of Rights.
Notes:
1999 Ron Paul 104:2
government dictated advantages probably should be hyphenated:
government-dictated advantages.
1999 Ron Paul 104:3
No one can take a back seat to me regarding the disdain I hold for the HMOs role in managed care. This may be the opposite of what
Ron Paul meant, as he takes a back seat to no one regarding the disdain he holds.
1999 Ron Paul 104:9
The increase benefits probably should be The increased benefits.
1999 Ron Paul 104:9
Higher demands raises prices probably should be Higher demand raises prices.
1999 Ron Paul 104:19
or is self employed probably should be hyphenated and be
or self-employed.
1999 Ron Paul 104:19
federally-imposed roadblocks probably should be unhyphenated: federally imposed roadblocks.
1999 Ron Paul 104:20
the Americans peoples desire probably should be
the American peoples desire.
1999 Ron Paul 104:21
government paid programs probably should be hyphenated: government-paid programs.
