Liz Peek

Could Mammograms Fall Victim to Obamacare?

Liz | 11/20 at 02:35 PM

Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 11/16) 

An English friend recently described an example of the kinds of practices that so alarm opponents of Obamacare. Her mother, who is 83 years old, is a breast cancer survivor. She has had surgery and subsequent chemotherapy twice and is currently in excellent health. The government, however, has told her they will not pay for any future mammograms, despite her history and obvious vulnerability. It is, they explain, not cost effective.

That assessment is derived from studies – analyses which deal in probabilities and cost curves – the authors of which generally do not encounter the mothers or sisters impacted by their decisions. Such a study made headlines in the U.S. this week; it argued for less frequent mammograms for women under the age of 50. The report from the U.S. Preventive Services Task Force raised a firestorm, as those frightened by a government takeover of our medical establishment saw it as likely to influence “best practices” and provide ammunition for those trying to rein in costs.

Americans should be alarmed. Our president has told us that his program will “bend the curve” on medical outlays. Are we so naive as to imagine that cutting costs will not mean reduced care – for someone, at some time? It is shocking that both the House and Senate bills include huge bites out of Medicare, and few are questioning what that really means for seniors. The Senate bill establishes a commission of 15 people, to be appointed by the president, who will determine how to limit Medicare spending. If you disliked the autocratic decision making practiced by your HMO, wait until you have to argue your case to Beltway bureaucrats.

Americans are spoiled. The 85% of our population that has health-care insurance is accustomed to receiving the medical care that their doctor prescribes. They are not interested in whether that treatment is “cost effective.” Unhappily, a government facing ballooning budget deficits is going to have to make choices. Just as the English have.

The tough choices will not only target health care. President Obama, in a Beijing interview with Fox News (amazingly), warned that “if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy” and bring on a “double-dip.” The ugly possibility of another downturn, raised recently by some wobbly economic indicators, rattled investors yesterday, causing a nasty sell-off in stocks. The housing market fell sharply in October for the first time since April, dropping 10.5%. Monthly housing starts peaked at an annualized rate of 2.27 million at the beginning of 2006 and are now running at 529,000. Manufacturing activity also slowed last month, with output increasing only 0.1% compared to an average gain of 0.9% in the prior three months. Part of the drop-off stemmed from lower vehicle assembly rates as the Clunkers program concluded. One bright spot was the October reading of leading indicators, which climbed for the seventh straight month, albeit at a lesser rate than expected.

What are the odds of another downturn? Slim, I think, but real. Today’s economy is one-of-a-kind, but many continue to look toward the Great Depression for clues. Skeptics of growing government spending argue that the New Deal prolonged – rather than countered – the 1930s slump and are equally wary of today’s mammoth deficits. One such critic is noted columnist Amity Shlaes, who spoke to a Manhattan Institute gathering in New York this week, raising alarming parallels between the Obama administration and that of Franklin Roosevelt. Shlaes is the bestselling author of The Forgotten Man: A New History of the Great Depression, and is a senior fellow at the Council on Foreign Relations. She describes the 1930s as a period during which populist outrage at bankers allowed for unprecedented government incursion into private enterprise and private life. The Roosevelt White House was staffed by a well-educated and arrogant team known as the “Brain Trust” who considered the rule of law an inconvenience and was confident that government knew best. (Is this sounding familiar?)
Among other policies enacted by FDR were the Wagner Act of 1935, which tipped power toward organized labor, and the National Industrial Recovery Act of 1933, which allowed the government to set wages and prices. The Brain Trust was mainly concerned with declining prices, thinking that lower prices would stifle demand. Shlaes recounts that this preposterous notion was behind the prosecution of a farmer who was accused of dropping the prices of his chickens in order to sell them. The exchange between the prosecutor, who forces the barely literate farmer to reveal that no, he has never read economics and that no, he is not an “expert” in chicken pricing, recalls a recent statement by Barney Frank, head of the House Financial Services Committee. The Committee recently approved an amendment that bars the Fed from granting rule-making authority to regional bank presidents. Explaining the decision, Frank is quoted as saying, “The regional bank presidents are private citizens appointed by other private citizens.” Oh no! We mustn’t let loose the “private citizens”!

President Obama faces tough choices. Americans have made it clear that their first priority is jobs. That is not Obama’s first priority. Rather, his determination to push through health-care legislation compromises his ability to provide the kind of incentives that might encourage businesses to hire new workers. You can’t with one hand slap on added payroll taxes and other levies to pay for universal health coverage and with the other reduce payroll taxes to lower labor costs.

Further binding the president’s hands is growing concern about the country’s deficit spending. Nothing could have spotlighted this reality more harshly than Obama’s recent trip to China. The chill in Beijing was not entirely due to the weather. Both before and during the trip the Chinese made it clear that they are not happy with our fiscal management. Among other unnerving conversations was that in which the Chinese reportedly pressed Peter Orszag, head of the Office of Management and Budget, for details about the cost of the proposed health-care legislation.

What can the president do? He can reassure American businesses that the government is their champion. He can demand that his union pals back off demands for increased organizing power; he can fast-forward needed trade agreements that would allow U.S. companies to take advantage of the sinking dollar; he can cool the ambitions of the Justice Department, which has astoundingly decided that this is the perfect time to investigate our most promising industries, such as technology; he can cut payroll taxes; and he must present the country, and the world, with a convincing plan for winding down the emergency measures that stabilized our banking system. Finally, he needs to take ownership of the mess we are in. Blaming George Bush for all his troubles makes him look weak. Yes, he inherited a terrible situation, but he did campaign for the job, right?

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