Health policy awaits its Petraeus

It is less than profound to say that rising health care costs are restricting access for the working poor and squeezing all of us. Cost shifting, payroll and income taxes to pay for entitlements, rising copays and deductibles all combine to make us realize we have hit the wall on this matter. That 80 million baby-boomers are racing down the water-pipe towards retirement, with unfunded liabilities estimated in the trilllions is enough to double our dose of Prozac. The strategy used by government since 1965, when Medicare was first enacted, has been to increase access to health care through tax and spend subsidies in incremental doses that the American public would tolerate. First, it was the elderly, then Medicaid for the poor and then large corporation workers with ERISA. The last remaining segment has been the uninsured. Step-by-step, as these programs were put into place, the costs of health care exploded and we now have about 16% of the population under-insured, yet health care consumes 16% of our GNP, more than any other nation. Like Houdini in a straight-jacket we are constrained in attempts to free ourself.

The debate over the past two decades divided itself between those who believe in nothing short of a complete government take-over versus a group who continue to believe that the solution is for government to stop meddling and allow market forces to operate. But, in such a confused situation any grand scheme seems like driving into the future looking out your rear view mirror. A train wreck is sure to ensue.

I perceive the health care situation differently.

The modern health care system that you and I know has really only been with us since the 1970s. Prior to WWII hospitals were sanatoriums for TB patients, children's hospitals for polio victims or places to go and die. Until medicine was armed with its recently acquired arsenal of drugs, computer-assisted surgery and MRI diagnostics it had little to offer. Back then health care was run by religious orders with nuns and a begging cup and was at best 2-3% of GNP. With the introduction of polio vaccines in 1957 that flat growth curve hit an inflection point and began to rise exponentially.

Around the time when modern health care was getting off the ground, we also witnessed immense changes in our industrial economy. Computers downsized and become so cheap that we have come to expect twice the power at half the cost every year. Our cars and appliances all have on-board computers, some of which speak and listen. Mass-produced industrial goods are becoming cheaper, whether it is tennis shoes or toaster ovens. The world and its landfills are awash in plenty due to better management and technology.

That health care has not been the beneficiary of these changes should be no big surprise. It normally takes about 20 to 30 years for an industry to be impacted by disruptive technology. During the early stages technology is employed to improve quality, not efficiency. It is only now that we are seriously considering the electronic health record and internet as tools to improve health care costs.

By way of analogy, Henry Ford released the Model T in 1908, after a decade of failed attempts, at a price of $825. It was not until 1927 that his production peaked at over 15 million vehicles allowing prices to be reduced to $360; a record that stood for 45 years. The same phenomena has existed for electricity, telephones, radios and most things in life. We employed 60% of our people in agriculture in 1890 and today get the job done with 4%. In the very long run everything is subject to Moore's Law.

In my mind, health care is now on the cusp of becoming a really big industry, the likes of which will eclipse everything we have done in agriculture or industrial goods to date. As a service, health care has infinite potential in a world of 8 billion people, but only if it is efficient and effective. Health care services, using genetics and computers as the underlying technologies promise to be the cornerstone in our 21st century economy. Whether the United States will be the leader is yet to be seen, because most European economies also have their sights set on this target.

Health care is like having a grossly obese child. You know that the child's success in life depends on junior losing weight. But, do you admit failure and submit the child to gastric bypass surgery? In the end, isn't it eating less food that causes the weight loss? Or do you try some other approach? What will work? Less fat in the diet; a high protein diet; more fiber? There are lots of ideas, but they all get back to consuming fewer calories and getting more exercise.

So it is with health care. We have indulged our health care youngster mightily with subsidies and tax privileges and he has grown into a strapping big lad. So much so that he splits the seams of his trousers every time he bends over to tie his shoes. We all know that if we take the easy way out and have government take-over health care as a single payor, the game is all but over. As a socialized system, health care will not be the innovative and entrepreneurial creator of new drugs, surgery and genetics that are necessary to increase longevity and improve quality of life. We might cap health care off at 16% of GNP, which is still a heavy overhead burden for an economy that must compete in a global world, but we could do it. But, any hope of Baby Huey being in the Olympics or winning American Idol will be gone.

Now that we have tried almost everything short of gastric bypass surgery, maybe it is time to go back to the fundamental economics that made America great. I'm not talking about unbridled, lassaize faire economics. And, I'm not talking about the blunt instruments of tax and spend subsidization. I'm suggesting surgical economic reform techniques to reshape the industry and turn it into an efficient economic engine for our 21st century US economy.

There are dozens of strategies and tactics such as allowing consumers to form health care cooperatives, health futures contracts to compete against traditional insurance, defined-contribution health plans, evidence-based medicine and internet-based health records, all of which would take a stab at reform. You could reform Medicare within ten years. Just put a new system in place for pre-retirees and let the existing cohort in Medicare die off.

Colorado's 208 Blue Ribbon Commission was another case of trying to do something by committee. Remember, every great endeavor is the lengthened shadow of a single man. We didn't make progress in Iraq until we had David Petraeus. We didn't get an affordable auto until we had Henry Ford. It took Steve Jobs to turn around Apple and produce the iPod and iPhone. It's a hard pill to swallow, but a group of attorneys, political scientists, journalists and historians writing laws and concocting public entitlement programs is always going to be a day late and dollar over budget.

Health care study was a fool's errand

Observers of Colorado's Blue Ribbon 208 Commission on Health Care have generously withheld our comments, pending completion of the commission's deliberations. After their final report to the legislature on Jan. 31, it's now time for the awards ceremony. First Prize should be awarded to the project managers at Lewin, the consulting firm. Their data models and reports were sophisticated, straight-shooting. It's the best information on Colorado's health care system since the Colorado Hospital Association put a knife in the lower abdomen and gutted the Colorado Health Data Commission back in the early 1990s. Very good stuff!!

Second Prize should go to Senate Minority Leader Andy McElhany. His appointment of Bill Lindsay, Colorado's silver-haired, premier health insurance salesman, resulted in the key recommendation of the 208 Commission being to require all citizens in the State of Colorado to buy -- surprise -- health insurance. The group health insurance association must be uncorking bottles of the bubbly right now. Who would have ever thought that if you put an insurance peddler in charge he would recommend everyone buy health insurance? Absolutely counter-intuitive.

Third Prize has to go to Gov. Bill Ritter. He was honest in admitting up front that as an attorney and former prosecutor he knew very little about health care and would require a committee to advise him. He also knew nothing about education or transportation and has required committees for those areas too. Come to think of it, he knows little about nothing and the whole strategy of the state seems dependent on committees. Each committee has determined (surprise again) that an additional expenditure of about $1 billion a year is necessary to fund their respective area.

Factoring in the unpredictability of such matters, it is likely taxes will eventually have to be raised $3 billion a year for health care alone, since the population of uninsured is sure to grow and age and require more care over time in an inflationary health market.

Fourth Prize, last and least, goes to our legislature. In their infinite wisdom they chose to throw out all of the previous learning we had achieved about health care reform and reinvent the wheel. With one ear to the ground and the other ear whispered into by the insurance lobby they crafted Bill 208. Left unsaid, the real mission for the Commission was how to deal with Medicaid, which is rapidly losing the support of doctors who are being forced to discount their services. Medicaid, which has long been treated by the state as a perverse form of economic development, because of federal matching funds, is now eating us alive.

At any rate, the legislature commissioned a fool's errand. Instead of a report that demonstrates a profound understanding of the economic dynamics that drive health care inflation, the State now has a report that elaborates on the social and political considerations of health care. It calls for the blunt instruments of tax-and-spend mandates and lacks a finesse solution to an otherwise difficult situation.

All that remains is for the legislature to thank everyone, give out certificates and shelve the report. Then the staff and commissioners can have their 5 minutes in the sunshine being interviewed by the media. This will give them a pulpit from which to preach their ideology.

Let me make a prediction. Once this legislative session is complete and the 2008 elections are well underway, a new conventional wisdom will emerge. "Let's wait and see what the Feds come up with". Soon it will be 2010 and it will be back to business as usual.

Unionize for productivity? Right

The uproar over Governor Ritter’s executive order setting all state employees on a path to unionization has been extraordinary. Business outrage, legislative indignation, and editorial denunciation all indicate a political event of seismic proportion. Politics aside however, thoughtful observers were even more astonished by the governor’s bold assertion that his decision was a sure path to improved service and greater productivity on the part of state workers.

Unfortunately there is no persuasive evidence in this state, in this country, or for that matter the world that supports this assertion. In fact the preponderance of evidence points in precisely the opposite direction – poorer service and lower productivity. The historical record makes this quite clear.

Unions reached their peak a half century ago when nearly one in three American workers were members. During the first half of the 20th century unions provided a much needed corrective to the excesses of the capitalist system. Their valuable role in bringing about a reasonable equilibrium between labor and management cannot be denied.

Time however has passed unions by – a helpful influence in the first half of the last century became a dragging anchor in the second. Having outlived their usefulness to the American economy and American workers alike, unions have seen a steady decline in membership. Yet concurrent with this fifty-year union decline, the American economy, and the well-being of the American worker has soared to hitherto unimaginable heights. Positive developments in technology, competition, trade, deregulation, and management have fueled this astonishing explosion of productivity; unions have only hindered it.

Today, fewer than one American worker in seven belongs to a labor union, and it is most instructive to see where you find them.

Unions in the private sector are almost an endangered species, and those industries where they remain prominent – such as auto manufacturing- are in deep trouble owing to utterly unsustainable union contracts. In the public sector, however, union membership, wealth and political clout is thriving. Absent the public, sector unionism in America is a non-entity.

It is most useful to ask what explains this stark dichotomy between private and public sector unions.

Joseph Stalin famously described his success in disposing of political opponents with the phrase “No man, no problem”. In the union context that might read “no competition, no problem”.

What school districts, municipalities, state and federal government have in common is that all are essentially monopoly enterprises with no competitors.

Let us be clear that public service has been an honorable, satisfying, and worthwhile calling long before it encountered unions and will continue to be with or without unions.

It is equally clear that union leaders understand better than anyone that competition for them is the kiss of death and they will do absolutely anything in their power to snuff it out before it can demonstrate its inherent popularity and effectiveness. An example of this “preserve the monopoly at all costs” behavior is the recent flood of union money and manpower that poured into Utah to pass a ballot initiative overturning a new law that granted school vouchers to poor children.

This behavior and all the history that proceeds it should tell us all we need to know about any connection between unions and either productivity or the public interest.

Bill Ritter is a decent and sincere man who obviously wants what is good for Colorado. No doubt a case can be made for his recent executive order but trying to justify it as promoting improved service and productivity flies in the face of all history and common sense.

Not long ago Governor Ritter wisely and courageously vetoed a naked union power grab that had been jammed through the legislature by the usual suspects. Though incurring the furious wrath of his party’s left wing which had long viewed him darkly, Ritter caught the eye of the nation and suggested that Colorado had elected a truly “New Democrat” who harkened to the better angels of his party’s distant but honorable past, a man ready to defy the special interest on behalf of the public interest.

On a bleak Friday afternoon these illusions were shattered. We must all hope that for our governor and our state better days are ahead.

Colorado Education Commissioner from 1997-2007, Dr. Moloney is also a former member of the NEA and the Teamsters Union

More on Parmar, Connerly, Romney

Following up our 8/12 radio show, a reminder that you can learn more on Moses Parmar's ministry to India's untouchables at the Dalit Freedom Network site, and you can track Ward Connerly's work for color-blind law through his American Civil Rights Institute. My prediction of Mitt Romney's nomination next year (not an endorsement at all) moved New York listener Lois Porlier to write that Amy Ridenour and Sally Pipes have concerns about Romney's health care policy and some of his Massachusetts constituents doubt him on social issues. Acknowledging one must consider the source, Lois also pointed out this from Newsweek and this from Democratic Party strategists. No question, Mitt still has a long way to go from yesterday's straw poll in Iowa to next year's Republican convention in Minneapolis.

A radio entrepreneur dissects the Fairness Doctrine

The First Amendment states: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." This was worked out in Colonial and Revolutionary times with the correct assumption that the government would almost never be neutral. Freedom of Speech has always meant… Absence of Government Control.

The Fairness Doctrine Defined: Government requirement that when a certain position on a controversial issue of public importance is broadcast, the broadcast licensee is required to present the other side of the issue.

Fairness Doctrine History: The Radio Act of 1927 created the Radio Commission (later becoming the Federal Communications Commission or FCC) and its successor the 1934 Communications Act created a government system of granting licenses for publicly owned broadcast frequencies. The major condition attached was to “operate with public interest.” The FCC was charged with enforcement.

Starting in 1929, the “public interest” condition was interpreted as requiring that a licensee provide “ample play for the free and fair competition of opposing views on all discussions of issues of importance to the public.”

Over the years this developed into the Fairness Doctrine and became an integral part of FCC mandate. In 1949, the FCC issued two requirements regarding Editorials on Radio… “Broadcasters must give adequate coverage to public issues and this coverage must accurately reflect opposing views on the issue.”

In 1959, Congress amended Sec. 315 of the Communication Act with the Equal Time Provision… “The licensee that allows one candidate to use the broadcast station shall afford equal opportunities to all other candidates for that office.” It also stated that nothing in the amended Section 315 relieves Broadcasters of the “obligation” to “afford reasonable opportunity for the discussion of conflicting views on issues of public importance.”

From 1959 to 1981, The FCC consistently interpreted the 1959 Amendment to Sec. 315 as codifying the Fairness Doctrine. In fact, in the landmark 1969 Red Lion Case the Fairness Doctrine was upheld by the Supreme Court. The Court cited “scarcity of stations and codification of the Fairness Doctrine” as the primary reason for the decision. The Court also stated “the decision could change if it was demonstrated that the Doctrine reduced rather than encouraged discussion of public issues.”

Interestingly in 1974, a law imposing an obligation of fairness on newspaper editorials was declared invalid as applied to print media in Miami Herald vs. Tonilla. Print media has no Fairness Doctrine.

In 1981 the FCC, perceiving changes in the conditions cited by the Supreme Court in Red Lion, asked Congress to repeal the Fairness Doctrine. No action was taken. In 1985 the FCC determined the Fairness Doctrine was not codified in 1959. In 1986, the D.C. Circuit Court upheld the FCC by ruling that the 1959 Amendment did not codify the Fairness Doctrine.

In 1987 the FCC formally abolished the Fairness Doctrine on grounds that: (1) It did not serve the public interest. (2) The scarcity of media issue had disappeared. (3) It violated The First Amendment.

Since 1987, broadcasters have operated without the Fairness Doctrine and talk radio has flourished. During this time there have been many calls by public figures for reinstatement and bills have been repeatedly introduced in Congress to codify the Fairness Doctrine… all with huge public negative reaction.

In 1988, Congress overwhelmingly passed a bill reinstating the Fairness Doctrine, but it was vetoed by President Reagan. In 1991, with massive grassroots support, President Bush threatened to veto a similar bill, thus stifling a second attempt on Congress’s part to resurrect the Fairness Doctrine. In 1993 the 8th Circuit Court of Appeals ruled that the FCC had acted in a reasonable manner in abolishing the Fairness Doctrine.

Since the 2006 elections, the almost daily cries from legislators to bring back the Fairness Doctrine has reached high fever pitch… as if something as significant as the 2008 election outcome depended on it. No doubt this will intensify. There are two ways the Fairness Doctrine could be brought back: Either the FCC simply reinstates it, or Congress codifies it.

If the Fairness Doctrine is reinstated, history indicates these things (and more) will happen:

1. The First Amendment, which these days seems to be the number one target, will again be significantly depreciated, further eroding our Freedom of Speech.

2. The political party in power will use the Fairness Doctrine to silence critics as was well documented during the Kennedy and Nixon administrations.

3. Many leading broadcast licensees will see their licenses at risk and will play it safe by imposing strict speech control.

4. The national and local robust town hall meetings known as talk Radio will quickly become mundane, dull and milk-toast-like and mostly disappear.

5. Religious speech will be threatened by new government guidelines regarding what constitutes controversial and public issues… issues like same-sex marriage and abortion.

6. The overwhelming majority of the time the public will hear only the Liberal viewpoint presented as “fair and balanced” by the three major TV Networks, the vast majority of newspapers and the major magazines. Déjà vu!

Media Scarcity: Media access has dramatically changed since the 1969 Supreme Court Red Lion case. Today there are many more radio stations, even in small communities, satellite radio, internet radio and the internet itself, plus an abundance of FM stations which were few in 1969. Everyone agrees scarcity is no longer an issue.

Conclusion: The Fairness Doctrine’s frontal assault on Freedom of Speech not only trashes a vital part of our Constitution but does great harm to our country, nationally and locally by stopping a healthy public debate that is essential in our common search for truth. Preventing the reinstatement of the Fairness Doctrine is… A HILL TO DIE ON!

Stuart Epperson is Chairman of the Board, Salem Communications Corporation. Among Salem's many media properties across the country are 710 KNUS, the flagship station of Backbone Radio, and Townhall.com