News Column

Government Hurts Health Care

May 31, 2014



WASHINGTON, May 31 -- The National Center for Public Policy Research issued the following news release:

Whether it is the Veterans Administration, ObamaCare, or other failures and scandals, the verdict is in on government's involvement in the health care system: it doesn't work, say policy experts at the National Center for Public Policy Research, who in addition to publishing groundbreaking research, have participated in seven shareholder meetings of health care companies over the past six weeks, and will attend two more over the next week.

On Tuesday, National Center for Public Policy Research Free Enterprise Project Director Justin Danhof attended the annual meeting of Merck pharmaceuticals in New Jersey, where he had both the opportunity to ask a question in the open meeting and to meet privately with CEO Ken Frazier. He found Mr. Frazier far less bullish on government involvement in the health care system, including about ObamaCare, than at prior meetings in which National Center for Public Policy Research questioned him (see 2013 here; 2012 here; 2011 here).

National Center for Public Policy Research Health Care Policy Analyst Dr. David Hogberg, who in recent weeks has attended the shareholder meetings of Humana, WellPoint, Bristol-Myers Squibb and Johnson & Johnson, speaking with the CEO of each, has written extensively about the problems with health care services delivery under government-run systems, including the Veterans Administration and ObamaCare. He says government-run health care is, in a word, "risky."

At Merck, Danhof reported, "Mr. Frazier said that the company was very focused on creating a free-market environment for drug innovation where market forces dictate price and availability. Mr. Frazier said that the pharmaceutical marketplace doesn't need outside actors interfering in pricing decisions - which I took as a direct shot at politicians such as Henry Waxman (D-CA) who have done just that."

Danhof's public exchange with Mr. Frazier can be seen on YouTube here.

"When I spoke privately with Mr. Frazier about specialty pharmaceuticals, he noted that with Sovaldi, its parent company Gilead Sciences, had perhaps stubbed its toe in messaging. As a result, the mainstream media focused heavily on product pricing, but ignored Sovaldi's incredible cure rate and speed," said Danhof. "And once the mainstream media set the narrative, certain politicians such as Waxman were ready and willing to attack this life-saving industry since they have no use for free-market capitalism. Mr. Frazier and I both agreed that the industry must do a better job going forward of educating the public about the need for, and benefits of, the specialty pharmaceutical market."

"In response to another shareholder question about taxes, Mr. Frazier referenced his response to me about undue interference in the marketplace. He bluntly stated that the U.S. corporate tax rate of 35 percent was very high and places American companies at a competitive disadvantage compared with European and Japanese companies that can essentially use tax arbitrage to lower rates. Mr. Frazier also noted that U.S companies are often taxed on work that simply isn't done here in the U.S."

"Mr. Frazier also faced three questions about ObamaCare, one general and two from retirees who are now paying more out of pocket for drugs and procedures. His answers about ObamaCare were very subdued," noted Danhof. "Coming from a CEO that has firmly and repeatedly defended ObamaCare in the past, Mr. Frazier could only muster that the law is still in its infancy and Merck will monitor its progress and work to ensure quality care and access. This is a far cry from a CEO who once was one of ObamaCare's loudest backers. This shows the difference between ObamaCare the idea and ObamaCare the law."

"President Obama's perverse dream of inflicting government-run health care on America is quickly dying the death of a thousand cuts," said Amy Ridenour, chairman of the National Center and author, with Ryan Balis, of the 2009 book about government-run health care systems, "Shattered Lives" (free pdf copy here). "Even as ObamaCare continues its disastrous rollout, the universal truth about government health care and waiting lists has hit the headlines in the Veterans Administration scandal. Government-run health care always means waiting lists, even when officials try to fix them. In Britain, for example, higher-ups mandated an end to long waiting lists within hospital emergency departments. Since government health care doesn't work well, the hospitals were unable to end the waiting lists in any proper way, so they dealt with new rules by forcing the patients to stay in ambulances until they were ready to see them. On paper, the waiting lists were shortened, because the clock didn't start ticking until the patient entered the building. But were patients better served? No. Likewise, no one should expect the VA to be fixed."

The National Center's Justin Danhof will be attending the Aetna shareholder meeting today in Denver, at 9:30 am local time. On Monday, National Center President David Ridenour will attend United Health's shareholder meeting in Las Vegas.

The National Center has attended 40 shareholder meetings so far in 2014. It attended 33 in 2013.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors. Contributions are tax-deductible and greatly appreciated.

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