What should we do about health care?
This political football has been around for a while. Ever since the IRS exempted employer contributions to health insurance, health care has been a child of the Federal Government. Now Medicare transfer payments are often the largest line item in State budgets. And an inefficient health care system threatens our economic vitality.
One solution is to nationalize, like Canada or France. Many call this the “single payer plan.” But most people don’t think a Federal Health Service wouldn’t be any more efficient than the Post Office. That’s not likely to solve our problems.
Proponents of reform ignore the fact that 30 of the 40 largest health care companies are located in the US, providing both jobs and new treatments. They just look at the health outcomes of other countries and expect that the necessary innovation will come out of somewhere, or nowhere. And innovation is the mother’s milk of health care success.
Plans that destroy the economic incentives for innovation will only result in a sick system.
Douglas R. Tengdin, CFA
Chief Investment Officer
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