It is often assumed that Democrats seek more government while Republicans desire less.  The recent history of "healthcare reform" demonstrates why this assumption is incorrect.

The Republican’s politics of compromise in health care, of sacrificing the principle of individual liberty to any mob that claims to have a “need,” necessarily leads to the same destructive end as the leftist politics of the Democrats.

The politics of compromise, or “bipartisanship” as it is presently called, in reality represents the sacrifice of the principle of individual rights to Statism.  Statism is the idea that man’s life and his productive efforts ultimately belong to the State (1).  This fact is no more visible than in health care.

The history of Health Maintenance Organizations (HMOs) is one illustration of this point.  Richard Nixon first introduced the concept of government created and supported HMOs with an “option” under Medicare and Medicaid in March of 1970.  Written into law in 1973, the Health Maintenance Act produced a morass of federal regulations establishing HMOs as government-created and tax-supported entities (2). 

Rather than championing for the elimination of Medicare and Medicaid on the principle of individual rights (of capitalism), the Republican Nixon administration compromised and sacrificed the principle of a free market in medicine.  By legislating more government controls in the health care industry, the effect of the HMO Act of 1973 was the rationing of medicine and the gradual enslavement of physician and patient.  

The Kennedy-Kassebaum Bill is another concrete example of the Republican version of compromise--of sacrificing a principle one holds to its ideological opposite, thereby creating the opposite effect one desires.  The Kennedy-Kassebaum bill was a package-deal compromise supported by Republicans and passed in 1996 by a Republican controlled Congress (3).

This bill contained elements of freedom and force in the healthcare market.  Kennedy-Kassebaum initiated Medical Savings Accounts, which increased many freedoms for physicians and patients, but this bill also contained draconian provisions which expanded government’s regulation of the healthcare industry and essentially eliminated a physician’s constitutional right to due process (4).  
The Republican’s current slogan of “compassionate conservatism” is the beginning of a grand compromise with Democrats.  In health care, “compassionate conservatism” essentially means the sacrifice of the health care industry to the Democratic vision of the welfare state. 

During last years' Presidential campaign Democrats and Republicans were, in principle, in full agreement that an expansion of Medicare should take place under a new prescription drug program.  There was some quibbling over the details, but Republicans had already decided to compromise and to sacrifice the drug companies on the altar of altruism.  The idea that an expansion of Medicare should take place was taken for granted by both Republicans and Democrats, without argument or debate.

What was and continues to be evaded is an important fact: expanding Medicare to include a prescription drug program not only represents a vast new increase in government spending, but, in today's "Managed Care" environment, it is the perfect Trojan Horse for government to impose price controls on the drug industry.

Consider the fact that because of Medicare and Medicaid, physicians are by de facto already subject to government imposed price controls. Physicians who currently accept Medicaid/Medicare patients become subject to a morass of government regulatory agencies that are increasingly enforcing legislation which, in the interest of "equality," make it criminal to charge a non-Medicare patient more for a service than what Medicare is willing to reimburse.

Reimbursement rates for physicians for services they provide to Medicare patients are not determined by market forces, but by bureaucratic whim.  On the average, Medicare currently pays approximately 75-80% of what it actually "costs" to produce a particular service, and these rates are likely to decrease even further.  Since, under "Managed Care," HMO's and many private insurance companies are adjusting their reimbursement rates to those mandated by Medicare, government imposed price controls are already a reality for physicians, including those who choose not to treat Medicare patients.

It is not difficult to extrapolate what has already happened to physicians under Medicare to what will likely happen to drug companies if Washington succeeds in its attempt to expand Medicare benefits to include prescription drugs--price controls for drug companies.

As has already occurred with most of the services provided by physicians, once prescription drugs are granted the status of a Medicare "entitlement", under "Managed Care" it will be easy for Washington to impose price controls on drug companies.  Once prescription drugs are an entitlement, most of the legislation and bureaucratic apparatus is already in place for Washington to determine, by whim, what the cost of a particular drug will be, not only for Medicare patients, but for all Americans.

The effect of this will be the same as what is now happening to physicians.  A stifling of innovation, fewer physicians who provide fewer services and a slow decline in the quality and availability of services.  The Republicans are now prepared, in the name of “compromise,” to sacrifice the drug companies.  In any compromise between force and freedom, only force can win. 
The root of the Republican’s failed politics of compromise in health care is that Republicans hold the same ethics as the Democrats—altruism.  Altruism rests on the principle that man has no right to exist for his own sake and that self-sacrifice to others is his highest moral ideal (5). 

Only a conscious rejection of the altruistic idea of self-sacrifice and the embrace of the morality of rational self-interest can save medicine.  If medicine is to flourish, both physicians and patients must embrace the morality of the trader principle, which demands no sacrifices and no force, but the freedom of physician and patient to act in their own rational self-interest by trading value for value.

References 

(1)           Rand AR.  Introducing Objectivism.  The Objectivist Newsletter.  1962;35.  In The Ayn Rand Lexicon, ed.  Harry Binswanger (Penguin Books, New York, NY), 1968, p. 474-475. 

(2)           Rizza C. The history of HMOs:  A Chronology of the Development of Health Maintenance Organizations (Americans for Free Choice in Medicine, Newport Beach, CA), 1995. 

(3)           Association of American Physicians and Surgeons.  “Clinton Crimminalization of Medicine Enacted by Republican Controlled House.”  Emergency Action Alert, 1996. http://www.aapsonline.org/aaps/ (16 Mar. 2001) 

(4)           Ibid. 

(5)           Rand AR.  Faith and Force:  The Destroyers of the Modern World.  Philosophy:  Who Needs It.  (Penguin Books, New York, NY), 1982(pb), p. 61.
 

Dr. Richard Parker, a practicing emergency physician in the Dallas, Texas area, is a senior writer for the Ayn Rand Institute in Marina del Rey, Calif.  The Institute promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead. He is also a writer and editor for Objective Medicine, an site devoted to presenting intellectual fuel to doctors and other rational individuals who wish to contribute to reversing the destructive nationalization of medical endeavors. You can visit Objective Medicine at http://www.objectivemedicine.org.