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The Cure: How Capitalism Can Save American Health Care

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David Gratzer's "The Cure: How Capitalism Can Save American Health Care" is perhaps greatest paen ever written to the one true religion: laissez-faire capitalism. It's a celebration of the triumph of the bottom line, an adoration of profit, and a joyous prayer of hope for the perfect orderliness of a soylent green society.

Over the last 30 years, we've stood in awe as we've witnessed unregulated capitalism's transformative powers. Where once our edible ecology lacked such keystone species as E.coli and salmonella, our meat, fruit, vegetables, and water have become veritable Edens for those precious pathogens. Where once financial regulation checked glorious greed and encouraged the unbearable ennui that comes with stability, our new, deregulated, economic environment has brought excitement to investing and incredible profits to those few deserving oligarchs who were most prepared with the connections to exploit the system to their advantage.

Now, David Gratzer and the insurance industry wants to do the same for health care. He's heard the complaints. He's read studies like the 2004 Commonwealth Fund report which looked at satisfaction in five nations. He saw that they found that U.S. Americans were by far the most dissatisfied with their health care system (over twice as dissatisfied as Canadians)and less likely to receive care because of cost (17% of Canadians vs 40% of U.S. Americans).

Yes, he's studied it thoroughly and has decided that the problem with the U.S. system is that it is not capitalistic enough. It needs to be deregulated like the food and banking industries. The problem isn't lack of access, it's about deciding who deserves what level of care--it's about rationing health care by one's ability to pay.

Even more importantly, it's not a matter of whether someone can receive the care they need, but whether society will allow him or her to access a free market solution to pay for that service. Is our society advanced enough to provide a patient's loved ones an opportunity to sell their organs to pay for needed health care? Have we achieved that level of compassionate capitalism yet? Do the poor and working classes care enough about life to make sacrifices to preserve it? If not, do they really deserve all of the benefits of life?

These are the fundamental questions to which Gratzer alludes, but, unfortunately, fails to fully address in his book. That's a shame, because these are the questions that must be answered if we are ever to fully achieve the libertarian society he envisions.

That said, Gratzer does honor laissez-faire capitalism with the blind worship that it deserves as the answer to everything (along with lower taxes and drilling in the ANWR). That's why I'm giving his book four stars.

I'm surprised to be the first to review The Cure, but it's a good enough book to have a review even if it has to be mine. I read this last week, along with Crisis of Abundance: Rethinking How We Pay for Health Care, by Arnold Kling. I enjoyed them both equally, would recommend both as suitable introductions to understanding the problems of our current health care system and frequently-proposed alternatives.

The strong point of this book is that the author is licensed in both the U.S. and Canadian health care systems, and very familiar with both. Proponents of alternatives to our current system often seem to overlook the fact that all existing alternative systems also have problems, which cannot be improved by mere ignorance.

Combining this book's real world experience with the Kling book's hard-headed focus on economics provides much to chew over in the debates surely about to begin again in the U.S.

The Cure: How Capitalism Can Save American Health Care is an excellent resource on health care economics and the history of health care policy. The author is a free market economist, a physician and a senior fellow at the Manhattan Institute. The research that went into this book has been endorsed by Milton Friedman (in the Foreword) so it should be of appeal to free market advocates.

Dr. Gratzer persuasively argues that the fundamental problem with U.S. health care is too much government regulation. To argue this, Dr. Gratzer first notes how the employer-based health coverage arose as an unintended side effect of a tax law, which allowed employers to write off health care expenditures for their employees. Moreover, Dr. Gratzer argues that both Democrats and Republicans have both essentially offered more government regulation as the solution to health care, which has not worked. The Democrats, such as the LBJ Administration, promoted enormously inefficient programs such as Medicare and Medicaid. The Republicans, have promoted bureaucratic HMOs, which have led to similar large-scale inefficiencies.

Driving this point further, Dr. Gratzer greatly details the harmful economic consequences of government regulations in health care. For example, the Emergency Medical Treatment and Active Labor Act (EMTALA) forbids hospitals from denying any patient for emergency care. The economic reality is that this leads to hospitals suffering economic losses by being forced to treat patients, regardless of if they can pay for the care, which ultimately leads to the closing of hospitals. Furthermore, insurance mandates, such as benefit mandates, rating mandates and bans on out-of-state insurance, restrict competition and lead to higher insurance premiums. Dr. Gratzer also thoroughly analyzes the harmful economic consequences of the FDA, Medicare, Medicaid and much more.

This book also dispels many common myths about the quality of U.S. health care. For example, statistics are often cited to argue that Canadians and/or Europeans have higher life expectancies than U.S. citizens. Dr. Gratzer argues that such studies mistakenly compare statistics on *health* when they should be on *health care*. There numerous lifestyle habits that differ between cultures, such as frequency of exercise and diet, which effect health. Dr. Gratzer proposes examining statistics on cardiac arrest patients, to see which country offers better treatment. In these respects, Dr. Gratzer argues that the U.S. system is clearly superior to its universal health care counterparts.

As one can infer, Dr. Gratzer proposes free market solutions to fix American health care. Specifically, he proposes drastically reducing the various regulatory excesses that he delineates throughout his book as well as embracing Health Savings Accounts. As always, Dr. Gratzer corroborates his arguments with real-world success stories, such as the success of Whole Foods' adoption of HSAs for its employees.

I highly recommend this book to all fans of free market capitalism with an interest in health care policy.

Ron Paul 2012, liberty not more government
This book does a good job of advocating
for free market solutions compares to
failing Canadian system

The Cure does a good job of illustrating the diverse ways in which our health care system is inefficient and expensive compared to it's free-market alternative. The only problem, and the reason that I, as a hypercritical anal-retentive perfectionist, take off a star, is that Gratzer ironically could be more consistent in the application of those very principles, more organized in his argument, and more illustrative with examples. His whole discussion of the FDA, for example, for the most part argues within the framework of retaining the organization. But, as his reference to 'public choice' theory shows, he's aware that as long as the agency exists, it will have incentives to act less efficiently than free-market alternatives, one example of which would be, as he mentions, the Underwriter's Laboratory with electrial devices, which works well. More concrete examples of the utter wastefulness of the third-party payment system would also help the reader understand how consumer lack of motivation is probably the biggest cause of skyrocketing costs. Also, he ignores as a formal point, although he mentions in passing, the huge suits and judgements brought and allowed against various hospitals, pharmaceuticals, and other health groups that motivate them to engage in CYA testing across the board, thus also raising prices.

I gave this a shot, hoping to get a different perspective on the issue of health-care in the United States. Wasn't impressed with Gratzer's take. Some of his language seems too slanted. I understand the strategy of spinning a fact to serve one's argument, but he over-spins to the point of just being down right erroneous. For example on page 156 under "Safer Drugs" he writes the following: "Here's the FDA's dirty little secret: clinical trials involve a relatively homogenous group of healthy individuals who collectively are totally unrepresentative of the people who actually take pharmaceuticals." Uh, wouldn't that be the "dirty secret" of pharmaceutical companies and the CRO's employed to conduct clinical trials? This type of shabby spin, coupled with the sensationalist language ("dirty secrets"...come on) that made the book feel more like a prescription of propaganda. I'm just happy that I didn't spend money on this. Libraries are a good thing.

David Gratzer, being a licensed physician in Canada and the US, is a credible critic of proponents of socialized medicine. He does an excellent job of providing data to support his points, and most of his points are that people supporting the concept of a single payer for health care use anecdotes rather than convincing data to show how the US health system is failing. He uses hard endpoint data, such as diagnosis of breast cancer in early stages, cancer survival data, and survival after heart attacks, to show that health care in the US leads other countries in the world and espcially those with single payer systems run by the government. He makes the point that being "politically correct" doesn't necessarily make one "scientifically correct". The way he criticizes the mind-set of socialized medicine reminded me of the methods used by Thomas Sowell in his 1995 book, "The Vision of the Anointed". He pointed out that most of the "policially correct" set ignore factual evidence. Gratzer finds these arguments and provides the evidence that is often ignored. This should be a must read for those in positions to influence the debate.

If only politicians would give the ideas in this book a chance. As the author skillfully argues, American health care is very good, but the American health care system as it currently exists is a huge mess. The good news is that the author doesn't just point out the problem. He explains why there is a mess and then gives prescriptions to make things better. The author is an MD with experience practicing in Canada and the U.S. so is able to speak to both the socialized (single-payer) system and the U.S. health insurance based system.

The author's thesis is that the U.S. health care system is in such shambles because of the way the system is designed. The current system prevents the free market to function like any other sector of the economy. The solution is more choice, more competition, and fewer regulations.

One of the key problems is the way health care is paid for--it is treated less as insurance and more as pre-paid healthcare. For example, you don't insure your car for routine maintenance but mainly for high cost and catastrophic accidents. For routine maintenance, you pay out of pocket based on a consideration of price and quality of an auto repair shop. The same should apply to health care.

The author argues persuasively that a routine visit to a doctor should be paid for by the patient, whereas an operation would be paid for by a high-deductible insurance policy. The patient would be able to pay for routine visits through their own health savings accounts. A shift to this paradigm will bring down costs for everyone and make health care more affordable.

The author also provides solutions to the problems and rising costs with Medicare and Medicaid which are both going broke. He offers solid solutions there, but it's hard to see the politicians going for them.

For those that want to educate themselves on how to fix the health care system, this is a must read.

I've enjoyed Dr. Gratzer's book immensely; I've been a fan of his ever since his epic battle with David "Imp of the Perverse" Kucinich. Here is a man, I thought, with such courage of his convictions that no fact is salient enough to shake him, no statistic hefty enough to rock the pillars of Freemarketianity upon which his faith so surely rests.

I must, however, give his book only three stars - and, I think, so must every libertarian. The problem with single payer health care is not that the government controls every medical decision, any more than the problem with American "you payer" health care is that HMOs control every medical decision. The problem is that, in both systems, it is the plutocracy of "doctors" who callously tell patients of all income brackets what kind of health care they "need" and thus drive the cost of health care ever and ever higher. What America needs is to get rid of this autocratic system once and for all and embrace the principles of DIY health care. We don't need European or Canadian style health care; we should be looking to Somalia for our model.

Several months ago some "doctors" told me that I desperately "needed" a liver transplant to go on "living." I told them that, as I was a firm advocate of DIY health care, I would not be relying on their "expertise" to cure me. At any rate, I couldn't even come close to affording the procedure, and as for raising my taxes? Well, I suppose saying "over my dead body" might be a little redundant at this point.

Sure, there should still be doctors for those who can afford them, but the rest of us need not concern ourselves with that. Doctors should become something like a jewel-encrusted platinum cell phone, a luxury silly rich people can afford, but the rest of us Real Americans know we can do without; in fact, we know we're happier without such clutter in our lives. Instead, the marketplace will provide us with simple DIY kits for heart surgeries, spinal taps and kidney biopsies, complete with tools and instruction manuals, reasonably priced and readily available at your local Home Depot or Costco.

For my own surgery I've constructed a Home Liver Transplant kit, which, though a little crude, will do the job nicely. It was tremendously difficult to find a reciprocating saw small enough for my needs (and I can't really say where I got my new liver); the paucity of supplies is, indeed, the only real barrier to the DIY Health Care enthusiast, but my faith in the market is such that I know it will correct such oversights in time. Heck, if my kit works, I could be the next DIYHC millionaire! Not too shabby!

I hope Dr. Gratzer will consider the changes I advocate; I might, perhaps, be able to write a second preface for a new edition of his book - one which, of course, will go after the preface written by His Holiness Milton Friedman.

"The Cure" is possibly the most biased, useless book on American health care - omitting problems with conservative nostrums, and overstating issues with government involvement.

"The Cure" begins by relating stories of patients waiting for care in Canada's publicly financed health care system, pointing out that some die as a result. Far more frequently reported deaths in American E.R.s waiting for care are ignored. Gratzer belittles the uninsured problem - pointing out that most reported as such are in that category for only part of the year, while ignoring the fact that coverage breaks create long-term non-coverage of pre-existing conditions and liability for overwhelming medical bills.

Gratzer's prime argument is that restricting patient choices (HMOs; Medicare and Medicaid) brings higher costs - since HMO restrictions are primarily aimed at holding costs down, and most Medicare and Medicaid do not limit choice, I have no idea what this is based on. He then goes on to complain about Medicaid's basically eliminating deductibles - perhaps he'd rather wait until they show up in the E.D.? (A 6/26/08 WSJ article reported that 38% of uninsured delayed/did without care because of cost concerns; 17% of those with insurance did so also.)

Gratzer's ire is next directed at FDA delays in approving new drugs - ignoring the fact that the vast majority of "new" drugs now are "me-too" versions of existing drugs (eg. Vytorin - 20X as expensive as equivalent existing drugs), and a few even are deadly (eg. Baycol, Vioxx, Avandia, Thalidomide). Drug companies complain about billions required to bring new drugs to market, then forget to mention that most of these funds are supplied by government research grants, that much of their research is statistically invalid and/or misleading, and that Americans pay more than any other nation for prescription drugs.

Medical Savings Accounts (MSAs) are touted as an alternative to employer-provided health insurance - great if one has a 6-figure income, useless at near minimum wages. Gratzer also ignores the high administrative costs and selective enrollment/disenrollment machinations of insurers - especially those covering small businesses and individuals. Then there are the embarassing comparisons between costs of privately- and publicly-provided Medicare coverage and/or drugs.

Wennberg's practice-pattern variation is covered - way too briefly. Worse yet, Gratzer fails to point out that this presents an ideal opportunity for government intervention to reduce costs while improving quality. (CT angiograms are widely condemned as greatly overused to build revenue while having little medical value, at the same time subjecting patients to cancer-causing radiation 1,000X that of a regular x-ray.) Similarly, the 100,000+ deaths/year due to medical errors. (The latter have been shown to be best addressed through computer-assisted prescribing, steering patients to highest-volume providers ("practice makes perfect"), and intensivists in the ICU.)

The "good news" is that Gratzer correctly identifies the paucity of health care outcomes data as impeding objective consumer choice, then fails to recognize that this has best been addressed to-date by government actions (eg. N.Y. vs. CABG results) and that it is always strenuously opposed by health care providers with capitalist motives. On the other hand, those needing emergency care, especially out of their normal area, are not in any position to use such data - unless enforced somehow by government mandate.

Neither conservatives nor government interventionists (eg. today's New York Times reports that competitive bidding offers considerable savings in medical equipment) have all the answers. Gratzer should start over, using that as a premise.