Sen. (and Dr.) Tom Coburn on Health Care

Oklahoma’s junior senator, Republican Tom Coburn, is best known as a staunch conservative, an opponent of abortion, and one of the strongest voices against wasteful government spending. But Coburn is also a doctor. According to the Almanac of American Politics, Coburn has delivered over 4,000 babies and served on medical missions around the world.

Which causes his strong opposition to President Obama’s health care “reform” proposals.  HUMAN EVENTS Editor Jed Babbin and intern Kathryn Gaines interviewed him about that on June 17.  Here is a transcript of the interview edited for length.

JB: Senator, is there a health care crisis in this country?

Sen. Coburn: Well there is a cost crisis and an access crisis. When people want to be critical of health care in this country, they look at death rates and they look at life expectancy, but when you normalize life expectancy for the American style of living, our life expectancy competes with everyone.What we don’t do well is neo-natal deaths. We don’t do well there, but that comes from one segment of the population where we’ve addressed with a lower level of quality (which is mainly enabled by Medicaid and Title 19) to moms. So there is a crisis for cost, and there is a crisis in terms of access and half of that crises for access is in Medicaid because 40% of physicians 60% of sub-specialists won’t see a Medicaid patient because reimbursement doesn’t pay for their time to see them.

JB: There are a lot of people, the president for starters, who are saying we are having a crisis in the quality of medical care here. As a 17-year cancer survivor, I have a problem with that argument

Coburn: Well I’m a 35-year cancer survivor and a 6-year cancer survivor and I would take great issue with that. Look, do we have disparate qualities and do we have disparate qualities related to cost? Yes, and that is why this debate is so important, because if we get it wrong we not only raise the cost, which they want to do (but I think we can cut costs in half in healthcare). But Number two, is their proposal tears up the best health care system in the world, that accounts for 70% of all innovations in the world, in health care. In health care — the advances in human care — three quarters of them come from this country under our system.

JB: Why is it that I think you see when someone from a socialized medicine country, even Canada or Britain, they get into a real jam, they are coming here, why?

Coburn: Because the leading edge of technology, if they have the resources, they’ll come where the leading edge of technology is. Even if they don’t have, like the lady from Canada with a brain tumor, she mortgaged her house to come get her brain tumor taken care of here, she was on the waiting line for 6 months, she would have been dead. What we shouldn’t get is lost in the weeds.

JB: The veterans?

Coburn: No. After WWII, we had a bill which established the ability of communities to build hospitals, prior to that the hospitals were all owned by the doctors. I mean, go look at them, the doctors owned them and we didn’t have price inflation in health care. As we have ratcheted up the sophistication in our healthcare system, and this disconnected the patient from the cost, we have this problem [of price inflation]. And the real problem is the unsustainable growth in cost.  Now why is it there? Some people argue part of it is technology, and I agree part of it is. But most of it is because we don’t have real forces allocating scarce resources, and we don’t have real consumers who are making economic choices based on their pocket book because someone else is paying their bill.

JB: Let’s go to, well I guess it’s not even a bill yet, but its kind-of sort of an outline for a bill that Sen. Kennedy’s crew came up with. I’ve seen a lot of numbers tossed around. They’re saying that for the mere cost of about a trillion dollars in the first 10 years, there would be an increase of 16 million people covered by health insurance. First off, the costs seem completely out of control in this proposal. Do you agree?

Coburn: Well, first of all, that’s not the cost. That does not count the costs that are going to go to the states, to change Medicaid from 100% to 150% — which I just heard Tennessee will be 1.2 billion dollars a year. I just asked Oklahoma what our state Medicare costs will go to with 150%. So at a minimum, you’re talking for state costs probably another 15-20 trillion dollars over the next 10 years just to ramp up Medicaid.

JB: forgive me for the interruption, but 150% of what?

Coburn: Of Medicaid of poverty level. Right now the federal Medicaid law is 100% of poverty. Changing that to 150% of poverty level puts all this cost on the states. And that hadn’t been scored at all in the bill. [Ed. note: Medicaid provides health care benefits to the poor and makes benefits available for people who have 100% or less than the federally-defined “poverty level” of income.  The 2009 poverty level income for a family of four is $22,050].

JB: Well there are a lot of things [in the Kennedy bill] which have not been scored. Because we don’t know what level of the poverty level they are going to link this to, we don’t know what other changes in Medicaid they are going to propose. Let’s start right there though.  What are the big holes that have yet to be drafted in the Kennedy bill?

Coburn: The first big [hole] is, do we want a government program? Whether you do it from a co-op or a federal, you are still going to have a federal government co-op. Tell me what program in the federal government works effectively and efficiently? Just name one off your head?

JB: Our combat pilots are pretty good.

Coburn: They are not necessarily efficient. They are effective. Our military, our front line military, effective. The cost behind that is worth $50 billion in waste a year at the Pentagon.  So the product is good, the efficiency of getting the product is not. So there isn’t anywhere where you are going to have somebody who doesn’t have a motive for efficiency built into their demand going to control cost. So they’re not going to control cost. So that hasn’t been identified, it won’t put the money in a trust and they know that, that is the big bugaboo.

JB: Well, the Medicaid issue

Coburn: Well, the Medicaid issue hasn’t been scored. The cost for play-or-pay mandate, what that will do in terms of jobs, what that does, see that hasn’t been scored — how that will decrease revenue for the federal government. 72% of all our jobs come from the small businesses. Sixty percent of them don’t cover insurance, so 60% of 72% of the jobs have a new cost, which means we’re going to fire people because we won’t be able to afford that.  [Ed. Note: The “play or pay” mandate establishes a price to be paid by individuals who don’t have health insurance and for companies that don’t provide it to their employees.]

JB: And we’ve got a new federal bureaucracy which is, I guess is going to get in between the doctor and the patient.

Coburn: They claim that’s not.

JB: How is it not, as you understand it?

: Because they envision insurance… let me make this point first. The incentive behind creating government insurance is that the overhead of the private industry is too high. The other assumption is…that the federal government can regulate insurance better than the state. Now, any insurance which is regulated anywhere in this country is regulated by a very efficient state regulatory agency, which I think do a pretty good job. The states do. And we’ve said, no, you don’t do a good enough job. We’ve got to have one up here.

The second point behind that is, what is their motivation for doing that? Well, Medicare and Medicaid only cost 6% to administer, their cost of capital is 3%. Their fraud and abuse waste is 20%, so you add 20% plus  6% plus 3% and you get 29%. Compare that to the overhead plus profit of every insurance company out there, and it is under 21%. So they beat the federal government already in the two programs they already largely administer by a third.

JB: Well forgive me, I’m an old Defense Department guy myself, and the thought of having, or even the thought that the government can be more efficient in administering anything than the private sector just seems insane.

: It can’t, and neither can a co-op.

: So we are in a position here where they are saying this is not going to get between the patient and the physician.

: Well, they are also saying it is not going to cause anyone to lose the insurance that they have. [The Congressional Budget Office] just said 16 million people are going to lose their insurance under this bill.

JB: Well, it is probably more than that, isn’t it? Because we have not seen the other portions of this, and when they start monkeying with Medicare that’s all…

Coburn: Well, look, what’s going to happen is small businesses are going to say, OK, I’ll pay the two thousand dollars a year, I no longer have any health insurance costs. And I will also reduce my staff by 10%.

JB: So we are going to end up with employers having a huge disincentive to provide health insurance. And then we are also going to have a situation where employers who still do, now the president is saying, as I understand it, that he is going to tax employer provided healthcare.

Coburn: Well, he, he hasn’t said that yet. He had campaigned against that. And to be honest, our bill does that, but we give it all back to you in terms of a credit that applies to your health care. And we have all these examples up to $185,000 [in income levels] that is essentially a tax cut for you. Up to $185,000 everybody will get a tax cut.

JB: Describe to me, please, the differences, and again I keep focusing on the patient doctor relationship. And what is the difference between the Republican bill and what little we have seen so far from the Kennedy Obama package?  

Coburn: Our bill, you get to make all choices. All choices.

JB: You choose your doctor.

Coburn: You choose your doctor, you choose your hospital, you choose the procedure you want, you don’t have the federal government at any level. But we do tie an economic string to that.

JB: How do you do that?

: We do that because you are now paying for your insurance. We do that with Medicaid too. We allow every Medicaid family to take the stamp of Medicaid off their forehead. A doctor will never know weather they are Medicaid or not, because they now have an insurance card, and a fund with which to pay their co-pays. So we are really helping the people that need to be helped. And the scoring on ours says 26 million who are uninsured now will be insured in 10 years. That is 10 million more than the health — and we don’t raise the first tax, there is no net tax increase, there is no new net revenue change under our bill. So we deny we need more money in health care. We can do it all without raising the first tax.

JB: In terms of the Republican alternative you have, I think I am hearing from you that the level of care, the kinds of care the advances in care are not changed, there is nothing like rationing, nothing like …

Coburn: You, you get to make the choice. How do we get savings, how do we control the costs, that is the key thing.

Number one is we create transparent market in terms of quality, and we create a transparent market in terms of price. You can actually know what something is going to cost. So you get to pick quality, you get to pick price.

Number two, and this is where the Kennedy bill fails, let’s say we are going to have government-run healthcare. Let’s say we are going to put everybody in the same plan. The problem is — and we are not going to put any limits on it — the problem is how do you control the 7.2% cost increase? The only way you control it is through incentives prevention well-ness and care of chronic disease.

Now do you really think the bureaucrats up here, with white hair, at my age, can decide for me what the best medicine is for me? Or are there genetic factors with my past genetic health conditions and my past history that would say, my doctor with his gray hair or her gray hair and her training, would say no, you need to go here? Well the plan is for them, to tell all of us what drug to take, and to limit the art of medicine. The art of medicine is one of the things which has made it more costly here, and which has made it better here, and what they plan on doing is taking the art of medicine out. They say everyone fits into a peg, everyone is round, and they will fit into this hole, even when you are star-shaped or square-shaped. So we are going to spend all this time fitting squares into holes, and we are going to get bad outcomes.

JB: What are the two or three most important things that you think America ought to know about the Republican alternative?

Coburn: Absolutely get to choose it. Everybody gets covered. If you choose not to get covered, great, you can still choose not to get covered. You still have freedom. Number four is the states, they can form groups of states or individual states, they can choose and decide how they want to handle this, but we are going to put the money available to individuals, so they can have the freedom to choose and they can have the access. Nobody will lose their home, nobody will file bankruptcy under our bill.  

JB: In terms of this business, what you were just talking about, the cost the quality in terms of the crisis here? I keep hearing a lot of different things about thousands of families going bankrupt every year over healthcare costs, is that true to your knowledge?

Coburn: There are some, and any is too many. Because that means that we haven’t had the market resources out there, with their buying power to allow that to happen.

And we have some pretty stiff things in our bill that say we want a real market in health insurance. We don’t want you to make the most money by only insuring healthy people. We want to incent you to invest in people with chronic disease, so you will come up with innovative ways to incentive them to manage their chronic disease.

See, that is what we have been missing. People will say we have a market-oriented healthcare industry. We don’t. We have very limited market forces on it. But the most important thing is to allow choice in connecting, so that you make a good economic decision for you. And if we put the safeguards both at the bottom and the top so that nobody is going to lose their home, nobody is going to have to file bankruptcy.  And that even though you didn’t sign up and you are the 25 year old riding a Harley without the helmet and you go to the ER, we give the states the right to buy an umbrella policy on anybody who doesn’t sign up for a high deductible policy so that everybody else doesn’t have to share in the cost of things.

So we end up ultimately covering everybody by default who chooses not to be covered and were just going to take your tax credit, your $5,700 tax credit, and we are going to buy you a high deductible policy. If the states don’t want to do that, they don’t have to, but they would be stupid not to. The other great thing about our bill is Washington doesn’t know best. States really do now more about their constituencies than we do. Let’s use the states to find out the best way to… and what will happen in Oklahoma will copy California or Arizona after a couple of years because they are doing it better, and having it cost less. Rather than us saying here is what you must do.