Now that Donald Trump's inauguration has passed, all eyes are on getting his cabinet nominees confirmed.
Trump has named Dr. Mehmet Oz to run the Centers for Medicare and Medicaid Services (CMS), and the left is furious. Their latest line of attack is to trumpet that Dr. Oz once owned stock in some of the nation’s most successful businesses.
Well, we can’t have that!
According to his financial disclosure forms, Dr. Oz has invested in healthcare companies such as CVS Health. He’s also owned stock in tech-heavy hitters like Amazon and Microsoft.
That might sound like a typical portfolio—more than 60 percent of Americans own stock, with business success stories like Amazon always a tempting buy—but Democrats smell a rat. Oz’s critics say that because CVS provides health insurance plans under Medicare Advantage, which Oz would be overseeing at CMS, his owning their stock amounts to a conflict of interest. The same goes for Amazon and Microsoft, which contract with CMS to provide tech services.
Of all the criticisms leveled at Trump’s nominees, this might be the weakest. Start with the fact that Oz willingly disclosed these investments to the public. If there was some sinister conflict of interest, wouldn’t he have gone to greater lengths to cover it up?
What Oz’s critics are really doing is trying to chill the debate on health policy. Oz’s real crime wasn’t to own stock but to question the efficacy of government healthcare, which he did back in 2020 when he published an op-ed for Forbes advocating that every American receive health coverage through Medicare Advantage, paid for by an increased payroll tax.
It was an interesting idea and in line with what’s supposed to be the liberal dream of universal health coverage. It was also hardly radical: as Oz pointed out, “most countries in Western Europe today use payroll taxes to create protected separate streams of money that each country uses to efficiently buy health care—and most of those countries also use health plans that are similar to Medicare Advantage to actually provide the coverage for each person.”
But Democrats only want universal healthcare if it’s controlled lock, stock, and barrel by the federal government. And Medicare Advantage, while a government program, is one that harnesses the power of markets to the benefit of patients.
Medicare Advantage, also known as Medicare Part C, was established in 1997 as a program nested within America’s traditional system of employer-provided health insurance. It works like this: Medicare pays a private insurer a set amount of money for each participating patient, then the insurer covers the patient’s health expenses.
Research on Medicare Advantage is murky, but studies indicate there are at least some benefits to allowing market forces into the Medicare structure. According to research from KFF (Kaiser Family Foundation),“Medicare Advantage outperformed traditional Medicare on some measures, such as use of preventive services, having a usual source of care, and lower hospital readmission rates.”
Medicare Advantage is also flourishing, with 49 percent of Medicare beneficiaries using Medicare Advantage as of 2023, and more than half expected to use MA by the end of this year. What’s more, once patients enroll in Medicare Advantage, they almost never switch to traditional, government-run Medicare, according to research by the Commonwealth Fund, which found the annual rate for such a transfer is only 2 percent.
Clearly, word is out that government, left to its own devices, sends healthcare prices up and quality down. Yet the feds won’t stop meddling. To take another example, consider pharmacy benefit managers (PBMs), who are employed by privately owned pharmacies to negotiate down prescription prices with big drug companies. At the behest of Big Pharma, Congress is preparing to strangle PBMs in red tape, despite them saving the average patient more than $1,000 every year. Apparently, the “government knows best” crowd would rather take this job away from the private sector and have the government impose price controls instead, even though that is already a proven failed policy.
Or consider the Obamacare exchanges, engineered by the Affordable Care Act as a way for the government to usher the uninsured onto health insurance plans. It sounds like a good idea but the exchanges are brimming with scammy plans limited to tiny networks of medical providers with eye-wateringly high deductibles. In fact, deductibles across the board have skyrocketed since regulation-happy Obamacare was signed into law in 2010.
The evidence is in: government meddling in the healthcare market doesn’t work. And market-based initiatives like Medicare Advantage work better than non-market-based ones.
All this before we even get to Medicaid, the other government-run giant that Oz will be overseeing. Medicaid has such poor outcomes that it’s sometimes been called a health insurance ghetto.
In Dr. Oz, Trump will have a top advisor who understands this, and who’s willing to entertain creative thinking to make patients’ lives better. As Americans erupt over the injustices of their health insurance system, the country desperately needs fresh thinking on healthcare with an eye for what actually works. If Dr. Oz can weather Democrats’ attacks, we just might get it.
Michael Busler is a public policy analyst and a professor of finance at Stockton University in Galloway, New Jersey.
