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There is Still Time to Stop the Dark Side

In my forthcoming book, Remaking America: Welcome to the Dark Side of the Welfare State, I describe how the welfare state reaches a breaking point where government will run away from its promises to citizens and taxpayers – without cutting taxes to compensate. This one-sided roll-back of government leaves people poorer and contributes to a depression of economic activity in the private sector. America is not quite at this breaking point yet, but we can already see a precipitous preview of what is to come on a large scale. Around the country, governments are bailing out of the hospital business in part due to poor reimbursements from tax-paid Medicare and Medicaid. The Wall Street Journal reports:

Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort. Officials in Lauderdale County, Ala., this spring opted to transfer their 91-year-old Eliza Coffee Memorial Hospital and other properties to a for-profit company after struggling to satisfy an angry bond insurer. “We were next to knocking on bankruptcy’s door,” said Rhea Fulmer, a Lauderdale County commissioner who approved the deal with RegionalCare Hospital Partners, of Brentwood, Tenn, but with trepidation. She said the county had no guarantee the company would improve care in the decades to come. “Time will tell.” Clinton County, Ohio, in May sold its hospital to the same company. Officials in Kenai Peninsula Borough, Alaska, are weighing a joint venture with a for-profit company, similar to one the same company made with Bannock County, Idaho. And Prince George’s County, Md., is seeking a buyer for its medical complex. More than a fifth of the nation’s 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times.

The ramifications of government-paid health insurance go beyond the government’s own hospitals. A story in the Denver Post recently revealed that some private hospitals take one step further and refuse flat-out to take more patients with tax-paid health insurance:

Two clinics at University of Colorado Hospital — considered the state’s safety net for the needy — are turning away patients on government insurance plans because they can’t afford to treat them.The recent changes at University’s urology clinic, which stopped taking new Medicaid patients this month, and the internal-medicine clinic, which is no longer accepting patients with Medicare, have left community health centers that care for the state’s poorest residents at a loss. The pool of specialists who will accept patients on low-paying government insurance plans is shrinking, they say. University Hospital, which spent almost $270 million in the last fiscal year treating people without insurance, is under no official obligation to treat patients on federal assistance for the poor or elderly. A 1990 Colorado statute says that for every $3 the state gives the hospital from its general fund, the hospital will provide $4 in care for needy patients. But the state has not given University Hospital money from its general fund for at least the past three years, said Dr. Greg Stiegmann, the hospital’s vice president for clinical affairs. “We have essentially no obligation since the state has not lived up to its commitment,” he said. “It comes down to economics. We’re doing the best we can. But we simply are at our limit.”

There is still time to stop America from turning to the Dark Side of the Welfare State. Immediate, systemic entitlement reforms combined with well-designed tax cuts will give citizens back the responsibility and freedom to run their own lives.

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Monday, 25 September 2017
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