Share This Page

CMU professor: Obamacare not right prescription

Medical care in the United States is so good -- and so frustrating. It costs far more than any other health system in the world -- a sixth of the economy -- with results not nearly in keeping.

Allan H. Meltzer suggests some reasons. Almost half of Americans' health spending is in the last six months of life, where investments in youth would pay off better. Old and sick, we are kept going pathetically with facilities, methods and technology that are anything but low-priced. Anything but life-enhancing, too, in many cases.

We reward medical specialists far out of proportion to general practitioners who so often make more difference, and earlier. Thank government price controls for this: the reimbursements of Medicare and Medicaid.

Result: health care reform is badly needed. But Obamacare "doesn't solve the basic problem," says the oft-quoted Meltzer.

The longtime professor of political economy at Carnegie Mellon University and historian of the Federal Reserve has issued a new book for everyday readers, "Why Capitalism?" (Oxford University Press, 154 pages, $21.95.)

He wrote it, he says, because people have taken to predicting the "end" or the "death" of capitalism, because it falls short of perfection. Its virtue is unique, though: the only system "consistent with the freedom of individuals to develop their ideas," Meltzer told a meeting of alumni of CMU's Tepper School of Business.

Inequality of incomes is often held up as its worst sin. Only high taxes can extract a "fair share" out of the greedy rich. But, in fact, says Meltzer, super-earners tend to be people of "unusual skills" -- rock stars, athletes, heads of corporations that operate in 100 countries.

Plus, the recipients of capital gains from investments. Tax too much away and such folks get out the travel folders. "Where it's costly to live," said Meltzer, "they leave."

Real health care reform, he said, would provide insurance choices like those already enjoyed by government workers -- and CMU employees. Subsidize the poor, yes, yet they should pay something.

But Obamacare's "mandate" to force coverage is no way to go (and likely unconstitutional). Co-payments could be designed for elderly patients and their families to "make a judgment" whether life-extending measures are worth it in all cases. As to government "death panels" -- no way.

With 30 million more patients to insure -- and a shortage of family docs as it is -- Meltzer asked an eminent Pittsburgh physician how the system can hope to provide even more primary care. Answer: "with trained nurses."

And what about capitalism's other recent failure: the bailouts of banks "too big to fail?"

Fix that, said the CMU prof, with a banking rule requiring a high capital ratio -- say 15 to 20 percent of assets -- not 6 percent. A bank's failure would fall on the risk-takers, not taxpayers. "Capitalism without failure," he said, "is like religion without sin."

On the other hand, "in the United States we're losing the rule of law and replacing it with the rule of regulation," he said. "The rule of law made us a great country. We don't want to lose that."

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.