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Why Single-Payer Health Care Can't Work

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Some say this system would lead to rationing. They're right.

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The visceral reaction to the Town Hall meetings on health-care reform leads me to believe that a lot of Americans feel that any single-payer system will inevitably lead to health-care rationing. And I couldn't agree more.

Way back in the early 1980s, I started out as a pharmaceutical/biotech analyst. Back then, I was frequently asked to talk at small meetings of clients at local offices of the regional brokerage firm that I worked for.

These clients were mostly small-business owners and a big issue was dealing with health-care expenses for their employees. I'd start out the talk with a quote from the retiring first Minister of the UK National Health System. (I've tried googling him and the exact quote, but it doesn't come up.) The quote is simple, direct, and as pertinent today as it was back in the 1950s and was very simple: "The demand for free health care is infinite." They all got it.

The people protesting now all get it. They all understand that free health care will lead to rationing. Rationing isn't starving to death, it's "You need a hip replacement -- no problem. But the waiting list is 3 years. In the mean time, limp." Check out the waiting lists in Canada and the UK, if you don't believe me. If you want understand real rationing, in the UK, kidney dialysis isn't offered to people above a certain age.

There are simply not enough doctors in the US to allow everyone to have a personal physician. In reality, we do have health care for everyone, but it's for acute health problems, not chronic problems. If you fall and break your wrist and you go to an emergency room, you get treated whether or not you have insurance. The chronic problems -- diabetes, high cholesterol, high blood pressure, and so forth -- occupy much of the time a family physician spends with patients. Most of these conditions have had significant advances in treatment through prescription drugs, so let's review some of the breakthroughs from the past 30 years.

The first breakthrough was Tagamet, the first antacid that actually reduced the production of stomach acid. Smith, Kline & French -- now GlaxoSmithKline (GSK) -- won FDA approval in 1979, and the number of people who had to have surgery for stomach ulcers rapidly declined. I believe stomach ulcer surgery was in the top-10 most frequently performed surgeries back the 1970s. You rarely ever hear of one now.

The next breakthrough was in high blood pressure. Two new classes of drugs emerged -- ACE inhibitors and calcium channel blockers. Controlling high blood pressure became much easier with minimal side effects.

The final major breakthrough was statins -- other than antibiotics, the greatest life-prolonging drug class ever developed. Study after study show huge reductions in heart attacks and strokes from the use of statins -- Pfizer's (PFE) Lipitor, Merck's (MRK) Zocor and many others.

So, where does that leave us in 2009? All the breakthrough ulcers drugs are over-the-counter. All previously doctor-prescribed, now they can be purchased at your local drug store. The over-the-counter versions were approved at one-half the dosage of the prescription version. Private insurance won't even pay for these ulcer drugs now.
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