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Public Statements

Coburn Calls for Privatizing Health Care

Press Release

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Location: Tulsa, OK

With health care spending comprising 16 percent of the nation's gross domestic product, U.S. Sen. Tom Coburn believes it's time to privatize America's health care system.

"The answer is not the government," the Republican physician told an Oklahoma State University Center for Health Services audience Tuesday. "The answer is competition."

With health insurance premiums doubled over the last seven years, even some of the most hardened opponents have warmed to the concept of health care reform. As Coburn said, what has mushroomed into a $2.2 trillion sector threatens to overwhelm the nation's economic capacity to deal with its long-term challenges. With Medicare and Medicaid alone accounting for 4 percent of the GDP, he predicted continued rampant inflation could lift those programs to 20 percent of the nation's output by the year 2050 if Americans do not act now.

But in pointing to those same expenditure figures, Coburn insisted money isn't the issue. "We already have plenty of money in health care," he said, adding that almost a tenth of today's spending goes toward waste, fraud or duplicative services, while a quarter reflects overhead. "We're just not spending it right."

The Oklahoma junior senator's reform plan, called the Universal Health Care Choice and Access Act (S. 1019), would turn the focus on allocation and access. Through tax code changes, Coburn proposed creating a system that would subsidize each American's individual insurance choice, doing away not just with the 6.5 million uninsured in America, but with Medicare and Medicaid.

By redirecting the payment system and putting faith in the consumer, with incentives that not only reward healthy lifestyles but contain costs by treating diseases at earlier stages, Coburn said his plan could create a competitive marketplace to naturally restructure both the provider system and the national insurance system.

It would improve access by doing away with payment hurdles.It also would create economic incentive to lead more people into the health care field, countering looming physician and nursing shortages. The senator admitted the legislation, which also proposes creation of specialized health courts, would initially create a new tax base and increased costs, although he said these would soon spur competition that would reduce spending.

He also acknowledged the shifting market could require decades to readjust - which drew some concern from the audience.

"As a society we have become large health care consumers," said Glen W. Mulready, legislative chair for the Oklahoma State Association of Health Underwriters and an executive with Fred Daniel & Sons Insurance of Tulsa. "We defend the latest and the greatest, and that always comes at a price."

Damon Baker, chairman of OSU's department of internal medicine and chief medical officer at the OSU Health Center in Tulsa, called Coburn's ideals "very bold and innovative."

But like Mulready, he questioned the specifics of how it would get off the ground - and he expressed concern over the cost of jump-starting many of the technical systems Coburn touted, such as issuing smart cards to keep track of patient histories.

"You have to find some way to make that affordable for the community hospitals," he said. "We don't have that capacity in Tulsa now."

Pointing to BlackBerrys and plasma televisions, Coburn noted that private industry often proves far more effective than governmental bodies at not only adopting new technologies, but making it affordable. Baker said he'd seen examples of such improved quality in Native American health care systems supported by tribal dollars.

"The Catholic health system is very interested in universal health care," said Richard Boone, corporate vice president with Tulsa's St. John Health System, which writes off about 54 percent of its charges each year.

After listening to Coburn's presentation, he expressed interest in hearing more. "I think it would have a positive impact," he said, although he had concerns Coburn could get it passed.

Since it would restructure tax code, Coburn's legislation awaits action in the Committee on Finance. Although it has 13 co-sponsors, Coburn admitted it could end up folded and diluted into another act.

But he said the real danger to passage came from protective interests and trial lawyers.

"We have a system we have to change, and you can't win it in Washington because the Senate is made up of 70 percent, maybe 72 percent, of lawyers," he said.


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