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Lessons from Canada about Price Controls and Global Budgets (summary)

October 1, 1993

This paper, written by Pacific Research Institute president and chief executive officer Sally Pipes, examines President Bill Clinton’s 1993 proposal for reforming health care in the U.S., as drafted by the Task Force on National Health Care Reform.

stethoscope and insurance docs

This paper, written by Pacific Research Institute president and chief executive officer Sally Pipes, examines President Bill Clinton’s 1993 proposal for reforming health care in the U.S., as drafted by the Task Force on National Health Care Reform, chaired by First Lady Hillary Clinton.

The Task Force’s math does not add up, Pipes writes.

“Amid the euphoria sweeping the Beltway over the Clintons’ health care proposal, analysts and economists are concerned that the Clintons’ numbers simply do not add up,” Pipes writes. “Mr. Donald Goldsmith, in The Wall Street Journal, pointed out that Clinton’s very first calculation was off by a factor of 10! Clinton claimed that with simplified paperwork each doctor on that one [children’s] hospital staff, 200 of them, could see another 500 children a year. That is 10,000 children per year. Two hundred multiplied by 500 equals 100,000, not 10,000. It was a gaffe reminiscent of the much ballyhooed Quayle ‘potatoe’ [sic] spelling.

“Although the more serious calculations had supposedly been thoroughly checked by independent sources, the fact that no one in the media or in the opposition party caught this obvious mistake causes one to take pause and ponder: Does anyone really know what’s in the Clintonian alchemy of numbers?”

The Task Force’s plan proposes to expand health insurance coverage to many Americans, but does not include proposals on how such expenditures would be funded, Pipes writes.

“The Clintons’ plan promises to expand comprehensive health care coverage to the 37 million Americans currently uninsured,” Pipes writes. “Although expanding coverage will require $33 1 billion in new spending, the architects of the plan claim it will actually contribute $58 billion of savings to the federal Treasury, as $189 billion is liposuctioned out of Medicare and Medicaid; $40 billion is saved from other federal health programs; and corporations pay more taxes owing to the fact that they have less health care expenses to deduct. The only stated tax increases: a $65 billion hit on smokers and a 1 percent payroll tax for a corporation that elects not to join a government alliance.”

Author
Sally C. Pipes is president and chief executive officer of the Pacific Research Institute, a San Francisco-based think tank founded in 1979.
spipes@pacificresearch.org