Richardson’s Universal Health Disaster: The Governor’s Big-Government Experiment Failed on the Launch Pad.


Bill Richardson slipped off of the national radar screen back in January when he abandoned his bid for president. While he eagerly awaits the outcome of the Clinton-Obama battle for the Democratic nomination — and perhaps a phone call inviting him to join a ticket in the vice-presidential slot or take a cabinet slot down the road — Richardson has been stuck in Santa Fe, New Mexico, in the mundane (at least for him) role of governor.

Richardson will not have the chance to fulfill his presidential campaign promise of “universal health coverage.” But since abandoning his bid for the presidency he has used New Mexico as a testing ground for public acceptance of government-run health care. Let’s just say his experiment failed on the launch pad.

Richardson’s efforts to achieve government-mandated health-care coverage in New Mexico have foundered, at least to this point, on fiscal and economic reality. In fact, were health care not a life-and-death issue for so many, the entire episode might make for a great comedy.

It became apparent right from the start that Richardson’s people had not done their homework. The consulting firm Mathematica Policy Research was hired to study the state’s health-care proposal. (It had previously done such work for Maine’s Dirigo program, drastically underestimating the costs.) The problem was, Mathematica’s numbers proved to be phony.

Before the state’s legislative session even got under way, Mathematica’s estimated price tag for Richardson’s proposal over a five-year period was magically reduced from $333 million to about $72 million. The firm blamed a computer error for the original, inflated estimate. But given the track record of such approximations, it is likely that even the $333 million figure is an underestimate of the true cost of the governor’s proposal.

And what did that proposal include? First and foremost, it targeted doctors for significant cost savings by forcing anyone practicing medicine in New Mexico to prescribe whatever care the state or health-insurance companies deemed adequate. While such a move may appear logical to those who believe government is the font of all wisdom, the reality is that doctors — already scarce in the state’s rural areas — would flee New Mexico in droves if they became the target of ever-increasing demands for cost-savings.

Despite the potential adoption of these draconian policies, New Mexico’s doctors’ association put up only tepid opposition to the governor’s proposal. Yet, in the middle of the legislative session, as Richardson saw his plan altered beyond recognition, the governor lashed out — calling New Mexico’s doctors “greedy” for not being more supportive of his agenda.

In addition to placing an overwhelming burden on doctors, Richardson’s plan targeted small businesses. Under his plan, employers would have been responsible for tracking employee health coverage and paying into a state-sponsored fund if they failed to offer coverage deemed “adequate” by the state. The New Mexico Restaurant Association, which actively opposed Richardson’s bill, estimated that providing health insurance for its industry’s employees would cost restaurants around the state an additional $55 million.

Ultimately, Richardson could not get his plan through either house of the Democrat-dominated New Mexico legislature, at least during the regular session. As the legislative session ended, Richardson again lashed out, saying the session was the “worst in his term as governor” and accusing legislators of “lacking the political will to address health care.”

Richardson’s defeat was due in part to genuine policy disagreements. But another factor that cannot be understated is the widespread perception of Richardson as a “lame duck.” The assumption is that he is simply biding his time in New Mexico until Clinton or Obama tap him for a job in Washington.

In the meantime, Richardson has said that he’ll call the legislature in for a special session in a last-ditch effort to ram his health-care plan through. Ironically, while Richardson’s campaign for the White House was based in large part on his credentials as a diplomat, he exhibited anything but diplomatic skill in his attempts at health-care reform in New Mexico.

— Paul Gessing is president of the Rio Grande Foundation.