We have been deluged with information about the new health care "reform" bill. We now see that is will not, in fact, save money. We now know that it will not, in fact, achieve the goal of getting health care for everyone. It will not provide choices. It will not stimulate the economy. It will not provide decent care for the elderly (in fact, it will encourage them to end their lives "with dignity").
In fact, this "reform" bill seems far less like reform and appears more like a "progressive" wish-list, with a hodge-podge of lobbyist input.
Seeing that this bill is an utter failure from the start, I've come up with a list of simple reforms that will do far more to help expand medical coverage and improve care than the government intervention planned by Democrats in Congress and K-Street Lobbyists. Only one of these ideas is even remotely revolutionary or original in any way, but combined they are a powerful reform using real economics to deregulate the market and bring more choice and opportunity to consumers.
Before I begin, I must ask you to accept this fundamental premise: We cannot effectively provide health insurance for everybody. Some people simply don't want it. Others want it but will choose alternative products and services (as we see today with people who choose mobile phone service and cable television over insurance). The government cannot afford to provide it, there just isn't enough money to have that much tax and continue to grow economically.
Once we accept the premise that not everyone who can buy health insurance will, we can move forward. Until then, we are stuck in a quagmire of wishful thinking and foolish Utopian idealism.
- Allow individuals, businesses and groups to purchase health insurance accross state lines, as they now do with most other forms of insurance, credit cards and myriad other services. This will inject more competition into the market. It will also reduce the effect of state health care mandates that require insurance policies to cover such things as flu shots and chemical dependence care.
- Give individuals the same tax credit on insurance premiums now available to corporations. There is no reason why the government should be encouraging group coverage over individual coverage, nor should tax policy be harming self-employed entrepreneurs. So what if it costs the Treasury? Washington has proved a poor steward of our cash, anyway.
- Enact tort reform. Limit "punitive" damages and "pain and suffering" to $ 500,000 or 150% of the actual damages, whichever is more (after all, if there is negligence, the doctors should not benefit from poorly constructed tort reform). This should greatly reduce the cost of malpractice insurance, one of the critical overhead costs in our health system.
- Legally define the difference between "health insurance" and "health maintenance." Insurance is a financial instrument that protects against the unexpected, unlikely or catastrophic. Maintenance is a payment plan for expected services such as routine tests, immunizations, checkups and doctor visits. "Insurance" is much less expensive than "maintenance."
- Seek out and eliminate fraud in the Federal and State health programs. Many of these programs are rife with fraud. Some estimate the total fraudulent expenditures by government health care programs at 10 percent system-wide. Newt Gingrich estimates that that $32.7 billion in Medicare payments in 2007 were fraudulent.
- Permit individuals to develop tax-free health savings accounts (HSAs) to pay for the out-of-pocket expenses in a high-deductible insurance plan. Allow a six-month overlap period that permits individuals to use the previous year's HSA while they save up for the current year. At the end of the overlap, allow those individuals to keep their money.
- End the well-intentioned but foolish laws that require Emergency Rooms to treat all patients, regardless of the condition from which they are suffering. If the health care professionals determine that the case is not an emergency, those professionals should have the authority to turn those patients away without treatment. This will end the log-jam in our ERs and quickly reduce the number of people who come in for a case of the sniffles, then never pay their bill.
- Permit individuals who are not doctors to establish medical practices, hiring doctors to work them. No, not a hospital or a Doc-in-the-Box, but a family medical practice. One of the biggest problems among General Practitioners is that they have spent years studying medicine, not business. Because of this, they frequently make decisions that are completely unrelated to medicine that increase the overhead costs. Some do a much better job of making business decisions than others, but we all share the costs. Right now, between the States and Federal laws and regulations, it is virtually impossible (I have heard in fact, but never confirmed, patently illegal) for a non-medical individual to start such a practice. After all, your family doctor hires nurses and physician assistants; why shouldn't an entrepreneur be able to hire a family doctor?
These eight legislative steps use the power of fundamental economics to create more competitions and free the marketplace. They allow many more individuals to be covered, and could perhaps lower health insurance premiums far enough that many could afford private insurance who now depend on government health programs.
Now that's reform!