Article 125. How to Have Effective Health Care Reform
How to Have Effective Health Care Reform
By John Huntinghouse
The steps needed in order to have effective health care reform using a free market approached to the topic.
Step 1
Realize that our current system is not a free market system. We need to start off this discussion by making the point that our current system has many public policies that prevent markets from working. Such policies can be found in ill conceived federal tax policies, insurance regulation, and barriers to entry specifically have shielded the consumers from costs and greatly inhibited competition.
Step 2
Increasing the choices we as individuals have for our own health care. Many people state that our current system gives us choice and the freedom to pick our providers but if you closely look at it, this is not the case. Look at who you get your medical insurance through. Did you pick your insurer and medical plans? If you are employed by a company, there’s a good chance that you only had one choice of medical insurance provider and that provider may have had at max, 3-4 options on medical insurance. This lack of competition between individual consumers stifles true competition that in a natural market would bring health cost down.
Step 3
Increase co-payments and deductibles. Some will say “why would you want to increase deductibles and co-payments?” The reason why you would do this is to give consumers more “skin in the game,” by making them aware of the cost of health care and the differences between insurers and health providers. Right now because of a low deductible you would go into any physician’s office and let them run as many tests as the doctor seems fit to do. You have no idea of the cost of the each test let a lone the cost between physicians because you pay the same co-payment regardless of where you go. Plus with such low deductibles you could care less how much extra it cost for certain tests or the difference in price between physicians because the insurance will pick up regardless. This costs the insurer more money and thus it will ultimately increase the monthly premiums and further raise the deductible anyways in the long run. Based on the RAND Corporation’s National Health Insurance Experiment, “if the average annual health-plan deductible were to rise from its current level of $250 to even $500 and the typical coinsurance rate were to rise from 20% to 25%, we estimate that annual health-care spending would decline by $65 billion per year.
Step 4
Remove individual state restrictions. Even with the tax field leveled the consumers would run into the problem with the insurance markets within specific states. Obviously each state is different with their differing regulations and mandates but there are approximately 1,500 specific insurance coverage requirement that are imposed by the various state legislatures. Some of these requirements and mandates are beneficial but not to all. Such is the case with chiropractic care and alternative medicine. These are options that should be chosen by the individual consumer and because it is not, the cost must be covered by all who are part of the plan.
Insurance providers need to be allowed to go nationwide and not be so encumbered by every individual state regulations and mandates. By allowing insurance companies to go nation wide, one of the benefits is that the insurance you have would become portable. You would be able to leave one job in one state to go to another job in another state and yet still keep your insurance coverage. By removing many of the state mandates and any-willing-provider laws, the average cost savings would be around 7 – 17%. That would be around $600-$1500 a year for the average family that they could be saving each year.
Step 5
Lower the barrier of entry. To avoid what has happened to the law industry, the medical industry and government have restricted the supply of health professionals who enter medical school or other types of higher education learning for the industry. Thousands of candidates perfectly qualified to enter medical school are not allowed in due to the fact that there are these strict regulations in place to prevent the over saturation of health professionals in the field. This is another example of basic supply and demand principle that affects many of us to timely health care. Many of the family practice physicians are no longer taking new patients because they are completely booked. Those advocates will tout the fact that they are doing quality and cost control. However, this effectively results in market participants (the doctors and hospital in charge of medical schools and residency programs) acting in cooperation with each other to restrict competition, which is a violation of antitrust laws. The Supreme Court has previously ruled that ensuring quality is no defense against such practices. To fix this problem, no new legislation would need to be passed, the government would only need to enforce the laws are that are already on the books. There needs to be a better balance between the strictness of the standards of medical school (not quality of physicians) and the benefits of greater competition. On top of this, there are many states that have laws that restrict nurse practitioners and other qualified health providers from providing needed care that they are perfectly qualified to do. The massive shortage of health providers in rural and underrepresented areas could be filled with such personnel.
Comments by Lawrence Rosier
The author seams to indicate that public heath care insurance should be organized more like car insurance. The selection of a car insurance provider is entirely by customer choice and is valid in any state in the union. Assuming this is the case then employers should supply a block grant of money for health care insurance for each employee allowing them to find the health care provider that best fits their needs.
The primary reason for health care insurance should be for catastrophic injury and illness and not to cover all health care costs. This allows the insured to be protected from unforeseen massive health care expenditures while having affordable insurance rates.
The author indicates that a range of copayments be charged for different medical services and tests and that the copayments should be significant enough to make the policy holder think about the cost of the service and its value to him.
The author also suggests that the number of graduating doctors is artificially held to a predetermined number and should be allowed to expand to allow all graduates that are qualified to become doctors.
This article assumes that private insurance is the answer to our health care problems An alternative is the government run health care programs found in Europe which we dismiss as socialism. We have the highest health care costs among the leading nations of the world. England, France and Italy all have complete health care for all of its citizens. They are taxed pretty heavily for this and only a few have private health insurance (mostly the rich). We call this socialism because the government provides the entire health system the hospitals and health insurance and not private companies. These European systems require virtually no paperwork since all citizens are eligible. Contrast that with the mountain of paperwork we do in the US just to determine if we are eligible. The primary benefit besides to the citizens is that companies and small businesses don’t have to provide health care insurance. Many Europeans before visiting the US ask themselves the question “What do I do if I get sick?” That’s the same question many of us in US are asking.
The answer is to reform government and make it operate like a private business. If this is done properly no private business can compete. See
Article 128. Using Private Industry techniques to Privatize (Reform) State Government.
Source eHow.com and John Huntnghouse’s website: http://www.huntinghouseblog.com
