It is sometimes said that opponents of health care nationalization, such as myself, want to preserve the status quo. It is true that, like the majority of voters, I prefer the status quo to the “reform” being contemplated in Congress. The paramount thing is to scuttle the Democratic effort to nationalize health via a “public option” or “co-ops”.
But the status quo isn’t good either. So here are seven things I think we should do to reform health care:
Allow insurers to compete across state lines. Currently health insurers are not permitted to compete in other states, which gives us 50 largely uncompetitive markets instead of one competitive market. As Charles Lipson explains, lifting those restrictions would create competition in health care, improving quality and lowering cost.
Remove the tax penalty for individually-purchased health care. The discrepancy in the tax treatment of individually-purchased and employment-based health care makes individual health care much less affordable.
One direct way to do this is the way advocated by John McCain during the 2008 election campaign, to make employment-based health care taxable, and compensate for that with a tax credit. This is politically impossible, since the Obama campaign demagogued that strategy, portraying it dishonestly as a tax increase. Fortunately, the problem can be resolved on the other end as well, by making health insurance premiums tax deductible.
Voluntary tort reform. Institute “loser pays” and caps on punitive damages to reduce the cost of frivolous litigation.
In its usual form, tort reform is probably a political impossibility, since it would mean total war by the trial-lawyer lobby and its retainers in the Democratic party. However, it could be instituted in a way that would be difficult to oppose: Allow individuals to sign waivers that would institute tort reform on any cause of action they might bring, and (importantly) allow health care providers and insurers to take those waivers into account in their pricing structure. Persons willing to accept tort reform for themselves would see lower prices. Additionally, by looking at the price gap between waivered and non-waivered customers, we could easily quantify the cost of litigation to our health care system.
Universal Health Savings Accounts. Make HSAs available to everyone. Also, allow the payment of health insurance premiums from an HSA, thereby incorporating point 2.
Allow the use of unapproved drugs with informed consent. It is a cruel irony that people die waiting for drugs that could have saved them to be proven safe. People should be allowed to take unapproved drugs after being made aware of the risks.
Improved information and education. Collect information on the performance of health care providers and insurers and make it available and searchable on the internet. Also, institute a series of public service announcements encouraging high-deductible plans and otherwise discouraging moral hazard.
Cut taxes and the budget. Putting more money into the individual’s pocket will make health care more affordable. Let people decide for themselves how to spend their money.
The beauty of this agenda is every one of these items would increase our liberty, not the power of the state.
UPDATE: I originally had an eighth item (listed as #3), which called for making it possible for those who leave employment to continue to purchase the same health care for one year. As a commenter points out, that’s already covered by COBRA for all but the smallest employers. For some reason, I erroneously thought that COBRA applied only to lay-offs. Since that item is already law (COBRA actually gives 18 months), I’ve deleted it from the agenda.