Health Care Reform: Another Way Is Possible

by Pejman Yousefzadeh on July 6, 2009

Michael Tanner–doing the Lord’s work, as he often does–points the way towards a free market alternative to the current health care system and the Obama Administration’s proposed reforms:

There are two key components to any free-market healthcare reform. First, we need to move away from a system dominated by employer-provided health insurance and instead make health insurance personal and portable, controlled by the individual rather than government or an employer.

Employment-based insurance hides much of the true cost of healthcare to consumers, thereby encouraging overconsumption. It also limits consumer choice, because employers get the final say in what type of insurance a worker will receive. It means that people who don’t receive insurance through work are put at a significant and costly disadvantage. And, of course, it means that if you lose your job, you are likely to end up uninsured.

Changing from employer-provided to individually purchased insurance requires changing the tax treatment of health insurance. The current system excludes the value of employer-provided insurance from a worker’s taxable income. However, a worker purchasing health insurance on his own must do so with after-tax dollars. This provides a significant financial reward for those who have employer-provided insurance. That should be reversed.

[. . .]

The other part of effective healthcare reform involves increasing competition among both insurers and health providers. Current regulations establish monopolies and cartels in both industries. Today, for example, people can’t purchase health insurance across state lines. And because different states have very different regulations and mandates, costs can vary widely depending on where you live.

[. . .]

We also need to rethink medical licensing laws to encourage greater competition among providers. Nurse practitioners, physician assistants, midwives and other non-physician practitioners should have far greater ability to treat patients. We also should be encouraging such innovations in delivery as medical clinics in retail outlets.

Those are just the general principles. Tanner provides details galore, and they can be found if you click the link. Much has been made of the Obama Administration’s supposed desire for a new ethic of bipartisanship. The Administration can prove that it is serious about bipartisanship if it decides to give the free market alternative to its health care reform policies a fair shake.

Dollars to doughnuts says that they won’t do it, which would be a pity for policymaking, and which would reveal the Administration’s supposed desire for bipartisanship to be a fraud. But I am willing to be surprised.

  • ProfElwood

    Excellent ideas, which I'm also assuming will be ignored.

    May I suggest a couple of others that are mysteriously absent from the discussion:
    Allowing medicare part D to negotiate drug prices.
    Revising the RBRVS to pay family doctors and nurses more and specialists less to encourage more family doctors.
    Allowing hospitals to refuse or refer patients who show up in the emergency room with non-emergency problems.

    All of these could also be done for free.

  • ProfElwood

    Excellent ideas, which I'm also assuming will be ignored.

    May I suggest a couple of others that are mysteriously absent from the discussion:
    Allowing medicare part D to negotiate drug prices.
    Revising the RBRVS to pay family doctors and nurses more and specialists less to encourage more family doctors.
    Allowing hospitals to refuse or refer patients who show up in the emergency room with non-emergency problems.

    All of these could also be done for free.

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