America has probably the best health care in the world. The problem is not the health care, but the fact that it costs way more than it needs to. With the proper reforms we could have even better care for a lot less money. The free market offers truly constructive approaches to these health cost problems.
Instead of looking at the bad ideas before our legislators, let’s take a look at some really good ideas.
There are four main things that are driving the cost of health care much higher than it needs to be while making it less effective than it otherwise would be.
The biggest problem is that about half or more of the health care costs are paid for by third parties or so indirectly that market forces can’t operate effectively. The next problem is legal liability that drive costs up. Restrictions on and misuse of health insurance drive costs up and the last problem to discuss is the actions of the government FDA, which drive the cost of medicine and treatments up at least 10 to 1 and make it impossible to develop treatments or some medical problems.
If we could reduce these problems, the cost would come down and the quality of treatments would go up. Each problem can be treated separately and things would improve as each problem were solved or reduced in severity. Finally and best of all the cost of solving these problems should be very small.
First, we must get the bulk of the population paying their bills directly with money they consider to be their own. This involves leveling the playing field so that money spent for individuals for their health care is treated the same tax-wise as money spent through companies to cover medical payments.
One of the best ways to do this is the health savings accounts which combine high deductible insurance with a savings account that can be used to pay ordinary health expenses. The high deductible insurance is to cover large catastrophic costs. Any money not spent can stay in the savings account stays in the possession of the owner of the account. There is no use it or lose it with the health savings account. See “Buddy Davenport’s State Farm Understands the Value of Free Market Health Savings” (nsbnews.net 05/30/09).
The health savings account would alter the behavior of the user because once he sees that he is using his own money he will decide differently when he needs a doctor and which doctor he needs. There will become emphasis on economy which is pretty much missing when people think a third party is paying their bills.
Years ago, Florida Gov. Jeb Bush formed a “blue ribbon” committee to study the problem of medical legal liability reform under University of Central Florida president (first name???) Hitt.
Dr Hitt told me in a private conversation that the one point the whole committee could agree on was that there needed to be limits on non-economic damages such as pain, suffering and punitive damages.
Another reform that is needed in the legal system is to make the loser pay all of the costs for both sides in the dispute. This provision which is used almost everywhere in the world except in the U.S. would discourage, frivolous nuisance suits.
The legal system also needs to be purged of the “deep pockets” doctrine in which anyone with enough money can be made liable for all of the damages no matter how little blame he has in the matter being litigated.
All three of these reforms would help everybody in the country except the trial lawyers and their ilk. See “Legal Liability Lightens Our Wallets” (nsbnews.net 09/06/08).
We need to change the way we use medical insurance to pay our medical bills. First, insurance should be used to pay large unexpected bills not small anticipated bills.
We should remove regulations from insurance that prohibit companies from out of state from participating in a state’s insurance market. We also should remove regulations that force companies to include things in policies that many people don’t want or need. Such unwanted coverage has included such things as cosmetic surgery, psychiatric treatments obstetrics for single males or women past child bearing age. If insurance companies were allowed to furnish what their clients needed and allowed to compete across state lines, the cost of medical insurance coverage would come down.
The Federal Drug Administration, FDA, is a terrible burden on the development of new drugs and medical treatments. Various authors have stated that the FDA contributes anywhere from 85% to 95% of the cost of drug development with their extensive and largely useless rules and regulations on drug and medical treatments. This interference in the drug development not only adds greatly to the cost of drugs and medical treatments but also delays their development greatly and prevents the development of treatments for diseases which don’t effect enough of t he population.
Any additional protection the public may get from the FDA is hardly worth the price that Americans have to pay for it. See “FDA Ineptness Hurting People Everywhere”, nsbnews.net 05/01/08. Imagine what would happen if the burden of the FDA were removed and the cost of American drugs were reduced by 90% or more.
Note that the above mentioned reforms would reduce medical costs considerably while not reducing the amount of care Americans would receive and without infringing on our rights and giving more control to the Government and certainly without introducing huge new costs to the taxpayer.
Each of the above reforms stands alone in the sense that enacting any one of them totally or in part would help the situation independent of whether any or all of the others were enacted.
The only drawbacks to the above reforms are that they don’t put any additional power into the hands of politicians and government bureaucrats and they would reduce the income of ambulance chasing lawyers.