In preparation for today’s White House health care summit, many scholars and organizations have been putting forward their own ideas about how to reform our health care system.
In this Wall Street Journal oped, renowned economists John Cogan, Glenn Hubbard, and Daniel Kessler boil down the debate about how to approach health care reform, and urge policymakers to focus on controlling health care costs. They write:
The fundamental question [summit] participants must address is whether to use the president’s plan as a starting point for negotiations, or to scrap it and start over.
Our recommendation: scrap it and start over. Its key elements-mandates, heavy-handed insurance regulation, and entitlement-based, middle-income subsidies-must go. None of them address health care’s fundamental problem: high and rising costs. Instead, the various versions of health reform put forth by the president and his party are based on expanding health-insurance coverage. The inevitable consequence will be to exacerbate the cost problem. And the American public knows it.
To bring down costs, we need to change the incentives that govern spending. Right now, $5 out of every $6 of health-care spending is paid for by someone other than the person receiving care-insurance companies, employers, or the government. Individuals are insulated from the reality of what their decisions cost. This breeds overutilization of low-value health care and runaway spending.
To reduce the growth of costs, individuals must take greater responsibility for their health care, and health insurers and health-care providers must face the competitive forces of the market. Three policy changes will go a long way to achieving these objectives: (1) eliminate the tax code’s bias that favors health insurance over out-of-pocket spending; (2) remove state-government barriers to purchasing and providing health services; and (3) reform medical malpractice laws.
It’s clear that the White House and Congressional leaders really aren’t open to new ideas about how to approach health care reform. But let’s hope the American people read this persuasive piece and recognize how much better our health care system could be if this reform effort fails and a new one begins.