Arnold Kling  

Real Health Care Reform

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Two relatively new books that I have not read. One is by Roger Feldman.


Should Medicare pay for patient expenses the way automobile insurers pay for car-repair bills?

...Medicare would pay each patient a fixed amount of money, reserving larger subsidies for sicker people. Patients, in turn, would select their own medical services from providers who would set their own competitive rates. A medical indemnity system would do away with the distortion in patients' incentives wrought by conventional Medicare coverage. Given a fixed amount of money to spend on medical care, patients would have strong incentives to shop for the combination of services, providers, and prices that most closely meet their needs.

The other is by Mark Pauly.

There is no magic that can preserve Medicare as we know it today...a voucher system could provide full coverage for the poor, ensure that all seniors have access to a minimum level of coverage, and empower consumers to make decisions about their health care. Converting Medicare to vouchers would create a neutral Medicare market, set realistic limits on the growth in spending, promote efficiency, and give seniors the freedom to choose the plan most suitable for them at the quality level they prefer.

The conventional wisdom is that the Democrats "own" the health care issue. Unfortunately, they are the party most committed to the existing system and most resistant to reform, particularly when it comes to Medicare. The Democrats are under the impression that all of the excess costs in the system are profits, and if we just get rid of those, we will be fine.

The meaningful reform proposals come from folks like Feldman or Pauly or Kling. We have no standing with Republicans (at least I don't), much less the Democrats who appear to be headed toward dominance over the next few years. I predict that we will have no meaningful health care reform in the foreseeable future.


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COMMENTS (3 to date)
Chuck writes:

I think you (and those who favor your policies) would make more progress for your cause if you focused your efforts not so much on steering the country away from adopting the health care status quo that works fairly well for the rest of the world, but instead focused on trying to have some sort of 'open space' for free market health care innovation that can co-exist with whatever reform takes place.

So, the idea is something like similar to the 'charter school' movement, only for the health-care free-market faithful rather than education.

Of course, you'll have to figure out how to structure it so that you don't have the (well known and understood) problems that will undermine any health care system... a bias for the healthy to take one system over the other, etc.

It's going to be hard to get the country to switch from what we have now to what everyone else has now, and it'll be even harder than that to get the country to switch from what we have now to something no one has tried before. (I don't mean to pose this as some kind of false choice, etc, but as complicated as the topic is, I'm really just trying to express a notion of what would attract me to your cause.)

Lord writes:

One reform I would make is let medicare cover any existing technology, but only cover any new technology once the introducer justifies its cost effectiveness to medicare. This would apply to any new diagnosis, new drug, new testing, or new treatment. If it is not at least as cost effective as existing technology it would not be covered, but if it could do something that could not currently be done it would be.

Dr. T writes:
I predict that we will have no meaningful health care reform in the foreseeable future.
I predict that if we get a combination of President Obama and a Democrat-majority Congress, then we soon will have disastrous health care change with more people becoming 'entitled' to more health care (which will become more inefficient than today).

Chuck (above) basically suggests that we (libertarians, capitalists, free marketists, etc.) should accept the health care status quo and carve out a few areas where a health care market could function. I assume he is either joking or naive. It's tough to have a partly free market anything. The only free market left in health care is when physicians contract with patients for care (ad hoc or fee per year). That's less than one-tenth of a percent of the health care market. All other aspects of health care either government funded or heavily affected by government health care programs.

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