What are the Free-Market Fixes for Healthcare?
Just to prove that Richard Epstein and I are not the same person, Richard came over to Berkeley Law yesterday to debate Obamacare with my friend, colleague, and good old New Deal liberal Jesse Choper.
To my surprise, Richard predicted that the Supreme Court would uphold Obamacare, though he was clear that this was because of the sad state of the Supreme Court and not because he thought it consistent with the original meaning of the Commerce Clause.
But what equally caught my attention was that Richard said there were a number of free-market fixes that Republicans could propose in Congress that could do far more to make health care efficient and more broadly available than anything in Obamacare.
This to me has to be part of the center-right conversation -- it is OK to call for repeal, but to truly win on the issue one has to propose sensible reforms for what most people agree is a dysfunctional system.
I will let Richard post here to do his arguments full justice. But I think that Ricochet folks could start the process of developing a package of ideas to replace Obamacare when the time comes.
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Jan '11
Re: What are the Free-Market Fixes for Healthcare?
Eliminate medicare & medicaid and most insurance regulations.
Oct '10
Re: What are the Free-Market Fixes for Healthcare?
What Utah is doing.
Basically, you need three things for functional healthcare markets (based on the experience of other center-right countries):
1. Near-universal coverage (our goal is to do this without an individual mandate, if possible).
2. Risk adjustment (see the first link).
3. A transparent, lightly-regulated marketplace.
Oct '10
Re: What are the Free-Market Fixes for Healthcare?
Doctors' income must come directly from patients. Patient's must be responsible for all medical payments; insurance, if any, belongs solely to the patient. Employer/state/federal involvement in patient's medical affairs must end; no tax breaks, no mandates, etc.
May '10
Re: What are the Free-Market Fixes for Healthcare?
I agree here. Other than "you can't drop people now they need their insurance laws" (which, really, is a type of breach of contract), I am for an unregulated market. Let's see what sorts of products and services people can come up with.
I bet there is an app for that. What I mean here, is how many apps are out there now that were not before that people cannot live without? Unfettered markets produce amazing things.
Also eliminate all Certificates of Need. If I want to build a hospital next door to one that is already there, good for me if I can make it work.
Make 100% of medical expenses tax deductible no matter where you buy them. This means not only insurance payments, but out of pocket expenses. If medical care is such a "right" then why make me use post tax money for it?
Oct '10
Re: What are the Free-Market Fixes for Healthcare?
I would say let's look at auto insurance to see why it's so relatively inexpensive. If my auto insurance company had to cover my oil changes and tire rotations my premiums would go through the roof. So, we should eliminate many of the requirements for coverage on insurance companies.
Jun '10
Re: What are the Free-Market Fixes for Healthcare?
John Yoo: This to me has to be part of the center-right conversation -- it is OK to call for repeal, but to truly win on the issue one has to propose sensible reforms for what most people agree is a dysfunctional system.
I will let Richard post here to do his arguments full justice. But I think that Ricochet folks could start the process of developing a package of ideas to replace Obamacare when the time comes. ·
This is the kind of thing that will win the day for us all. Simply nay-saying will not convince anyone of our point but a viable alternative will. It's good to see someone here raise the call for ideas.
Jun '10
Re: What are the Free-Market Fixes for Healthcare?
A CONVERSATION WITH: VICTOR FUCHS; An Economist's View of Health Care Reform. (Professor of Economics and of Health Research and Policy, Stanford University) :
Q. Are you saying that even though some medicine makes a difference, more medical care can't do much to make us more healthy?
A. I'm saying that almost everyone is getting the medical care that matters to health. Adding more care does not make much difference. The stuff that's really effective, the antibiotics, the appendectomies and so forth -- people get them. Health depends much more on the things we do to and for ourselves or that we don't do.
It depends on cigarette smoking, it depends on obesity, it depends on certain environmental conditions.
Q. So if more medical care does not make us healthier, what should we do to improve our health?
A. Improved health will come about through changes in the physical and psychosocial environments and in individual behavior and in medical advances, not in increasing the quantity of medical care at a given point in time.
Are we trying to fund treatment for fat, sedentary smokers into their 90's?
(Peter: How has Uncommon Knowledge missed Dr Fuchs?)
Feb '11
Re: What are the Free-Market Fixes for Healthcare?
As I understand, the current system gives insurance companies quasi-monopoly power within states. What would be the effect of removing barriers for purchasing insurance across state lines?
May '10
Re: What are the Free-Market Fixes for Healthcare?
Yes, fee-for-service and competition between providers would do a lot to bring costs down, I think. Stop using the tax code to discriminate between individuals who get their insurance from employers and those who purchase it on thier own. If my employer provides my insurance, he/she pays with pre-tax dollars. If I buy my own policy, I pay with money I'm taxed on. Huh? Uncouple health insurance from having a job; I don't get homeowners or auto insurance from my employer - why is health insurance any different? Would it be a good idea to make all medical care tax-deductable?
How about assigned risk pools for people with expensive medical needs? Assigned risk pools seem to work for other types of insurance.
Oct '10
Re: What are the Free-Market Fixes for Healthcare?
Interstate health access isn't a quasi-monopoly problem. The problem is the federal antitrust exemption for health insurers.
It is utterly impractical to simply remove barriers for across-state-line purchasing of health insurance. However, creating competition within states can be done with state law, I believe (Utah companies sometimes seem obsessed over not violating state-level antitrust law, anyway).
Nov '10
Re: What are the Free-Market Fixes for Healthcare?
I've been saying this for a long time, and it's exactly right on.I should insure my body the way I insure my car. The problem is, based solely on my experience, is that most of us already pay for our health insurance as for our car insurance. We don't take into account the fact that the cost of that insurance is far more than what we pay. But our employers pay it. If I switch to simply an insurance policy that covers major medical expenses only, my employer is not going to give me the $1,500 a month that they pay for my insurance. If they did I might be able to break even. But they won't, so I end up paying more for less. So no one buys into the ideal.
Oct '10
Re: What are the Free-Market Fixes for Healthcare?
Joseph Eagar: Interstate health access isn't a quasi-monopoly problem. The problem is the federal antitrust exemption for health insurers.
It is utterly impractical to simply remove barriers for across-state-line purchasing of health insurance. However, creating competition within states can be done with state law, I believe (Utah companies sometimes seem obsessed over not violating state-level antitrust law, anyway). · Mar 11 at 11:48am
The problem with state based insurance regulations are the various mandates imposed upon all policies sold within the state.
Re: What are the Free-Market Fixes for Healthcare?
Bring back "hospitalization" and "catastrophic" policies, and let me pay for the routine doctor visits.
Here is my piece on that from Fox News:
Here's Your Better Health Insurnace Plan, Mr. President
Re: What are the Free-Market Fixes for Healthcare?
We need the opposite of what we have today, a system that encourages you to go for the gold after a small deductible, and doesn't protect you against truly catastrophic problems. We need high deductibles -- to keep a market functioning and competing -- and catastrophic insurance.
Also, not an end to employer based healthcare but reforms that might make it obsolete: end the unequal treatment between a man who buys healthcare for his family on his own, and one who gets it from his office. That might also let health care be more portable. We don't lose our auto insurance when we change jobs; shouldn't have to lose our health insurance either.
Dec '10
Re: What are the Free-Market Fixes for Healthcare?
Transparency and very specific, but very limited minimum requirements.
The HSA is about as good as it gets. A very high deductible policy for catastrophic care with the patient paying ALL costs incurred up to that point with pre-tax dollars. Add the option of buying from any insurance vendor in any state, and this could go a long way to making things affordable, maintainable and downright reasonable.
If the patient defaults, in the short term society is only out the deductible. But, it's imperative that patients are held liable for those debts as they are for student loans.
Edited on Mar 11, 2011 at 12:56pmOct '10
Re: What are the Free-Market Fixes for Healthcare?
Ken Owsley
I've been saying this for a long time, and it's exactly right on.I should insure my body the way I insure my car. The problem is, based solely on my experience, is that most of us already pay for our health insurance as for our car insurance. We don't take into account the fact that the cost of that insurance is far more than what we pay. But our employers pay it. If I switch to simply an insurance policy that covers major medical expenses only, my employer is not going to give me the $1,500 a month that they pay for my insurance. If they did I might be able to break even. But they won't, so I end up paying more for less. So no one buys into the ideal. · Mar 11 at 11:54am
I think that's an important point. I'm not sure but my understanding is that employers can't give their employees a flat amount every to pay for insurance that the employee is responsible for finding, and they can keep whatever they save. That should be changed.
Feb '11
Re: What are the Free-Market Fixes for Healthcare?
This is a key point, insurance is for uncertainties and regularly scheduled maintenance is just about the opposite of an uncertainty. So one fix is to clarify what truly constitutes insurance.
Jul '10
Re: What are the Free-Market Fixes for Healthcare?
Deregulate everything having to do with "health care" (medicine) and let the free market figure it out.
Nov '10
Re: What are the Free-Market Fixes for Healthcare?
Allow the cross-state-borders sale of medical insurance. One of the most Byzantine and archaic impediments to inter-state commerce are the 50 state insurance commissioners. Talk about rent-seekers. These guys should have their pictures in the encyclopedia next to the definition of rent-seeking.
Edited on Mar 11, 2011 at 1:19pmMay '10
Re: What are the Free-Market Fixes for Healthcare?
Let's not forget to put an end to the mandates that providers have bribed the pols to force consumers to purchase with a policy. I don't need fertility treatments or orthodontia with a policy that covers me for a catastrophe. Give me the freedom to decide what kind of coverage is suitable for me.