The high and uncertain cost of health care is a major problem for all of us. The problem has one cause: Those needing care do not pay directly for it. Employers pay for it with the insurance they purchase and the government pays for it with its various programs. But since the user does not pay, the normal price discipline provided by our free enterprise system is eliminated.
Moving away from this current system of nonpayment by the user should be a top priority of Congress. Individual bills passed one by one could accomplish this in an optimum manner.
Here are some well-worn and some new ideas...
Block grant funds to states to fund care for the seven million Americans who have preexisting conditions.
Provide transparent pricing for all service providers and medicines on the internet.
Pass tort reform legislation to reduce the unnecessary tests doctors do just to avoid a lawsuit. A model for this is the successful legislation passed and monitored in Texas by Dick Weekly’s Texans for Lawsuit Reform. This legislation has prevented the filing of many bogus class action lawsuits and placed a cap on others at a reasonable level. The group’s efforts have stimulated the flow of doctors into Texas and is primarily responsible for its great economy.
Increase the number of medical care providers by allowing and encouraging more qualified nurse practitioners and physician assistants.
Allow state licensed doctors to practice across state lines to increase competition and reduce prices.
Eliminate the requirement for government-imposed medical record keeping. If government were less in the game a private standard would soon evolve. This has happened in every other area of private industry resulting in a reduction in cost and an improvement in efficiency from the bottom up by those having a vested interest in an efficient process.
Tax laws should be changed to allow amounts to be set aside in private, permanently owned Health Savings Accounts with few restrictions on their use. These HSA's should be allowed to be rolled over to surviving family members and allowed also to be used in caring for elderly parents. The resulting competition created by those shopping for value with their own money would substantially reduce their own health care costs as well as those of everyone else.
Continue the current evolving practice of individuals paying a monthly fee for regular medical care combined with a high deductible insurance policy or a cost-sharing pool to cover nonroutine procedures. Having little involvement, an insurance company’s overhead cost and profit to the purchaser then would be quite small. Allowing the use of HSA's in paying for these fees would also help.
Health insurance companies should use a car insurance model for calculating premiums. Car insurance uses actuarial data only, including the cost of defined actual risks: the driver, the value of the car and the car’s expected problems. With this model no longer would a policy’s coverage absurdly include the cost of men having breast exams and women having prostate exams.
Eliminate the outsized influence of state boards of insurance and allow insurance to be sold across state lines.
Design portable insurance policies tied to the purchaser, not a third party.
Allow individuals and small businesses to form their own insurance groups, eliminating their current competitive disadvantage with larger entities.
Allow a variety of cheaper insurance policies partnered with higher deductibles.
Although seventy percent of employees are happy with the health care provided by their employers, few are aware of how much this reduces their own compensation. It most cases it is quite substantial. A recent Rand study shows that employers pay four times what Medicare pays for care while still having the added cost and burden of an HR department to handle the necessary paperwork. Because there is no incentive for the employee to spend his or her health care dollars judiciously because “insurance is paying for it” the total cost of insurance to the employer is unnecessarily large.
Following the implementation of the above improvements, each person’s health care costs would diminish. At this point, employees would have an incentive to pay for their own health care coverage. As time passed, when they did so they could use this to negotiate themselves higher salaries while at the same time allowing their employer to reduce their own total cost. With insurance no longer being tied to an employer, employees would no longer feel a need to stay at a company “because of the insurance,” and being happier in the job they chose they would add to America’s productivity. And employers without the burden of handling health care could now spend more time and money on their core business.
President Trump has vastly improved the American economy by eliminating regulations, often by executive orders one at a time. Congress should follow suit by implementing the above ideas - passing laws one at a time.