Georgetown University’s bookstore recently had an essay contest about health reform. The requirement was a 300-400 word response to the following question:
What essential elements should be contained in the federal health care reform bill?
Here was my response (after the jump)
“Starting in the 2060s,” the Congressional Budget Office told Congress, “projected deficits become so large and unsustainable that CBO… cannot calculate their effects.”[1]
Translation: if we don’t solve our spending problem, we’re in for one hell of a ride.
It’s tempting to blame war, Bush tax cuts, or pork for this mess. These all are contributing to our fiscal demise, but they’re small potatoes compared to healthcare spending, which will account for 90% of the increase in deficits over the next seventy years.[2] Individuals as well as the government are being squeezed by cost inflation. Insurance remains unaffordable for millions, and premiums are growing faster than the economy can catch up.[3]
To avoid fiscal catastrophe, any legislation reforming healthcare must make systematic changes that prioritize cost reduction over expensive welfare programs. To do this, reform must pursue policies that promote competition, empower patients, and decrease costs.
The first essential element of reform is to allow for more competition. As current laws stand, many states prohibit individuals from buying health insurance plans sold in other states. This protects insurance companies from out-of-state competition, allowing insurers to increase prices while decreasing the quality of insurance. Healthcare reform should allow patients to purchase plans from a nationwide, competitive market.
The second element of health reform would be to move away from an insurance-based model to a market-based model of healthcare. Current tax and regulatory laws promote health insurance that covers routine care, like checkups. But because routine care is generally covered by insurance, patients are no longer cost-conscious; they no longer shop for good deals, and doctors see no need to cater to price and control costs. In the end, healthcare costs increase for everyone. Health reform must promote a healthcare market that encourages competitive prices and quality, not the convoluted insurance model we have today.
Lastly, policies must be enacted to control Medicare’s costs. Although this may mean necessary cuts in benefits, savings can be also found in combating fraud and paying doctors at a flat rate, rather than for every (sometimes unnecessary) service provided. These policies will help reduce needless costs and help alleviate our fiscal troubles.
Reforming healthcare does not require an expensive public option or unsustainable entitlement programs. It simply means empowering patients, not insurance companies or government bureaucrats, to access more choices, become cost-conscious, and take responsibility for their own healthcare spending decisions.
[1] http://www.cbo.gov/ftpdocs/104xx/doc10455/Long-TermOutlook_Testimony.1.1.shtm
[2] http://cboblog.cbo.gov/?p=328
[3] http://www.cms.hhs.gov/NationalHealthExpendData/downloads/highlights.pdf