Republicans seem to understand that repeal of President Obama’s health care law is necessary. Unfortunately, many of them seem to think repeal is sufficient as well. It isn’t. This is why it’s so important that a GOP leader like House Budget Committee Chairman Rep. Paul Ryan, R-Wis., began presenting a viable plan to replace it with his speech Tuesday at Stanford’s Hoover Institution.
The big problem afflicting our health care system is skyrocketing costs. The Kaiser Family Foundation reported this week that in 2011, premiums for employer-based health insurance shot up 8 percent for individuals and 9 percent for families over 2010. As Ryan noted in his speech, “If you look at our debt-and-deficits problem, it really is a health care spending problem.” Health care spending accounts for 25 percent of the U.S. budget (excluding interest payments), and within decades that number will grow to 45 percent.
Obamacare stands to make things worse by imposing a new layer of subsidies and regulations on top of an already broken system. Obama’s solution to the problem of costs rests with 15 bureaucrats (his Independent Payment Advisory Board) charged with rationing care.
Ryan wants to change the government policies that insulate the health care consumer from nearly all costs, thus distorting incentives for doctors and patients alike. Price signals, a staple of any functioning free market, have been muffled in health care, where third parties (insurers and the government) pay roughly 88 percent of health care costs, up from 52 percent in 1960. Because patients don’t pay the bills, most of them have no idea how much services cost, let alone what they are worth. This leaves doctors and hospitals in a competitive vacuum where price and value bear little relation to one another.
“Instead of top-down price controls imposed by 15 bureaucrats at IPAB,” Ryan said, “let’s try bottom-up competition driven by 300 million consumers.” Ryan calls for a uniform tax credit for everyone to purchase health insurance. This would immediately end several problems created by the prevailing employer-based insurance system, which offers fewer options, traps many Americans in jobs they would rather leave and causes many to over-insure themselves. For government health care programs, Ryan expanded on the plan he outlined in his House-passed budget, which promotes greater freedom and flexibility than Medicare or Medicaid currently offer.
It’s the free market vs. centralized control, clarified and pitted against one another.
Americans need to choose.
And I’m hoping that’s exactly the dynamic presented them in the 2012 elections — courageous attempts by the establishment GOP to defend the status quo against marauding extremist masses nothwithstanding.
h/t Don Boudreaux, where go, to see Bob Higgs’ contribution
The biggest problem “afflicting” our health care system isn’t skyrocketing costs, its the notion that everytime and anytime some new drug or treatment is developed everybody has a right to it.
#2 – as long as they pay for it, and not me – no problem. Heh.
I’ve recently started seeing a chiropractor to deal with a sciatica problem. With his cash discount and the fess he waives for cash patients, it’s cheaper to just pay him than what the copays would be. We’re spending as much on red tape as we are on actual medical care.
Beck used to talk about the plan he gave his employees which, IIRC, is no longer legal in NY. Everybody got $5000 a year to spend as they see fit on health care, and he had a major medical plan to cover catastrophic stuff that didn’t fit inside $5K. Anything left over at the end of the year, the employee got to keep. This gets people invested in looking at the cost of their care and gets them shopping just like they would for anything else.
I’m reminded of the GP in NY who offered all of his services one might need for a reasonable flat monthly fee. NY, of course, shut him down.
It sounds like Beck isn’t as loony as many want to paint him. That health care plan is perfect.
On another note, my insurance is dropping coverage of one of my primary medications. Yay me.
Does it run afoul of their “no good ideas” statute?
No, I believe it’s the “Our way or Riker’s Island” clause.
This:
The root of the healthcare problem is just that simple. Without true competition, absent artificial price controls, or the network of bureaucracy that currently insulates the consumer from costs, there are no incentives for providers to compete on either the cost or service front.
Add in some reasonable tort limits to protect providers from the risk of outrageous “punitive” damage suits, and we’d see prices begin to fall dramatically, while insurance, relegated to the realm of true “safety net” status, would finally become affordable again.