Health Care Reform: Let's Knock Out the Easy Stuff We All Agree On First


Dear Mr. Republican writes:

The Republican Party is in control of both houses of Congress and the White House. Why then are we having such difficulty passing health care reform? Never mind convincing Democrats to sign on: Why are we having such difficulty convincing members of our own party to support the House and/or Senate measures?

Answer: Misplaced focus.

Both the House and Senate are singularly focused on cutting costs to the government–and not just any costs: only short-term costs. This could only work if health care were only a matter of dollars and cents (short-term dollars and cents, that is). This is not the case however, especially when government cost-cutting leads to higher costs for individual citizens through higher premiums, less coverage, etc. These are the inevitable results of both the Senate and the House bills.

Furthermore, the primary mechanism by which these bills lower short-term costs (and, ironically, the primary mechanism by which they inadvertently raise long-term costs) is by kicking people off their insurance plans–plans that, in many cases, people bought with their own money. The “to-cover-everyone-or-not-to-cover-everyone” ship has sailed, however. That argument is over. If you thought that extending coverage to everyone was painful, just wait until you see what happens when you take that coverage away.

Obamacare increased costs, instituted a Constitutionally-dubious individual mandate, and imposed onerous regulations on health care providers. On the other hand, it expanded coverage, protected those with preconditions, and implemented free-market exchanges (albeit very flawed ones) whereby people can purchase health insurance with their own money. The answer isn’t to wholesale repeal Obamacare. That’s the uncomfortable reality that we conservatives find ourselves in: we’ve campaigned for more than seven years on repealing it only to find that repealing it isn’t the right answer. As I said, despite all its negative aspects, it does indeed have merits as well.

The answer, then, is to FIX Obamacare. Our health care system is enormous: 18% of GDP. No single bill can fix such a large and complicated system all at once. We should expect it to be accomplished in steps over time, and that is precisely what we should be doing. We should not be repealing the other party’s efforts every few years and starting over. We should be cumulatively fixing problems as we can–making improvements and adjustments where we can, when we can.

At this point, our focus should be trifold: (1) ensuring universal coverage, (2) increasing quality of health care services, and (3) lowering costs both to the government and to individuals.

Single-payer systems are the most obvious way to ensure universal coverage, and they are much in style on the Left. I must apologize to the Democrats though: I dismiss that option out of hand. These systems are running enormous deficits in Europe and, in some cases, they are in the process of cutting services. Only in very small, homogeneous countries are they not adding to government deficits appreciably. The United States is the third largest country on Earth, with health care costs that run into trillions of dollars annually. This is not a cost that our government can afford, especially now that our national debt already exceeds 104% of GDP. (No, a single-payer system would not lower costs enough to make it affordable for the government unless quality were severely sacrificed.) Single-payer options are non-starters for me. Period.

We should be thinking outside the box about revolutionary improvements that capitalize on what have always been the bedrock strengths of our economy: free markets and innovation. If I were a dictator, these are the reforms I’d enact:

(1) Protections for those with preconditions.

(2) Repeal of the individual mandate but with a caveat: Those who are able to purchase health insurance but choose not to do so must go on a payment plan for any ER trips or other medical services–including catastrophic ones–and must pay 100% of their own costs at no cost to the government. (Those who are unable to afford health insurance would be covered as they are now. If they lost their coverage, then they would go to the ER for all medical problems, and you know who pays that bill: taxpayers. This is even more expensive than insuring them.)

(3) Change the Obamacare exchanges from many state-based ones to one national exchange. This would add many more options for people to choose among and would subject all insurance companies to nation-wide competition.

(4) Bar the selling of health insurance to individuals in any way other than through the national exchange.

(5) Institute a nation-wide health care regulatory framework. As it stands, health insurance companies can monopolize individual states. It’s time that we subjected them to free-market competition that involved every company in this country, not just those in respective states.

(6) Increase the tax incentives for people to use Health Savings Accounts (HSA), which give Americans 100% control over their own health care without the interference of insurance companies or considerations of doctor networks, covered/non-covered services, etc. These tax incentives should extend both to individuals and to companies that offer HSA’s to their employees and contribute to them.

(7) Require all hospitals, clinics, etc. to publicly publish prices for all services offered. This would enable people to begin searching for value as we do with all other products and services.

(8) Following up on number 7, require all hospitals, clinics, etc. to report RESULTS–good and bad–as well. When Americans know results and prices, they can start to make informed, free-market decisions about health care, and hospitals, clinics, etc. will have to compete both on price and on quality.

(9) Reform the malpractice environment. The cost of malpractice insurance is too high, and the caps (when they exist) are too high. I understand that having to undergo surgery again to remove a tool that a doctor left behind is terrible, risky, and costly. It shouldn’t happen. That said, it does sometimes happen, and you shouldn’t get to sue and become a multi-millionaire as a result of it. Malpractice has gotten out of hand and is driving up costs.

(10) Stop having Medicare and Medicaid pay for services. Instead, institute “pay for results.” This would lead to higher reimbursement for preventative medicine and higher reimbursement for services that lead to better results. There’s no reason that a CT scan needs to cost $3,000 here when it costs the hospital almost nothing to administer it and when it costs only $200 in some other countries. This is what happens when you pay only for services: it creates incentives to perform a lot of them and to charge as much as possible for them. Under a “pay for results” system, that CT scan would be reimbursed commensurate with its results as part of a broader treatment plan.

(11) Fraud in Medicare and Medicaid is somewhere between $50 billion and $150 billion annually. It’s time that we cracked down on that with a vengeance. There should be a severe mandatory minimum sentence for anyone caught defrauding ANY welfare service–health care or otherwise–and for those who facilitate it.

(12) Require all medical providers who accept government-sponsored patients to use electronic-only record systems. It’s time to step into the 21st Century.

(13) Block hospital mergers that lead to regional monopolies. Hospitals have long argued that allowing them to consolidate without limit enables them to cut costs for patients. This is patently false. A Bloomberg study recently confirmed what we really all new: hospitals generally increase costs even further after consolidating. Thus, costs go up and alternatives down. The same goes for health insurers.

These things cannot be done secretly. Why is McConnell writing health care bills in secret and then trying to immediately rush them to a vote before anyone has read them? Why is he twisting arms by telling GOP senators that if they don’t vote for it, he’ll seek a bipartisan solution? Since when is bipartisanship a threat? Isn’t reaching across the aisle in order to solve problems exactly what we pay these people to do? Basically, McConnell is threatening to simply do his job, which is plain odd. That itself seems like a form of malpractice.

I’m concerned that the goal of the Republican Party’s health care efforts has become simply to repeal Obamacare, not to actually offer more coverage at a lower price for higher-quality services. We’ve lost sight of the goals. The goals are to reign in deficits and increase quality, not to simply repeal a certain bill.

While we bicker about three bad health care bills (Obamacare, House bill, and Senate bill), real health care reform languishes. Tax reform languishes. The national debt grows. China usurps our leadership role in certain areas. Amtrak train derailments have become more common than safe arrivals. Other countries increase their lead on us in the public transportation arena. American companies move overseas. Wages remain largely stagnant. North Korea continues to work toward a deliverable nuclear weapon that they promise they’ll deliver to the continental U.S. at some point.

These are real challenges that must be tackled, and it’s time that we started to tackle them. My party has exactly zero accomplishments to its name so far, and we’ve been in complete control of the government for nearly six months. Distractions like the “voter fraud” commission and loss of sight of true goals are the cause.

 I think that the above proposals would go a long way toward fixing our health care system and reducing government deficits. If we could talk about those–and the corresponding specifics of other issues–then I think we’d finally be on track to doing good work for this country and her citizens.

Tom Woods Liberty Classroom

libertyLOL’s response:  Negative. REPEAL.

The end result of more regulation is ONLY higher prices. More regulation? More Government interference? More expensive. NOTHING GOVERNMENT CAN DO CAN RESULT IN LOWER COSTS (Economics in One Lesson-Hazlitt)

Most would prefer the doctor, network and cost of the care they received prior to ObamaCare. Sure there’s some precondition cases that have sob stories. So here’s how to fix:

1) Repeal

2) Get government out of the way of charity. I often give to GoFundMe pages for people with problems. Last week I actually heard someone say “Why should I give to that person, that’s why I pay taxes”. What a horrible thing to say but it’s the result of exporting our personal responsibility to each other to a monstrosity of a federal government.

3) Instill Price Transparency, Allow HSAs to prevent ill effects of the Third Payer Problem.

4) Decrease barriers to entry for those wanting to become doctors (increase supply of care brings down costs).

5) Incentivize and Educate on Preventative Care (eating spinach instead of Big Macs).

6) Allow selling of insurance plans across borders (even national borders), competition increases innovation, value and decreases costs.

I truly believe that getting out of the market’s way in Health Care could find us in 5-10 years with phenomenal system. One where I feel sick, I click on an app in my phone, a physician Skypes with me or comes to my house, he/she puts a prescription in to the local CVS and it arrives that evening by UberMeds.

I only really disagree with your #1, 3 and 4

I truly believe that getting out of the market’s way in Health Care could find us in 5-10 years with phenomenal system. One where I feel sick, I click on an app in my phone, a physician Skype’s with me or comes to my house, he/she puts a prescription in to the local CVS and it arrives that evening by UberMeds.

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Dear Mr. Republican’s Response:

(1) I didn’t advocate for more regulation. I advocated for smarter regulation. Right now we have 51 health care regulation systems in place. I’m advocating eliminating 50 of them.

(2) Repealing Obamacare wouldn’t lower costs. It would only lower the rate at which they are increasing. That’s not the only point though. The number of uninsured people would increase to more than 40 million, and they would impose an enormous long-term cost through ER visits since that’s the only way those people interact with medical facilities.

(3) Giving to GoFundMe accounts is great, but that’s not a serious national health care policy. We can’t base our health care system on GoFundMe accounts.

(4) Increasing the supply of doctors doesn’t drive down costs. Even Pfizer’s last CEO admitted this (Pfizer, of course, profits from the actions of doctors). Doctors charge the “going rate” for their services because their costs are kept largely a secret. Patients cannot price shop. We need more doctors for a lot of reasons, but that won’t lower costs–at least not until we require them to public publish both costs and results.

(5) As far as selling health insurance across borders, preventative steps, etc. I agree with you. I endorsed all of those in my post.

Libertarian Shirts Libertarian Country Liberty
libertyLOL’s response:

1) Good,

2) you’re thinking short term, Eliminate Obamacare and the free market will rush to profit off the immediate gap. People could be re-insured on Day 2.

3) Wasn’t saying GoFundMe specifically, but charities in general are exponentially more efficient in providing care than government.

4) Through price transparency, which you advocate, this problem is solved. Yes, right now a supply might not change prices, but that’s because the current systems is garbage, which we both agree. Once we have transparency, doctor’s salaries become supply/demand enforced by the market.

5) Look at us! 98% in agreement! Let’s go change the world! (But Repeal first :P)

Dear Mr. Republican:

I’m not thinking short term at all. I’m advocating against that. Repealing Obamacare would cut costs to the government in the short-term and raise them over the long term. You don’t pull the rug out from under people without another plan in place. Millions of Americans would suddenly lose access to everything except an ER. That is a recipe for disaster. You’re forgetting that the health care industry does not operating according to supply and demand. It’s not a free-market industry. Obamacare isn’t the reason for that though. Even before Obamacare, the health care industry did not respond to the laws of supply and demand. That was one of the fundamental problems. Patients have no access to information, and markets are monopolized. More doctors simply led to more doctors charging high fees.

Charities are not a viable national health care strategy. Charities are a supplement. They’re great–they just can’t be THE plan.

Anyway, we had a TON of problems before Obamacare came along. Repealing Obamacare won’t solve problems that already existed, and forcing millions of people into ER’s without insurance certainly won’t solve anything. It’s time for a good, comprehensive plan.


You don’t pull the rug out from under people without another in place” is talking point. The rug should never have been there. This just proves that entitlement programs never actually go away. Cheat to get them in place, no one will have the balls to remove them.

Agreed, it’s a complex problem. I’m just pushing harder on allowing it to become a free-er market. 5-10 years, we could lead the world in Xrays-R-Us specialty stores and AmazonMobileCatScan drive-by trucker units.

Look at the price trends of ‘non regulated’ or cosmetic surgeries. We’ve seen LASIK and Breast Implant prices drop precipitously, but the quality has only gotten better.

The government doesn’t sit around and write thousands of pages of regulation in these areas.

Normal healthcare? Care quality and choice have dropped, prices have increased…

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