Friday, August 07, 2009

Dr. Krauthammer Prescribes a Cure for What Ails Health Care

In today's Washington Post:
... Let me offer mine: Strip away current inefficiencies before remaking one-sixth of the U.S. economy. The plan is so simple it doesn't even have the requisite three parts. Just two: radical tort reform and radically severing the link between health insurance and employment.

(1) Tort reform: As I wrote recently, our crazy system of casino malpractice suits results in massive and random settlements that raise everyone's insurance premiums and creates an epidemic of defensive medicine that does no medical good, yet costs a fortune.

An authoritative Massachusetts Medical Society study found that five out of six doctors admitted they order tests, procedures and referrals -- amounting to about 25 percent of the total -- solely as protection from lawsuits. Defensive medicine, estimates the libertarian/conservative Pacific Research Institute, wastes more than $200 billion a year. Just half that sum could provide a $5,000 health insurance grant -- $20,000 for a family of four -- to the uninsured poor (U.S. citizens ineligible for other government health assistance).

What to do? Abolish the entire medical-malpractice system. Create a new social pool from which people injured in medical errors or accidents can draw. The adjudication would be done by medical experts, not lay juries giving away lottery prizes at the behest of the liquid-tongued John Edwardses who pocket a third of the proceeds.

The pool would be funded by a relatively small tax on all health-insurance premiums. Socialize the risk; cut out the trial lawyers. Would that immunize doctors from carelessness or negligence? No. The penalty would be losing your medical license. There is no more serious deterrent than forfeiting a decade of intensive medical training and the livelihood that comes with it.

(2) Real health-insurance reform: Tax employer-provided health-care benefits and return the money to the employee with a government check to buy his own medical insurance, just as he buys his own car or home insurance.

There is no logical reason to get health insurance through your employer. This entire system is an accident of World War II wage and price controls. It's economically senseless. It makes people stay in jobs they hate, decreasing labor mobility and therefore overall productivity. And it needlessly increases the anxiety of losing your job by raising the additional specter of going bankrupt through illness.

The health-care benefit exemption is the largest tax break in the entire U.S. budget, costing the government a quarter-trillion dollars annually. It hinders health-insurance security and portability as well as personal independence. If we additionally eliminated the prohibition on buying personal health insurance across state lines, that would inject new and powerful competition that would lower costs for everyone.

Repealing the exemption has one fatal flaw, however. It was advocated by candidate John McCain. Obama so demagogued it last year that he cannot bring it up now without being accused of the most extreme hypocrisy and without being mercilessly attacked with his own 2008 ads.

But that's a political problem of Obama's making. As is the Democratic Party's indebtedness to the trial lawyers, which has taken malpractice reform totally off the table. But that doesn't change the logic of my proposal. Go the Reagan-Bradley route. Offer sensible, simple, yet radical reform that strips away inefficiencies from the existing system before adding Obamacare's new ones -- arbitrary, politically driven, structural inventions whose consequence is certain financial ruin.
My Comments:
Unfortunately, this plan, which would probably succeed in providing actual universal coverage, makes too much sense and skewers too many Democrat sacred cows for the present Congress and Administration to enact it.

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1 Comments:

At 8/07/2009 4:33 PM, Anonymous Big Tex said...

Certainly is a sensible plan. One additional benefit would be no longer needing COBRA insurance in the event you lose a job. In our case, we were expecting our second child when a layoff struck. Myself and our eldest took, a cheap plan, however, my wife was required to stay on the COBRA plan in order to ensure that she could keep pre-natal care. No other company would ensure her due to the pre-existing condition.

Another benefit I see is insurance companies competing for my business. Competition is good.

Krauthammer's proposal is very much similar to others I've been reading. Why, oh, why is the default position to turn to Uncle Sam for a solution?

 

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