Characteristics Of An Ideal Health Care System

Policy Reports | Health

No. 242
Monday, April 30, 2001
by John C. Goodman


Reform of the U. S. health care system is less complicated than it at first might appear. The building blocks of an ideal system are already in place. The federal government already generously subsidizies private health insurance as well as safety net care. What is wrong with the current system is that there are too many perverse incentives.

One could reasonably argue that government is doing more harm than good, that a laissez faire policy would be better than what we have now.

"We should act quickly to replace perverse incentives."

Nonetheless, if government is going to be involved in a major way in our health care system we should act quickly to replace perverse incentives with neutral ones. In particular:

  • At a minimum, government policy should be neutral between private insurance and the social safety net - never spending more on free care for the uninsured than it spends to encourage the purchase of private insurance.
  • Government policy should also be neutral between individual and employer purchase - allowing the role of the employer to be determined by individual choice and competition in the market place.

If we applied these two principles and no others, we would go a long way toward creating an ideal health care system.

NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.

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