FOR HEALTH CARE WOES, A CAPITALISM PRESCRIPTION
October 25, 2006
Health care costs are not just soaring, they're reaching unaffordable levels. What's the cure? Congress needs to administer a strong dose of capitalism, says David Gratzer, a senior fellow at the Manhattan Institute.
Here are five simple steps:
- Make health insurance more like other types of insurance -- health savings accounts (HSAs) legislation is overly rigid; Congress must expand and revise the structure of HSAs, and level the tax playing field for those not covered by an employer plan.
- Foster competition -- Americans can shop out-of-state for a mortgage and they should be able to do so for health insurance; Congress should reconsider such laws, beginning with the federal Emergency Medical Treatment and Active Labor Act.
- Reform Medicaid, using welfare reform as the template -- Congress should fund Medicaid with block grants to the states, and let them innovate.
- Revisit Medicare -- back in the late 1990s, a bipartisan commission approved a reasonable starting point for Medicare -- junking the price controls, and using the Federal Employees Health Benefits Plan as a model; elderly Americans would then have a choice among competing private plans.
- Address prescription drug prices by pruning the size and scope of the FDA -- it costs nearly a billion dollars for a prescription drug to reach the market, and roughly 40 percent of that is due to safety requirements; this is effectively a massive tax on pharmaceuticals.
None of these steps would be dramatic but all are important. Congress also slowly needs to weigh bigger issues: how to shore up Medicare, create portability of health insurance, and foster a market for medical innovation, says Gratzer.
Source: David Gratzer, "For Health Care Woes, a Capitalism Prescription," Washington Post, October 25, 2006.
For text (subscription required):
Browse more articles on Health Issues