NCPA - National Center for Policy Analysis

Priceless: Curing the Healthcare Crisis

June 17, 2012

The problems in American health care are likely to get worse -- much worse -- before politicians get around to making them better, says NCPA President and CEO John C. Goodman in his new book, Priceless: Curing the Healthcare Crisis.

With the advent of the Patient Protection and Affordable Care Act (ACA), perverse incentives will be set in place nationwide.  Moreover, the ACA will not control costs.  The Affordable Care Act is relying on dozens of pilot programs and demonstration projects to find better ways of delivering care, the results of which have been disappointing.  Further, we will still be left with a system in which no one will be choosing between health care and other uses of money.  And if no one is making those choices, health care spending will keep rising in the future with all the relentless persistence it has shown in the past.

The ACA may actually reduce access to care for our most vulnerable populations.

  • The 32 million newly insured will try to double their consumption of health care and middle- and upper-middle-income families will have more generous coverage than they have now, but there will be no increase in supply.
  • As the rationing problems escalate, those with private coverage will surely outbid people paying Medicaid rates for doctor services and hospital beds.

What would a better approach to American health care reform look like?

  • A large portion of our health care dollars would be placed in Health Savings Accounts that we individually own and control. Patients would pay for most primary care, most chronic care, most discretionary care and extra out-of-network costs from these accounts.
  • Insurance companies would specialize in the business of insurance -- that is, pricing and managing risk -- and leave the management of health care to doctors and patients.
  • Employers would be free to buy individually-owned insurance for their employees. They would offer a monetary contribution to be applied to the health insurance premiums of each employee, each pay period.
  • Patients with chronic conditions would be empowered to manage their own care and health care dollars, achieving results as good as or better than under traditional care.
  • Individuals would be allowed to insure against pre-existing conditions, so they could switch health plans without financial penalty. Health plans would thus have incentives to compete for all potential enrollees, regardless of health condition.

Source: John C. Goodman, Priceless: Curing the Healthcare Crisis, Independent Institute, June 2012.

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