At RealClearPolicy Gary Wolfram proposes what looks to me to be a dystopian plan for health care reform:
A solution much more likely to aid the poor is for the government to move Medicaid and Medicare to a form of health savings account. It would provide complete coverage for catastrophic care, and fund an account for recipients that they could use on health care spending. This would cause people to ask “How much does that test cost here versus another clinic?†This in turn would incentivize places like Wal-Mart having to employ nurse practitioners at their pharmacy who can provide health care at reasonable prices. Additionally, it would also spur innovation in medical techniques and pharmaceuticals that make people healthier at lower costs.
Such programs would only be available to the bottom 20 percent of the income distribution, with a phase out of the benefit as income rose. And eliminating the tax deductibility of employer-based insurance or allowing a deduction for private insurance premiums would prompt a move to individual health insurance policies rather than employer-provided insurance. The result would end the fear of losing insurance due to unemployment.
Note that this plan only renders the consumer side of the health care equation “market-based”. The vast array of regulations and subsidies given to providers including patents, occupational licensing, certificates of need, etc. would remain in place.
If Medicare is eliminated, how would the present residency system be funded? Presently the Medicare system pays about $80,000 for every medical resident, an enormous subsidy to medical education. Would the subsidy be paid from the general fund or would it be eliminated?
His proposed system would only result in reduced spending if two things happen: there is presently considerable over-utilization and reduced consumption would not be made up for with increased prices, i.e. producers will accept pay cuts. Dr. Wolfram appears unaware that nearly all health care consumption is directed by producers rather than patients.
It seems more likely to me that medical billing would rise, whether through higher prices or more procedures, to make up for the elimination of Medicare and Medicaid spending. The elderly who don’t fall within the bottom 20% of the income distribution would be penurized and more and more of the middle income would become de facto working poor.
And we haven’t even touched on the issues for the insurance industry, e.g. at this point for practical purposes the individual insurance market his system relies on no longer exists.
Yet another guy advocating for market reforms when this have never been shown anywhere to be successful in controlling costs in health care. Again, another guy who thinks the kid of care you would get at Walmart is a significant percentage of health care spending. And of course, this one really gets me.
“And eliminating the tax deductibility of employer-based insurance or allowing a deduction for private insurance premiums would prompt a move to individual health insurance policies rather than employer-provided insurance. The result would end the fear of losing insurance due to unemployment.”
So you lose your job and have no income. If you are like most Americans, you have about $1000 in your savings account. How do you avoid losing your health insurance just because it is an individual plan? Who is going to pay for it?
Why can’t they get people knowledgeable about health care to write about this stuff?
Steve
“Who is going to pay for it?”
Oh, I don’t know. I suppose people could budget and save. Just like they do food, clothing, shelter, car and homeowners or renters insurance, vacations, eating out, beer……….
I guess health care insurance is so special you can’t do that………
“I guess health care insurance is so special you can’t do that………”
If you have the money, yes you can do it. Many people don’t. This is before accounting for the fact that health care and thus insurance costs are rising much faster than incomes.
And it’s also a lot harder to economize. It’s easier for a family to budget and reduce spending on housing, a car, food, etc. than it is for health insurance.
If your grocer determined what groceries you would buy, food would have the same characteristics.
I think, now I’ve read the piece, Wolfram’s idea of “private” is that people with such savings plans determine their own spending, within some limits. You can use your medical plan to pay for aspiring, for instance, but not booze or rent. However, the actual cost for medical savings plans would be borne by the government, or subsidized, which is to say taxpayers. So this is basically medicare for the poor, coupled with some requirement that the non-poor have medical savings plans of uncertain value.
I’d be dead now, for over a year now, under such a scheme. So I have to think it’s flawed. YMMV.
I have some experience with child care savings accounts, which work basically the same way HSA’s do. Personally, I don’t think they will work very well for health care for most people. Like childcare savings accounts, they mainly serve as a tax benefit for upper income families.
One of the overlooked elements in health care plans such as this one is that nurse practitioners already feel that they are underpaid. Cut their pay more and morale will be undermined. They have student loans, too.
Sure would hate for that sweet girl I saw last week to turn sour. She’d probably go do something else to make money.