10 Principles for a republican Approach to Health Care, part 2

   After a 4-day pause to build suspense (with apologies to our faithful reader), the rest of the list:

    6. More skin in the game: Individuals with a significant financial stake in their health care consumption will be much more likely to maximize the benefit of each dollar spent.  Once again, the point is not to bring about an arbitrary reduction in health care spending because in our Olympian wisdom we have determined Americans spend too much on their health, but to make the dollars that are spent, however many they may be, count.  Making health savings accounts more available, offering a greater variety of health insurance ratings, and similar reforms would allow a real market for health services to emerge.  Competition for customers would be good for doctors, pharmacies, and hospitals – and for health care consumers.  Like most of the reforms on this list, there is no need for the government to create such opportunities – it need only remove the regulations that keep such options from emerging in the present market.

   7. Tort reform: It is easy to complain about the large awards in headline-grabbing civil cases, yet there is not much more benefit to conservative social engineering than liberal social engineering.  Tort reform should not happen just because we don’t like trial lawyers (and sometimes even their clients) getting fabulously rich in “rainmaker” cases.  There is a problem, however, in the area of tort law that has emerged over the last generation from the combined efforts of anti-capitalist ideologues and wealth-seeking trial lawyers: the rise of non-quantifiable damage claims and the use of civil lawsuits in the place of professional discipline and criminal law.  The civil courts are well-designed for adjusting property claims.  Someone who has suffered an economic loss can recoup that loss in a reasonable process that will generally end in a common sense out-of-court settlement.  In such cases, quantifiable monetary losses are compensated with monetary awards.  But in an increasing number of situations, large awards are given for non-economic damages like psychological distress and for non-compensatory purposes like punitive awards.  The latter category is especially problematic.  Narrowing the context to medical malpractice lawsuits, a doctor whose actions truly deserve punishment should either be charged with criminal negligence or brought before a professional panel for review and possible discipline.  Using the civil courts instead unnecessarily increases the cost of liability insurance and therefore medical services while inappropriately awarding plaintiffs money that is essentially equivalent to a fine for criminal activity.  Whatever can be quantified in terms of income lost, new expenses born, and the like is an appropriate item for inclusion in a civil suit settlement or award.  Non-economic damages, however, should be capped at a low number or prohibited altogether.  As long as there are medical boards of review and criminal courts are open, there is no need to use the civil courts inappropriately to police the medical field or any other.

   8. Eliminate mandatory coverage regulations: The more items that are included in mandatory coverage regulations, the more homogenized the health insurance industry becomes.  Such regulations are no doubt responsible in part for the large number of the uninsured in the United States.  For those who are young and healthy, particularly, there is little reason to pay for a policy that has an artificially high price because it covers all sorts of medical care they will never need.  My family is part of a non-insurance health care cooperative (and therefore among the technically uninsured) that does not reimburse expenses generated as a result of certain lifestyle choices.  This makes the monthly fees considerably less than a comparable insurance plan, serving the needs and desires of those involved, but has made the company liable to legal action in a number of states on the grounds that it is a disguised form of insurance.  What public interest is served in the attempts to make such cooperatives more expensive or eliminate them altogether?  Deregulation in this area would allow a much larger number of Americans to find suitable, affordable insurance.

   9. Allow insurance competition across state lines: When each state becomes a health insurance island, the interests of consumers, once again, are compromised.  It is no violation of federalism to make it possible for consumers to purchase insurance policies generated in other states.  In fact, it was one of the very purposes of the Union to create a free market among the several states.  Article I, section 10, of the Constitution specifically prohibits placing tariffs on goods entering one state from another.  The regulatory “tariffs” that limit consumer insurance options violate the spirit, if not the letter, of that principle.

   10. Insurance for citizens, not workers: The present system of employer-based health care, largely the result of special corporate tax benefits associated with providing coverage, causes a number of distortions in the health insurance market.  As argued in previous posts, it obscures a significant portion of the cost of health care decisions.  It also creates many of the oft-noted problems in finding coverage experienced by people with pre-existing conditions.  With the average person changing jobs a half dozen or more times during his work life, each period of transition creates a potential choke point for reinsurance.  Eliminate the tax advantages for the present system and a whole variety of citizen-based, rather than employee-based, plans would emerge that could follow the individual or family from one job to the next over the course of one’s entire working career. 

   As the congress returns next week and President Obama attempts to rekindle the smoldering fires of “comprehensive health care reform,” there will be much pressure from liberal media, academic, and political elites to approve a “compromise” plan with only cosmetic changes to the current House bill on the grounds that something is better than nothing in the midst of our present health care “crisis.”  It has been my desire in this extended series of posts to add my little yelp to the strong voices of many lion who deny this claim.  There are many things worse than our present health care system – including the consequences of almost every significant reform bill that one could imagine coming out of the current congress.  And this should not surprise us – since almost all of the legitimate problems in the present market for health care are the result of previous government reforms. 

   Politics in a hurry is a recipe for bad policy.  Politics in a hurry at the point of a left-wing ideological gun is a recipe for really bad policy.  Politics in a hurry at the point of a left-wing ideological gun under the pressure of an imaginary crisis is a recipe for just about the worst policy of all.

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1. medsearch says:

   September 6, 2009 at 10:48 am

   Any discussion of health care reform which does not include tort reform is a sham. As long a physicians have to practice defensive medicine to avoid the parasitic attorneys feasting off the system, controlling medical costs is a pipe-dream!

   In addtion, who will replace the 250,000 jobs which will be lost to reform? In my industry, medical sales, we have already lost 20,000 jobs in medical sales as medical suppliers prepare for health care reform. Learn more at http://www.gorillamedicalsales.com .
2. atlscottsman says:

   September 6, 2009 at 3:51 pm

   If you are interested in keeping the free marketplace in healthcare, one should enroll into a High Deductible Health Plan and open a Health Savings Account. Then enroll in http://www.MyHSArewards.com to easily contribute more money into your HSA by simply buying your everyday things through their network of over 300 national merchants. If you want to learn more about HSAs, then go to http://www.HSAeducator.com.
3. Scott says:

   September 8, 2009 at 10:49 am

   Hi Matt,

   Medicaid reform is also a conversation that needs to be had. According to Brian Schwartz’s “FAIR Health Care: Free-markets, Affordability, & Individual Rights” plan (see website), this can be accomplished by creating HSAs for Medicaid recipiants as well as allowing Medicaid to compete with charities by establishing a dollar-for-dollar tax deduction for donations to qualified. His arguments for both are worth a read.