Monday, November 30, 2009

Why Believe the CBO?

Here, Daniel Mitchell provides information about why the CBO's estimates of the projected cost of ObamaCare are dead on arrival. The CBO's estimates are nothing more than political pablum. For readers who like video, see it here.

How much do you want to spend on health care? Never mind; it won't be you who decides if ObamaCare is passed by the Dems. Much could be done to improve our nation's health care system. Here's a short list:

1. Decouple health care from employment altogether. The pool of insured should be as large and diverse as possible --- the whole nation comes to mind. There is no justification for linking health care insurance to a particular company's employee pool. A large, diverse pool of insured persons maximizes the opportunities for spreading risk --- the insurance principle.

2. Require most people to purchase a "base" health care insurance policy (just as we require most people to purchase auto insurance). Evidently, if the decision is left entirely up to individuals, way too many people won't purchase health care insurance at all. Deciding what would be covered in the base policy will remain a political problem, but no more challenging than deciding what must be in a base auto insurance policy.

3. What would be covered in a base health care insurance policy would be prescribed by law; any insurance company selling health care insurance at all would decide how to price its base policy (keeps competition alive and well), but all such companies would be required to offer the base policy as part of their product offerings to be eligible to sell health insurance at all; the base policy should provide for catastrophic care; insurance is supposed to cover high-cost, low-probability events; ordinary health care that most people want should be met by individuals from their own wallets. Open market competition, not bureaucrats, should determine market prices for health care.

4. Expand the number of medical schools that train doctors and other health care professionals; remove the supply-side restrictions now in place. No one is talking about this part of the problem; supply-side restrictions have kept doctor incomes higher than they would be otherwise for decades. If you don't think so, try getting accepted to medical school, even with stellar grades.

6. Require doctors to give their patients a price list for all medical procedures they perform. We require food manufacturers to list calories on packages, so this idea isn't particularly extreme, really. Did you know how much your last medical treatment was going to cost? Neither did I. Would you buy groceries that way?

7. Fund drug research with federal tax dollars awarded through competitively bid R&D research contracts; once drugs are discovered and developed, produce and sell drugs at the cost of competitive production (a few cents per dose, typically).

8. Individuals who have income or wealth below a prescribed standard would have their base health care policy purchased for them from tax dollars. This would require a "means" test, of course, just like food stamps do.

Of course, once we move away from the principle of voluntary exchange, we won't find a better way for society to address the economic problem: how to satisfy virtually unlimited human wants using scarce resources in a social context. Any proposal other than voluntary exchange will have undesirable features.

So, my short list isn't a panacea. But the ideas I offer here whip the pants off what the Dems have come up with. That's because what I've proposed tries to preserve as much human liberty, dignity, and responsibility for self as possible, given the constraint that we've decided we can't stand to see people doing without health care.

The Dems, on the other hand, don't seem to be interested in liberty, dignity, and self sufficiency of most people. They appear to be mostly interested in turning everyone into a ward of the state --- which they, of course, expect to run.

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