Problems with health care in America are
not failures of voluntary market exchange; they are failures of government
interference with voluntary market exchange. To fix the problems, eliminate
government interference with voluntary exchange in health care markets.
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1. Eliminate involvement of employers in health care altogether;
do this simply by removing from federal and state tax codes all tax
implications of health care goods and services, for both businesses and
individuals. Remove all tax deductions, tax credits, and tax preferences of any
kind that involve health care services or health insurance premiums; remove all
interactions between health care and the tax code.
2. Eliminate supply-side restrictions on health care.
a. Rely entirely on private voluntary exchange on the
supply side of health care markets.
b. Eliminate barriers to entry for hospitals, clinics, dental
schools, nurse training schools, and medical schools, including
"certificates of need," and government imposed restrictions on health
care training organizations.
c. Eliminate municipal, tax financed,
government-subsidized, tax advantaged hospitals and clinics.
d. Allow consumers to decide what levels of health care
training are sufficient for their health care needs.
i.
Eliminate legal restrictions
on health care providers at all levels.
ii.
Eliminate government
licensure requirements for all levels of health care providers
iii.
Promote private certification,
like we see for Certified Public Accountants (CPA), Certified Financial
Planners (CFP), and Civil Engineering Certification (CEC). Neither federal nor
state governments would play a role in certification.
e. Rely on wide-spread information dissemination about
individual health care providers, hospitals, and clinics — similar to
nutritional content on food packages, Yelp for restaurant reviews, and Consumer
Reports for goods and services.
f. Eliminate 3rd party payer models that have
removed price competition from health care.
g. Eliminate Medicare, Medicaid, Veterans Administration hospitals,
and all other health care programs run by government.
3. Eliminate state boundaries for health insurance; allow
nationwide competition for whatever health care insurance markets emerge.
Eliminate restrictions of any kind on pricing and characteristics of health
insurance products.
4. Give low-income individuals and families means-tested
health care vouchers to purchase routine health care, similar to the SNAP
program. Pay for vouchers from general tax revenue.
5. Eliminate patents for pharmaceuticals. Rely on
academic research to develop new drugs, as we largely already do. Academic
research is highly motivated by institutional prestige, not sales of drugs. We
have no evidence whatsoever that eliminating patents on drugs would reduce
research and production for new efficacious drugs in America, notwithstanding
loud protests to the contrary from the rent-seeking big pharma corporations.
Implementing the 5-point plan outlined
above will lead to the following benefits for people in America:
A. Creation of market prices in health care. As noted by
professor Alex Tabarrok, of George Mason University, a market price is "a
signal wrapped up in an incentive" for both producers and consumers.
Without market prices, producers and consumers have no way to maximize economic
efficiency.
B. Reduction in the cost of health care across the board,
due to increased supply and reduced demand for health care services.
C. Increased supply of health care services, due to
removing supply-side restrictions put in place by government operatives who
have catered to rent-seeking health care providers.
D. Greatly reduced wait times in doctors’ offices and
hospital emergency rooms, as health care providers begin competing on price and
quality of service.
E. Much greater diversification of health care delivery
models, such as online diagnosis and service, walk in lab testing, online
diagnosis services, quick-service health care clinics, and other business
models that no one has yet even imagined (http://reason.com/archives/2014/09/30/supply-side-health-care-reform
).
F. Greatly reduced cost for routine health care services
that providers with much less training than an MD can provide with great
competence.
G. Lowest feasible cost for health care services across
the full range of health care services.
H. The absence of government and its operatives from
health care markets, thereby improving economic efficiency and equity across
the board.
I. Elimination of the deadweight costs created by
subsidies, price controls, and supply-side restrictions. A greater number of
people will receive a greater quantity of health care with a higher quality and
benefit to individuals, at the lowest possible cost.
