Arnold Kling says the answer is health care vouchers. He and several other experts, some of whom don’t seem to know much about economics (health care or otherwise), provide their ideas to the NYT. Kling explains his as follows:
The key to containing health care costs is to reduce spending on medical procedures that have high costs and low benefits. In order to do that, you have to increase the share of spending that is paid for by patients and reduce the share that is paid for by third parties, so that consumers will think twice about high-cost, low-value procedures.
For example?
If you hurt your back and your doctor recommends an MRI, today the only question you ask is whether your insurance will pay for it. If you were responsible for half of the cost or more, you would ask whether the MRI is likely to turn up anything that will affect the treatment plan.
OK. Go on.
For government programs, that means using vouchers rather than fee-for-service reimbursements. Vouchers would work like food stamps, except that they can be used to pay for medical procedures or to buy health insurance. Using vouchers instead of reimbursement would make government’s health care costs controllable rather than open-ended.
How would they be distributed?
Government subsidies to individuals should be in the form of vouchers that are based on need. Need should reflect income and pre-existing conditions. Poor families would receive thousands of dollars in vouchers. People with expensive conditions also would receive thousands of dollars in vouchers. Healthy, affluent people would get much less.
This would, of course, require people to make their own health care decisions, and our masters in Washington aren’t going to put up with that. So, as Kling himself puts it at his blog, his idea has no chance of becoming law:
My proposal has zero chance of being enacted … The other pundits’ proposals, even if they were enacted, have zero chance of having a real impact on health care costs.
Such is the nature of our health care reform debate.
Comments 1
The same thing could be accomplished by banning or taxing Cadillac coverage. The traditional private insurance 80/20 split worked great for along time to put a break on costs.
Posted 14 Nov 2009 at 10:31 am ¶But then you didn’t have the doctor recommending the MRI owning a piece of the imaging center and getting the juice from that business. Most people don’t know enough to ask the doctor if the MRI is needed anyway. That doctor conflict of interest needs to banded also. So you see it’s a little more complex that vouchers.
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