A False Choice on Healthcare

Because the status is not quo. The world is a mess and I just . . . need to rule it.
— Dr. Horrible, Dr. Horrible’s Sing-Along Blog

President Obama would like us all to believe that there are only two choices on healthcare: his plan and the current situation. In fact, he beats this straw man up whenever possible.

His position is that if you are against his plan, then you must be in support of the current system. This is incorrect. One can, in fact, be against Obama’s plan and the current plan.

Personally, I’d like to see something that truly brings more competition to the health care system. What we have now is a bastardized combination of large, for-profit corporations working with the government through regulatory capture and out-right collusion. The result is a system with very little actual competition.

There are numerous reforms that actually would increase competition in health care. Some of these include:

Correct the tax inequality in purchasing health insurance
Currently, a company that purchases health insurance for its employees is able to deduct that cost from its income for tax purposes. Meanwhile, an individual purchasing insurance must do so with post-tax funds.

This provides a huge advantage to purchasing insurance through an employer, and has lead to the current situation where having insurance tends to be tied to employment. Consequently, most people lose their insurance when they leave their job (whether voluntarily or involuntarily).

Some are talking about taxing all health care benefits like income. While that would be an improvement over the current situation, I’d rather that individuals received a standard deduction or tax credit if they purchased their own insurance.

Allow health insurance to be purchased across state lines
There are about 1,300 insurance companies in the United States, but in many areas, there are only four or five real choices. Many states have draconian regulations that increase costs substantially. Allowing individuals to purchase health insurance from other states would greatly increase choice and competition, and would drive down costs.

I’ve heard some suggest that this tramples on state sovereignty, but this can be addressed through the interstate commerce clause. It’s certainly makes more sense than most of the times the SCotUS invokes it.

Increase competition among medical practitioners
Many procedures that today can only be provided by medical doctors could safely and more cost effectively be provided by physician’s assistants, nurse practitioners, and/or midwives. The degree to which non-physician medical practitioners varies greatly by state, but increasing the scope of procedures they can perform throughout the country would certainly lower costs.

In addition, doctors should be allowed to more easily move their medical licenses from state to state. In some cases, it’s already quite easy, but other states (Texas, for instance) make if very difficult to acquire a license.

Turn Medicare and Medicaid into voucher programs
Instead of the current system, enrollees should be given a voucher that allows them to choose their own health plan. If they choose an economical plan, allow them to keep the savings. The amount of the voucher could be based upon need.

Crack the AMA’s monopoly on CPT codes
Current Procedural Terminology (CPT) is a coding system developed and maintained by the American Medical Association, who will sue anyone who attempts to publish data on the codes publicly. The AMA earns about $70 million annually from the licensing of these codes. In fact, the AMA makes more from CPT licensing than it does on membership fees from the doctors it supposedly represents.

The public distribution of CPT code data would allow much cleaner comparisons by consumers between plans, allowing more intelligent choices to be made.

Apply anti-trust laws to insurance company price demands
As a monolithic unit, insurance companies insist that they pay the lowest fees for procedures. As a result, someone who wishes to pay cash up front for a service, pays a higher rate than one that pays via insurance reimbursement (for the same service and using the same provider).

Logically, someone who is willing to self-pay should receive the lowest fee.

These measures, taken together, would result in increased competition, lowered costs, and improved outcomes throughout the U.S. healthcare system.

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