Nobel Economist Gary Becker in the WSJ: Drafting A Good Health Care Bill Would Have Been Easy
"The health care legislation is a bad bill. Health care in the United States is pretty good, but it does have a number of weaknesses and this bill doesn't address them. It adds taxation and regulation. It's going to increase health costs—not contain them.Drafting a good health care bill would have been easy. Health savings accounts could have been expanded. Consumers could have been permitted to purchase insurance across state lines, which would have increased competition among insurers. The tax deductibility of health-care spending could have been extended from employers to individuals, giving the same tax treatment to all consumers. And incentives could have been put in place to prompt consumers to pay a larger portion of their health-care costs out of their own pockets.
Here in the United States we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending (see chart above). In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that."
~Nobel economist Gary Becker in the WSJ
7 Comments:
And, all of this: basic economics, which a vast majority of "top tier" economists just don't seem to get.
Nobel Economist Gary Becker in the WSJ: Drafting A Good Health Care Bill Would Have Been Easy
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And in eight yeares George W. Bush and the Republican congress did nothing toward this goal.
I heard Bob Brinker on the radio say it isn't a health care bill, it's a massive entitlement bill to expand the democratic base. Also, he said, in 1965, the CBO projected Medicare would cost $60 billion in 2010. The CBO was off by a factor of eight. Medicare is expected to cost $480 billion in 2010. The current health care bill may cost trillions of dollars more than projected.
Moreover, Brinker said it's most difficult, if not impossible, to repeal entitlement programs once enacted. It seems, the only way to repeal entitlements, enacted since the 1930s, is if the GOP wins 60 Senate seats, the House, and the White House, which it hasn't done since 1921.
"I heard Bob Brinker on the radio say it isn't a health care bill, it's a massive entitlement bill to expand the democratic base"...
Sen. Max Baucus admits as much...
This is based on the false premise that "health care reform" is about reforming health care. We have enough experience now to know the gov't is not in the business of solving problems; they are in the business of created more problems so they'll have something to sell future voters. Haven't we all learned that "environmental protection" legislation has absolutely nothing to do with protecting the environment. It's time we wake up and stop equating intentions with results!
Remember: these expenditures are actually hidden, secret, agreed-to values for services that you, as the consumer, are not involved in.
The secret cabal of health care providers and insurance companies make sure that these numbers have as little meaning as possible in any frank economic discussion. And you cannot make considered purchasing choices in such an environment.
All of this is not about making people feel better or healing folks: It is about expanding control of almost 20% of our economy.
Frank said...
... And in eight yeares George W. Bush and the Republican congress did nothing toward this goal.
..
Oh please. When exactly was that huge crisis that made "reform" such a high priority? Show me all the polls or media stories saying it was a crisis any time until it came up in the campaign.
There were many reform measures offered such as medical tort reform. The media never followed those stories.
Here's one that Senator Obama chose not to vote on:
http://projects.washingtonpost.com/congress/110/senate/1/votes/422/
Here's some no votes:
Allows a tax deduction for those buying health insurance outside a workplace.
http://projects.washingtonpost.com/congress/110/senate/2/votes/82/
http://projects.washingtonpost.com/congress/110/senate/1/votes/26/
Plus, the Medicare Modernization Act of 2003 created pretax Health Savings Accounts which must be coupled with a high deductible insurance plan. These of course were somewhat gutted by the "reform" just passed.
That HSA combination is a great solution and is the best health plan I've ever had. It helped Whole Foods LOWER their health costs at a time when regular insurance costs were rising.
Interviews with John Mackey, CEO of Whole Foods.
http://www.youtube.com/watch?v=Xsp_Jh5EIT0
http://www.youtube.com/watch?v=8UuCL3cxYaY
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