Consumer Centered Healthcare

by Michael Cloud

Imagine that the federal and state governments imposed laws, regulations, restrictions, and mandates on medical care that drastically increased the cost – without improving medical care.

What if it were possible to cut your medical care costs by 20% or 30% or even 50% now – while keeping current levels of quality and service – by repealing and removing these government-created burdens and barriers?

If this were possible, would you want it?

Would you want the U.S. Congress to repeal and remove these laws, regulations, restrictions, and mandates?

Would you want your state legislature to do the same?

Yes? Well, these government-imposed burdens and barriers DO exist – and your federal and state legislators CAN repeal and remove them.

Would you like to see a small sample?

1. Allow price advertising. Let pharmacies, doctors, hospitals, and laboratories to publish their prices for goods and services. Eliminate all laws, regulations, and government provisions that hinder or prevent medical providers from posting their prices.

Charges for the same medical procedure can vary 30% to 300% within a 100-mile radius. But without price information, patients can’t shop for the best value.

In the 1970’s, U.C.L.A. Economist Sam Peltzman compared the costs of eyeglasses in states that allowed price advertising and states that outlawed it. Results? Much lower prices in states that allowed price advertising.

2. Let all Americans buy prescription drugs outside the United States. Do NOT force them to travel abroad. Allow them to have the prescription drugs shipped to their homes.

I’ve seen the 30% to 60% savings in prices of prescription drugs purchased in Mexico.

International competition for prescription drugs will drive down domestic prescription prices.

3. Let all people buy medical insurance across state lines. In New Jersey, a single man would pay $4,000 for medical insurance. If he lived in Pennsylvania, he’d pay $1,500. If the New Jersey man could buy medical insurance from a Pennsylvania provider, he’d save $2,500 a year.

Imagine this all across America.

This would cut medical insurance costs for millions who already have needlessly overpriced premiums.

AND, if the American Enterprise Institute study is correct, this would make medical insurance affordable for 12 million uninsured Americans.

4. Let doctors and patients negotiate discounts for paying cash. If a patient saves a doctor the time, trouble, delay and cost of dealing with insurance companies, Medicare, or Medicaid – let the doctor and patient share the savings.

5. Let patients, doctors, and hospitals enter into into legally binding, limited-liability contracts. This would reduce the cost of medical treatment by reducing the cost of malpractice insurance.

Just as Prenuptial Agreements limit marital risk, limited-liability contracts will limit medical risk.

6. End all government mandates that require businesses or individuals to buy medical insurance. End all government mandates that punish and tax those who do NOT buy medical insurance. Make insurance companies earn our business with lower prices and better quality – rather than lobby government to compel us to buy medical insurance by force of law. (See Carla Howell’s excellent essay below.)

This is just a sketch of small government proposals to UN-do the government-caused high prices of medical care.

A glimpse of small government proposals to come.

Tags: cutting health care costs

This entry was posted on Wednesday, August 19th, 2009 at 12:07 pm and is filed under Center for Small Government. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.