October 1, 2007

WHY NOT HEALTH CARE TOO?:

Health savings accounts would boost patients’ choice (E. THOMAS McCLANAHAN, 9/29/07, Kansas City Star)

Some time back, the driver’s-side door of our family car got in an argument with a parking-garage pillar. I found a body shop to fix it and my insurance company paid the shop, less the deductible.

More frequently, an insurance company will issue a check directly to the policyholder. But in either case, the policyholder decides who’s going to fix what’s broken.

Here’s a thought: Why doesn’t health insurance work that way?

That’s what John Goodman, president of the Dallas-based National Center for Policy Analysis is asking.

Goodman, who has written widely on health-care reform, points out that if health insurance operated like auto or homeowner insurance, consumers would gain the buying power needed to create competition in medical services.

It wouldn’t take long for Web sites to pop up, rating hospitals and clinics, and providing pricing information — just as travel sites rate hotels. Soon, providers who delivered poor service would confront the dilemma faced by every struggling business: change or die.

MORE:
Health Insurance and General Motors (Ross Kaminsky, 10/01/2007, human Events)

There is a political lesson here as well, though not one I expect to be easily learned: GM’s long-standing paternalistic approach led to out-of-control increases in costs which nearly bankrupted the company, risking the jobs, pensions, and health care of its workers and retirees. Yet this is precisely the system that is offered by HillaryCare and other Democratic plans to socialize American medicine.

The VEBA trust will be owned by GM’s retirees. That sense of ownership will give them reason to be diligent in how they spend those resources, reducing demand pressure on the health care system and lowering the rate of increase in health care costs. That direct connection between the consumer and the service consumed is precisely what is created by Health Savings Accounts, high-deductible insurance plans, and co-pays of more than the price of lunch. It is these discipline-creating policies which offer the most likely solution to current problems in our health care system (which, despite media cries, is not in crisis).

The realization by both General Motors and its workers that their current system is unsustainable and that a solution is to be found in increasing individual responsibility should be as loud a message to voters as it undoubtedly is to industry. As the old saw goes, if you think medical care is expensive now, just wait until you see how much it costs when it’s free.

Posted by Orrin Judd at October 1, 2007 12:00 AM
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