In a highly partisan political act, President Obama and a Democrat-dominated Congress established the Affordable Care Act (ACA) in 2010. The law aimed first and foremost to reduce the uninsured population. It did so by expanding government insurance programs and regulatory authority over U.S. health care via new mandates, regulations, and taxes. The two major elements of the law—a significant Medicaid expansion for non-disabled adults and subsidies for exchange-based private insurance—will each be funded with almost $1 trillion of taxpayer money over a decade, according to January 2017 CBO analysis. Just as the ACA’s supporters passed it despite the widely anticipated failures of the law, advocates of a single payer system today ignore the well-documented half century of failures of nationalized health care.
The harmful impacts of this ill-conceived approach are now well documented: Insurance premiums have skyrocketed; many insurers have withdrawn from the state marketplaces; and for those with coverage, doctor and hospital choices have narrowed dramatically. The ACA will also undoubtedly accelerate the development of the kind of two-tiered health care system characteristic of other nationalized systems, where people with money or power are able to circumvent the substandard government systems that the lower classes must endure. The result will be an end to the superior access, broad freedom of choice, and exceptional quality of care that distinguishes American health care from the centralized systems that are failing the world over.
Time is running out to fix these problems. Yet politicians on both sides of the aisle continue to erroneously focus on increasing the ranks of the insured as the primary goal for health policy. To be sure, this helps politicians appear to be doing something good for voters, while in reality this is misguided, and at times counterproductive to the goals of correct health policy.
We already know that categorizing someone as “insured” is not the same thing as facilitating timely, high quality health care. America’s veterans, after all, are “universally insured,” but the disgraceful failures of that particular single-payer system are now obvious (and ironically are being remedied by allowing care outside that system). Should we pretend we have cause to celebrate our government-centralized Medicaid program for the poor, even though only half of doctors accept patients under that system (not to mention that HHS’s own data reveal that half of all doctors who have signed up to accept Medicaid patients do not actually do so)? Should we deny that Medicaid’s universal insurance delivers worse outcomes—including more in-hospital deaths and adverse events, more complications from surgery, shorter survival after treatment, and longer hospital stays—than private insurance covering medically similar patients?
Shouldn’t we also examine the actual data from nationalized systems with universal insurance? In those countries with the longest experience of guaranteed insurance, epitomized by the UK’s National Health Service, their “fully insured” patients have far worse access to care and worse outcomes than did Americans before the ACA. Published data demonstrates massive waiting lists and unconscionable delays in the NHS that are unheard of in the United States, including for even the sickest patients, like those referred by doctors for “urgent treatment” for already diagnosed cancer (18 percent wait more than two months) and recommended brain surgery (17 percent wait more than four months).
U.S. media outrage was widespread when 2009 data showed that time-to-appointment for Americans averaged 20.5 days for five specialties. That selective reporting failed to note that those waits were for healthy check-ups in almost all cases, by definition the lowest medical priority, and were actually significantly shorter than for seriously ill patients in universal insurance systems, including Brits needing heart surgery (57 days), or Canadians with “probable cancer” of the gastrointestinal tract (26 days) or proven GI bleeding (71 days). Even for physical exams and purely elective, routine appointments, U.S. wait times before ObamaCare were shorter than for seriously ill patients in countries with nationalized insurance. Patients in those systems, despite their universal insurance, also experience delayed access compared to Americans for important medications. To no one’s surprise, the consequences are factually worse outcomes from virtually all serious diseases, including cancer, heart disease, stroke, high blood pressure, and diabetes compared to Americans. Contrary to the logic of those advocating for government-sponsored, single-payer health care for America, and despite the intuitive attractiveness of the concept, having insurance is absolutely not synonymous with having access to quality medical care.
More fundamentally, the truth is that costly health insurance premiums are largely a secondary manifestation of other factors, chiefly the cost of medical care and, to a lesser extent, the regulatory environment for insurance. While emerging GOP proposals rightfully strip back some of the ACA’s harmful regulations and taxes, reducing the cost of health care itself is the critical pathway to more affordable, broader access to quality medical care, lower insurance premiums, and ultimately better health. By ignoring the root problem and instead continuing to focus on making current insurance “more affordable,” mainly through subsidies to consumers, such policies artificially further the misguided incentives in our current system. Subsidies prop up insurance premiums for coverage that typically reduces out-of-pocket payment and covers care that many people would never choose to buy. This prevents patients from caring about price of the care covered by insurance, and it consequently eliminates the incentives for medical care providers to compete on price.
Lowering the cost of medical care, though, is fraught with peril. It must be achieved without harming patients: without jeopardizing quality, restricting access, or inhibiting the critical innovation dynamic within American medical care. But it can be done; read on and you will learn how.
The Urgency of Reform
Health care reform cannot wait, despite the excellence of American medical care. America is facing its greatest health care challenges in history, as enormous fiscal stresses combine with daunting demographic realities that threaten to overwhelm the system unless it changes fundamentally from the dysfunctional mess it has gotten itself into.
Partly due to features and regulations of the Affordable Care Act (ACA), such as the significant expansion of Medicaid for adults and substantial subsidies for exchange-based private coverage, health care financing has shifted further toward the government. According to CMS, the government-paid share of health spending (Federal, state, and local) accounted for 45.8 percent of all health spending in 2015, dwarfing both the 27.7 percent share of spending by households and the 19.9 percent by private business as the largest single source of funding. Medicaid, originally a program with only about 250,000 low-income beneficiaries at a cost of less than $1 billion in 1966, has expanded to cover over 74 million people; program costs totaled $574.2 billion in FY 2016, about 60 percent of which comes from Federal taxes. Medicare spent less than $1 billion in its first year of existence on hospital benefits for seniors, but today it spends over $191 billion annually on hospital benefits alone and $679 billion in total. As the Medicare beneficiary population explodes with the aging of the baby boomers, the growing costs of the program in its current form seem unsustainable when one understands that in 1965, at the start of Medicare, workers paying taxes for the program numbered 4.6 per beneficiary, whereas that number will decline to 2.4 in 2030. The latest Annual Medicare Trustees report also projects that the Hospitalization Insurance (HI) trust fund will face depletion in 2029.
Adding to its fiscal fragility, the Medicare program is fraught with errors, fraud, and waste to the tune of $60 billion per year, according to the Government Accountability Office. Even before any trust fund depletion, Medicare and Medicaid must compete with other spending in the Federal budget. America’s national health expenditures (NHE) now total over $3.2 trillion per year, or over 17.8 percent of GDP, and are projected to reach 19.9 percent GDP by 2025. Without changes, Federal expenditures for health care and social security project will consume all federal revenues by 2049, eliminating capacity for national defense, interest on the debt, or any other domestic program.
Beyond the dismal projections about the fiscal burden of taxpayer-funded health care is the impending explosion of demand for costly medical care our society faces. The Department of Health and Humans Services’ Administration on Aging and the U.S. Census Bureau document that the number of Americans 65 and older has exploded by a full six million in the past decade alone, while the population of “oldest old”—those 85 and older—has increased by a factor of ten from only 500,000 in the 1950s to today’s six million. The positive implications of lengthening lifespans are not as simple as one might initially suppose. Older people harbor the most disabling diseases, including heart disease, cancer, stroke, and dementia—the diseases that depend most on specialist care, complex technology, and novel drugs for diagnosis and treatment. Alzheimer’s Disease alone already affects over five million Americans, and in 2050, nearly 15 million will have it, including one in three elderly Americans. In 2050, the direct financial burden shouldered by Americans from Alzheimer’s projects to exceed $1 trillion, with over $750 billion expected from Medicare and Medicaid in that single year.
Simultaneously, obesity, America’s most serious self-inflicted health problem, has increased to crisis levels in both adults and children. Because of obesity’s high prevalence and its proven association with multiple chronic diseases, worse treatment results, and more complications from even the best medical care, Hammond and Levine calculate that the annual U.S. societal costs of obesity now exceed $215 billion. Given the documented lag time for such risk factors to fully affect health, the totality of obesity’s cumulative health and economic harms will dramatically increase over the next several decades.
As policymakers grapple with these formidable challenges, Americans are entering a truly remarkable era of medical diagnosis and therapy. Innovative clinical applications of molecular biology, advanced medical technologies, new drug discoveries, and minimally invasive treatments promise earlier, more accurate diagnoses and safer, more effective cures. The possibilities of improving health through medical advances have never been greater. Yet such extraordinary technologies are undeniably costly to develop in both time and money. Any changes to U.S. health care must be done with care, specifically avoiding significant harm to the incentives for continued innovation, if America’s next generations are to continue to benefit from such extraordinary advances.
The Pathway to Lower Cost, Quality Health Care
The central principle of successful health care reform lies in reducing the cost of medical care without restricting care or creating obstacles to innovation. This objective is fundamental, although it is partly intertwined with other necessary changes to insurance regulations and taxes that have undeniably hurt consumers. The way to bring down health care prices without damaging quality and without limiting access is the question, but the answer is clear-cut. It requires creating conditions long proven to bring down prices while improving quality: facilitating competition among providers, and incentivizing consumers to seek value.
Incentivize and Equip Consumers to Consider Price and Seek Value
First and foremost, consumers must have strong incentives to consider price when seeking medical care, and they must have the tools to do so. This is obviously critical for generating consumer value in any good or service, yet incentives to consider price are uniquely missing from the health care system. Although begun decades ago, the ACA furthered the inappropriate construct that insurance should minimize out-of-pocket payment and subsidize all medical care. The ACA’s broad coverage requirements directly caused more widespread adoption of bloated insurance. This further shielded patients from paying directly for health care. With patients having virtually no incentive to consider value, and when health care prices and doctor qualifications are essentially invisible, providers don’t need to compete on price. The consequences are the overuse and misuse of health care resources and unrestrained costs.
For consumers to incorporate price and value into decisions to buy health care, the system must first give consumers an expanded role in paying directly for care. Beyond paying directly, they also must personally gain from paying less. That new, value-seeking behavior is the essential lever to force competition among health care providers.
But is it realistic to suggest that people could shop for medical care and consider price, as Americans do for virtually every other good and service? Aside from emergency care, which represents only 6 percent of health care expenditures, the answer is a resounding yes. Among privately insured adults under age 65, almost 60 percent of all health expenditures is for elective outpatient care; only 20 percent is spent on inpatient care and 21 percent on medications. Likewise, 60 percent of Medicaid money is spent for outpatient care. Even in the elderly, almost 40 percent of expenses are for outpatient care. Of the top 1 percent of spenders, the group responsible for more than 25 percent of all health spending at an average of $100,000 per person per year, a full 45 percent of spending is also outpatient. Outpatient health care services dominate America’s health spending, and these services are absolutely amenable to value- and price-based decisions.
Widely available higher deductible insurance plans (HDHPs) are one critical piece of the puzzle to position more patients as direct payers for a higher proportion of their medical care. Higher deductibles necessitate direct patient payment for care up to the deductible. Moreover, high deductibles restore the fundamental true purpose of health insurance: to reduce the financial risk of large and unanticipated medical expenses. Instead, under the misguided assertion of then HHS Secretary Sibelius who claimed that high-deductible coverage is not true insurance, the ACA furthered the flawed model that insurance should minimize out-of-pocket payment and cover the entire range of medical services, including lower cost routine and elective care.
A second highly effective tool to motivate and enable patients to seek value and consider price is large, liberalized health savings accounts (HSAs). These accounts are tax-sheltered as they grow by contribution or investment. They are generally used to pay for non-catastrophic health expenses, which form the bulk of medical care. Better than tax deductions that reduce net cash outflow for a given medical expense but ultimately motivate more spending on health care, HSAs introduce something unique—they incentivize saving.
Large HSAs are not a panacea, but when coupled with higher deductible coverage, they are proven to effectively motivate patients to consider price in their health purchases. We know that health spending of those with HDHPs paired with HSAs decreased at least 15 percent annually in a March 2015 study. When people have savings to protect in HSAs, the cost of care comes down without harmful impact on health. More than one-third of the savings by enrollees in such coverage reflected value-based decision-making by consumers, i.e. prices matter. System-wide health expenditures would fall by an estimated $57 billion per year if even half of Americans with employer-sponsored insurance enrolled in plans combining HSAs with high deductibles.
The issue is not whether these vehicles are effective; it is how to maximize their adoption and eliminate the government rules that serve as obstacles to their growing to scale.
First, it is essential to permit limited-mandate, high-deductible plans in every state and for every consumer. By empowering all health care consumers, including the elderly and other high-frequency users of medical care, with the same tools and incentives to seek value for their money, price-conscious behavior will become more fully leveraged.
HDHPs should be made as attractive as possible for all those who might consider such coverage, if their impact on lowering costs is to be maximized. HDHP premiums are generally less expensive, but regulations have counterproductively limited their availability and raised their premiums. Based on my analysis of Employer Health Benefits Annual Survey data from the Kaiser Family Foundation, the premiums for HDHPs rose from two to five times faster than premium increases of any other type of coverage after ACA passage. Excess mandated coverage that made HDHP insurance less attractive should be rolled back, including Obamacare’s “essential benefits” that increased premiums by almost 10 percent, and the 2,270 state coverage mandates for everything from acupuncture to marriage therapy. To make HDHP coverage even more affordable, we should remove the 3:1 ACA age rating that raised premiums for younger enrollees by 19-35 percent, many of whom would consider low-premium, HDHP coverage.
Second and at the same time, HSAs should be reconfigured to permit broader use and more impact on prices. HSAs should be automatically opened for every citizen with a social security number or at birth, and owned by individuals rather than be tied to employers. HSAs should be available to all Americans, including seniors on Medicare. Given that seniors are the biggest users of health care, motivating them to seek value is crucial to driving prices lower.
Moreover, life expectancy from age 65 has increased by 25 percent to 19.1 years since 1972; today’s seniors need to save for decades of future health care. Raising maximums and catch-up contributions at least to those of IRA limits is one obvious step, but more deregulation should also occur. We should eliminate the counterproductive, arbitrary requirement of owning coverage with government-defined deductibles to open an HSA. HSA payments should be allowed for the health expenses of the holder’s elderly parents. To further the incentive to contribute to HSAs without risk of forfeiture on death, permitting rollovers to surviving family members is a step to take immediately. We should also remove ACA-specified limits to financial incentives from employers, including deposits into employee HSAs, as powerful motivators for employees to participate in wellness programs proven to reduce health costs and improve health.
Third, it is obvious that the visibility of information that patients require for assessing value must be radically improved for patients to be capable of assessing value. Data from magnetic resonance imaging (MRI) and outpatient surgery show that introducing price transparency encourages price comparisons by patients. Given the tools, consumers make value-based decisions when purchasing health care. It goes without saying that consumers must know the prices of medical care before any decision is made to buy it. Indeed, it is virtually unimaginable that anyone would buy something without knowing its cost…unless they thought someone else was paying, which is the perception in typical health insurance.
Likewise, patients must be readily aware of some straightforward indicators of relative quality, such as doctor qualifications and experience. Although one might be tempted to insist on new regulations to force price transparency, such laws are uncommon and perhaps unnecessary. Clearly, the demand for price information to inform their decisions will grow as consumers take on a more direct role in paying for their care through high deductible coverage and HSAs. The most compelling motivation for doctors and hospitals to post prices would be their understanding that they are suddenly competing for price-conscious patients empowered with control of the money.
Reform the Tax Code
The tax code must play an important role in realigning consumer incentives to put downward pressure on medical prices. One clear caveat is to avoid interposing misincentives that counterproductively encourage higher spending, particularly for insurance that minimizes out of pocket spending. We need look no further than the income exclusion for unlimited health spending to find one of the great mistakes of U.S. tax policy, costing approximately $250 billion in 2013, according to the CBO; 85 percent of the subsidy goes to the top one-half of earners. Beyond the numbers, the tax exclusion created perverse incentives. It encouraged higher demand for care, regardless of cost, while distorting insurance into covering almost all services, greatly increasing health care costs. Rational tax reform should limit eligibility for tax exclusions to HSA contributions and high deductible catastrophic coverage premiums – why incentivize broad coverage that eliminates incentives to care about price? If health care deductions or exclusions are maintained, they should be universal, regardless of employment status, to level the playing field. Additionally, limits on health deductions should be set, for example, to the maximum allowable HSA contribution.
Importantly, any plan for cash subsidies for low deductible, broad coverage to consumers other than for the poor should be eliminated. Such subsidies not only ignore the root problems of high medical care prices and overregulation, but they also disincentivize competition among providers. Insurance premium subsidies like the tax credits proposed by the House and the Senate artificially prop up high insurance premiums for bloated coverage that minimizes out-of-pocket payment. This prevents patients from caring about price and value of the care covered by insurance, and thereby eliminates the incentives for doctors and hospitals to compete on price. Moreover, tax credits would create yet another government entitlement, at a time when entitlement reform in the opposite direction is already urgent. Tax credits further complicate a monstrously complex tax code. Tax credits further expand the far-too-dominant IRS’s mission from collecting revenues to doling out money to favorite economic activities. Moreover, we must know by now that entitlement costs, including health care entitlements, always—always—expand far beyond projections.
Increase the Supply of Medical Care and Stimulate Competition
Even if buyers have control of the money and an incentive to save money on their purchases, there must also be sufficient supply and availability of alternatives (in this case, health care providers) to establish a competitive environment. The supply of medical care must be significantly yet strategically increased, so consumers can impose their power as they seek out the best value for their money without diminishing the world-leading quality of American doctors, technology, and drugs. Simultaneously, archaic obstacles to competition among medical care providers must be eliminated.
Private sector clinics staffed by nurse practitioners and physician assistants can provide much of routine primary care, including flu shots, blood pressure monitoring, dispensing common drugs, and other relatively straightforward care. In a 2011 review, 88 percent of visits to retail clinics involved relatively simple care, 30-40 percent cheaper than at physician offices and about 80 percent cheaper than at emergency departments. Patients report high levels of satisfaction with their care at these clinics, which can potentially save hundreds of millions of dollars per year, according to some projections, while increasing neighborhood access. To propagate such clinics, we need to eliminate government and special interest obstacles and simplify credentialing requirements for their reimbursement. In addition, states should remove outmoded scope-of-practice limits on qualified nurse practitioners and physician assistants.
Increasing provider supply is not only essential in primary care. Although less publicized, almost two-thirds of the 2025 projected doctor shortage of 124,000 will be in specialists, not primary care. Nearly all patients with serious diseases today are cared for by specialists, because specialists have the necessary expertise to use today’s complex diagnostics, procedures, and treatments. It remains extraordinarily difficult for residency training programs to increase the number of their trainees, even when paying fully for the additional residency positions. Medical specialty societies that set restrictive quotas harm consumers by artificially limiting the supply of doctors and consequently restricting competition among doctors. States should also modernize physician licensing by considering a national license. Non-reciprocal licensing by states unnecessarily limits patient care, especially as interstate telemedicine proliferates.
Now is also the time to reconsider practices that limit overall physician supply for the next generation. It would be wise to encourage streamlined doctor training, such as already initiated at NYU, Texas Tech, and other medical schools. Even before considering new training models, we need to look at medical school graduation numbers. These have stagnated for almost 40 years and protectionist residency restrictions have been in place for decades. These longstanding anti-consumer practices of medical schools and training programs should at least be opened to public scrutiny, even without imposing overt regulatory oversight by non-expert government bureaucrats.
In addition to increasing the doctor supply, we should eradicate barriers to medical services that impede competition and therefore raise prices. Although originally intended to “restrain health care facility costs and facilitate coordinated planning of new services and facility construction”, the federal government first, and subsequently the states, set up certificate-of-need (CON) requirements that limit important diagnostic equipment and other health care services. This inhibits competition, raises costs, and ultimately hurts patients. CON regulations are just another example of archaic bureaucratic overregulation with unintended consequences, and are still in place in 34 states, Puerto Rico, the U.S. Virgin Islands, and the District of Columbia.
Many politicians, including both Democrats and Republicans, have called for price caps on drugs, a notion popular with many voters in the wake of several highly visible cases of price gouging, as well as inflammatory comments by pharma CEO Martin Shkreli and others. We already know from history, however, that price caps don’t provide the desired products at lower prices; instead, caps always restrict the availability of the product. Drugs are no different. Cockburn used data on launches of 642 new drugs in 76 countries to show that price regulation strongly delays drug launches. Abbott has shown that pharmaceutical price controls significantly diminish the incentives to undertake early-stage R&D investment. In that study, cutting prices by 40 to 50 percent in the United States will lead to 30 to 60 percent fewer early-stage R&D projects. And Santerre calculated that drug price controls would have led to 198 fewer new drugs being brought to the U.S. market from 1981 to 2000—at a societal cost to Americans of about $100 billion more than the estimated consumer savings from those drug price controls. In other words, even in financial terms alone, the benefits of encouraging new drug development vastly outweigh the putative cost savings of price controls.
To reduce drug prices, many leading Democrats have called for expanding the negotiating power of the Federal government through Medicare. In doing so they are disregarding established facts and ignoring decades of experience from other countries like the UK, Canada, and Sweden on how government-dominated drug pricing has harmed patients. Indeed, Sweden finally privatized their pharmacies after decades of government ownership in response to severe problems with drug availability. Despite already delayed access to drugs, NHS England introduced a new “Budget Impact Test” earlier this year to cap drug prices in order to further restrict drug access, even though doing so will break their own NHS Constitution pledges to their citizens. In the same way, if a buyer is as dominant as is Medicare, essentially a monopsony, price negotiation might reduce prices, but only at the expense of other baleful effect like severely restricted drug availability. We patients would bear virtually all the risk of these unintended consequences.
Instead of looking to add even more regulation the Trump Administration should focus its policy efforts on enhancing competition, the single most important way to alleviate high prices for prescription drugs. Although it remains a winning message on the campaign trail, price constraints—as well as unfair “negotiation” by a dominant Federal payer—would harm consumers.
The first, most-urgent step is to pare down the massive regulatory bureaucracy that has delayed or denied the entry of new drugs to market. The cost of these bureaucratic hurdles for new drug development have led on average to more than 14 years and a $2.5 billion price tag for new drug development and approval (delays which are now far longer than those even in Europe). This cost that has multiplied by a factor of ten in the past decade, according to the Tufts Center for the Study of Drug Development. Deregulation is the top goal for expediting new drugs and reducing drug costs. The appointment of Scott Gottlieb as FDA Commissioner is a very positive step in the right direction.
The second step is to facilitate the arrival of generic drugs on the market; this remains the most powerful price competition to prescription drugs. We know that, over the past decade, development costs for generics has quintupled, while time-to-market has increased from 16 months to 42 months, according to Commissioner Gottlieb. According to FDA analysis, the first generic competitor reduces prices only slightly. However, a second generic manufacturer reduces the average price by nearly half. For products that attract a large number of generic manufacturers, the average generic price falls to 20 percent of the branded price or lower. Let’s streamline the FDA approval process for lower cost generic drugs and also allow selective re-importation, limited to generic drugs, which introduce neither new intellectual property issues nor new active substance risks.
Finally, we must repeal the various taxes and misguided regulations of the ACA that counterproductively raise prices on health care. For instance, it should be relatively simple to forge a consensus to eliminate the taxes on medical devices and brand name drugs. In addition to hurting job creation in these high-paying sectors, taxes and regulation raise prices of care, as their costs are easily transferred to consumers utilizing these vital goods and services.
As others have recognized, the ACA regulatory environment has also encouraged consolidation of physicians’ practices and hospitals to create quasi-monopolies. Hospital mergers have been on a blistering pace, as reported by Leemore Dafny in the New England Journal of Medicine. In the five years leading up to the ACA’s passage, there were about 56 hospital mergers per year on average; in the five years since the ACA, that number has nearly doubled. Although the rate of mergers has begun to slow somewhat in recent years, the pace in 2015 was the highest in 15 years. The impact of these mergers shouldn’t be hard to guess: The last period of hospital mergers in the late 1990s increased medical care prices substantially, at times more than 20 percent, according to Martin Gaynor and Robert Town’s report for the Robert Wood Johnson Foundation.
ACA regulations on insurers and on physician practices are also driving historic merger activity among physicians’ practices. This also raises prices significantly for patients. James Robinson and Kelly Miller reported that, when hospitals owned doctors’ groups, per patient expenditures were 10-20 percent higher, or an extra $1,200-$1,700 per patient per year. Cory Capps, David Dranove, and Christopher Ody found in 2015 that physician prices increased on average by 14 percent for medical groups acquired by hospitals; specialist services prices increased by 34 percent after joining a health system.
A decade prior to passage of the ACA, the ambitious World Health Report 2000, which ranked the health care systems of nearly 200 nations, provided what appeared to be a data-driven argument for dramatic health reforms in the United States. Its most notorious finding—the relatively low U.S. ranking (37th) in “overall performance” as defined by WHO—has been repeatedly offered as objective evidence of the overall failure of U.S. health care by advocacy groups.
Contrary to the naively drawn inferences from that study, the WHO study’s methods and conclusions were heavily criticized in a body of peer-reviewed literature by international academic experts who examined the study in detail. Fundamental flaws in methodology, large margins of error in data, overreliance on markedly flawed measures of health care quality, and highly subjective inputs based on ideological bias put forth as data—even in cases when no actual data was available—have undermined the legitimacy of the WHO’s comparative rankings. The World Health Report 2000 can be considered, at best, deceptive—a document that was essentially a ranking of countries based on their alignment with a specific political and economic ideology—socialized medicine—rather than an objective measurement of health system quality. Indeed, Mark Pearson, head of health for the Organization for Economic Cooperation and Development, when asked about the WHO report, told the Wall Street Journal in October 2009, “Health analysts don’t like to talk about it in polite company. It’s one of those things that we wish would go away.”
Beyond the scandalous bias of the WHO document, the facts throughout the world’s leading medical journals disproved the false narrative that was promulgated through the popular press to justify the ACA. The distortions continue today, as our politicians push for a single payer system. Yet peer-reviewed data consistently demonstrate that access to care, as well as quality of care, are factually worse in single-payer systems than they were in pre-ACA America.
Americans need to see past the fear mongering about the need to preserve certain parts of the law and understand that the ACA indeed must be eliminated and replaced. Its misguided amalgam of regulations generated skyrocketing insurance premiums, reduced patient choice in doctors, funneled millions more poor people into substandard programs, and accelerated consolidation throughout the health care industry—all of which are serious consequences that directly harmed patients.
Reducing the price of medical care in a more freely functioning market represents the fundamental basis for improving access to affordable, high quality care without eliminating the choice that Americans demand, and without impeding the innovations in health care that we all hope for and need. Broadly available options for cheaper, limited mandate, high deductible coverage; markedly expanded HSAs; and targeted tax incentives to leverage their use are keys to increasing price sensitivity and reducing health care prices. Adding new incentives to consider costs with reforms to strategically increase the supply of medical care would generate significant competition and reduce the price of health care overall.
A comprehensive reform plan joining these important incentives with common-sense deregulation would achieve high quality health care at reduced cost. Such a plan would conservatively decrease private expenditures by $2.7 trillion and federal spending by $1.5 trillion, shifting the policy paradigm from one of “raising taxes or reducing benefits” to one using incentives to achieve quality and value. These should be the goals of any reform, but unfortunately the debate about proper health policy has been derailed by politics. Somehow, handing out subsidies and expanding government programs have become the chief standards by which health reforms are judged. Health policy should be based on fundamentals and facts; partisan and political concerns should have no place in such impactful and complex policy decisions. Lives depend on it.