We are witnessing a radical transformation of the U.S. health care system. Although health care is the most regulated market in our economy, we have recently witnessed massive deregulation — partly in response to the coronavirus threat. These changes were only possible because of three years of prior effort by the Trump administration. Many of the core ideas were pioneered by Goodman Institute health economists.
The Trump vision for health reform was laid out early on in Reforming America’s Healthcare System Through Choice and Competition. This 124-page Health and Human Services document argued that the most serious problems in health care arise because of government failure, not market failure. This was the first time any administration had ever acknowledged that in health care government is not the solution; it is the problem.
Among the dozens of needed reforms, the five most important initiatives were explained by John Goodman and Marie Fishpaw, director of domestic policy studies at the Heritage Foundation, in a seminal analysis. Public policy, they argued, should make it as easy as possible for people to have:
- Personal and portable health insurance that travels with them from job to job and in and out of the labor market.
- Round-the-clock access to a personal physician, including communication by phone, email, Zoom and Skype.
- Full access to modern technology, so that people can receive doctor consultations at home rather than cope with traffic and long waits at doctor’s offices and in emergency rooms.
- Access to centers of excellence that specialize in chronic health conditions and actively compete for patients.
- The ability of patients to manage their own health care dollars with accounts they own and control, including spending for most forms of chronic care.
Before Donald Trump was even elected, these core ideas were included in legislation proposed by House Rules Committee Chairman Pete Sessions and Sen. Bill Cassidy, with the help of John Goodman.
In an ideal world, most people would own their own health insurance and take it with them as they travel from job to job and in and out of the labor market. Almost alone among U.S. think tanks, the Goodman Institute has promoted this idea for many years – in editorials, in publications, in legislation and in advice to members of Congress. See the summary of our efforts in A Win for the Goodman Institute.
Although the Obama administration threatened employers with huge fines if they provided individually owned insurance for their employees, the Trump administration radically reversed course – allowing all employers this option as of January 1, 2020.
Access to a physician at nights and on weekends by means of phone, email and other means used to be a privilege only the rich could afford. But new models of direct primary care (DPC) have made this type of service affordable for almost everybody.
John Goodman was one of the early advocates of this idea and the Goodman Institute may have been the only major think tank urging the Trump administration to adopt what became two major reforms: allowing employers to put money into an account from which employees can contract with a DPC doctor of their choice and allowing DPC in Medicare.
For well over a decade, health economists associated with the Goodman Institute have advocated broad use of telemedicine – in studies, backgrounders, editorials and in other forums. No other think tank seems to have paid much attention. In 2020, deregulation came swiftly. Millions of patients are experiencing virtual consultations with their doctors – including, by mid-April, one-fifth of all seniors over 70 years of age.
The Goodman Institute has also promoted specialization in health insurance. In the (Obamacare) exchanges, in traditional Medicare Advantage,most Medicare and in virtually all employer plans that give workers a choice, insurers are required to be all things to all enrollees. The plans can’t ask health questions and the potential enrollees can’t communicate what their problems are before enrollment.
The idea of specialization – of becoming a focused factory and getting really good at a particular kind of care – is an idea long advocated by our friend and colleague Harvard Business School professor Regina Herzlinger. The idea was incorporated in the Sessions/Cassidy bill and is often promoted in John Goodman editorials at Forbes. No other think tank has been on board with this idea. But the Centers for Medicare & Medicaid Services was listening.
As of 2019, CMS is allowing Medicare Advantage plans to specialize in such diseases as diabetes, heart, lung, etc. These plans can exclude people who do not have the disease. They can ask health questions and request medical records before admission. This is a remarkable step in the right direction.
Although he is called the “Father of Health Savings Accounts,” for a quarter of a century Dr. Goodman has argued that the rules governing these accounts are far too restrictive – especially the requirement for an across-the-board deductible. The ideal HSA, he says, should be completely flexible – wrapping around any third-party insurance plan and available to pay expenses that insurance doesn’t pay.
The Trump administration agrees. In 2019 the administration used its executive authority to allow health plans to ignore the high-deductible requirement for certain chronic illnesses. And in 2020 the administration allowed all health plans to provide first-dollar coverage for the testing and treatment of COVID-19, without jeopardizing the tax- free status of HSAs for the 30 million families who have them.