The Kaiser Family Foundation recently reported that the average cost of employer provided health care coverage for a family has exceeded $20,000. Costs have risen by more than 50 percent since 2009. Health care now makes up nearly a fifth of the American economy, putting an enormous drag on economic growth and wages. It is the biggest concern for small businesses and their employees year after year.
Americans agree that the health care status quo is not working. Democrats have responded by calling to nationalize health care under a “Medicare for All” system. Yet this policy would not address the fundamental health care cost drivers. It simply would transfer costs to taxpayers while introducing rationing in an attempt to control them.
Our research tells us there are better alternatives, ones that harness the same market forces of choice, competition, and transparency that keep prices low in nearly all other sectors of the economy. These are proposals that eliminate the cronyism, backroom deals, and hidden contracts that artificially inflate costs, and that preserve and expand choice and the important relationship between doctors and patients.
One such reform framework is the “Health Care for You” plan which our organizations, the Job Creators Network and the Goodman Institute for Public Policy Research, are promoting. It was developed from extensive market research into demonstrated patient preference. It draws on inputs of more than 25,000 patients, doctors, and health care professionals to determine what stakeholders instead of politicians want from a health care plan. It is the first health care reform plan that comes directly from people rather than from Washington backrooms.
There are other reform plans, of course, which could be part of this debate. But based on our research, we believe that for any reform to succeed, it must include several components focused on what patients, families, and doctors say they need, and must preserve the aspects of American health care that once made it the envy of the world.
Among the most popular and innovative health reforms is portable insurance that travels with Americans from job to job, and in and out of the national labor market. Today, most health insurance is tethered to employment because employers pay for coverage with pretax dollars. This favorable tax treatment, in effect a tax deduction, should be extended to all Americans, independent of their current jobs. Reform should also broaden contribution limits and relax restrictions on personal health management accounts, also known as health savings accounts.
Putting individuals back in charge of their health care spending through expanded tax free accounts would vastly increase direct medical care, also known as direct primary care for family doctor needs. This direct model cuts out middlemen to lower costs. It only requires about a third of the number of administrators as traditional providers. Larry Van Horn, an economist at Vanderbilt University, estimates that cash health care prices are 40 percent lower than negotiated rates of insurers.
Cheaper telemedicine, in which patients see doctors and get diagnosed over online portals, should be part of any direct medical care model. In addition to slashing overhead and administrative costs, telemedicine is more convenient for busy patients who could reach doctors over phone or text. Inexplicably, Congress has held up its expansion by passing a law that mostly prohibits telemedicine under Medicare.
Our research shows that the overwhelming majority of patients want the relationships with their doctors restored. It has been weakened by years of bureaucratic, lobbyist, and political intervention. Serious health care reform should get these third parties out of exam rooms by reducing regulations on physician paperwork, mandated essential benefits, and geographic and provider network limits.
Finally, patients want personalized plans that make sense for them rather than the expensive “one size fits all” policies that proliferate today. This individualized health care vision stands in stark contrast to collectivized “Medicare for All” that would put the government in the examination room, alongside doctors and patients, as the sole payer.
There is one government rule that remains important, according to our research, which is maintaining protections for those with preexisting conditions. Any serious reform plan should prohibit discrimination against these patients, but it should also move them into insurance risk pools where they will not inflate general health care costs.
Taken together, these reforms would put patients first by restoring choice, repairing the relationship between doctors and patients, and improving affordability. Those who are not ready to throw up their hands and socialize American health care should support them all.
Alfredo Ortiz is president and chief executive officer of the Job Creators Network. John Goodman is an economist and president of the Goodman Institute for Public Policy Research who is credited with originating the policy idea of health savings accounts and other federal tax innovations.