John C. Goodman

When was the last time you saw a news headline announcing that a cancer patient died because she couldn’t afford a drug that could have saved her life? I bet you haven’t. Why? Because it doesn’t happen. At least not in this country. President Trump doesn’t understand the market for drugs. He is not alone. Most people don’t understand it. Here is John Goodman’s contribution to clear thinking:

1. In Part I, he asks readers to imagine a free market for drugs, in which drug manufacturers are given a patent for a certain length of time. The patent allows drug companies to charge a monopoly price. But by price discriminating, they insure that almost no one goes without a lifesaving drug.
2. In Part II, he asks how free market health insurance would cover expensive drugs. People who are more risk averse would purchase “top up” plans to pay for drugs conventional insurance finds not cost effective.
3. In Part III, he shows that both public insurance and unwisely-regulated private health insurance face perverse incentives to favor the healthy over the sick. Reforms are suggested.

For many years, magnet schools were the only public schools that competed for students. And the experience as been very positive. So why can’t every school do that? John Goodman argues that every public school should be able to specialize in what it does best and compete for students. More

There is tremendous waste in the program. That means that Congress can make the program work better for beneficiaries and at the same time free up trillions of dollars to help fund the tax bill. The reforms include Roth Health Savings Accounts, 24/7 direct primary care, and access to a competitive medical marketplace. More

They might start by asking, Why are some voters Democrats in the first place? Those who so identify, I believe, tend to think differently than the typical Republican voter on five dimensions. More.

There is a great deal of waste in our entitlement programs. And by cutting out waste, we can make these programs work better for the people who depend on them.
Take Social Security. Last year the agency said it has identified 2 million beneficiaries who have been overpaid. It has sent them “clawback” letters, demanding Uncle Sam’s money back. In some cases, the claims go back several decades, and the amounts can be more than $300,000

Our health care system is replete with perverse incentives. If they are not checked, our premiums and taxes will consume ever more of our national income. Canada checks them by limiting resources.  Doctors must send their patients to the hospital for simple x-rays. And the country ranks 25th out of 29 developed countries on the number of MRI scanners per person. In the US, private health insurers perform the task – by requiring preauthorization for certain services and denying claims for medically unnecessary procedures. Despite some problems, our system works much better. More.

The FDA wants ads to have more warnings about risks and side effects. RFK, Jr. wants to abolish the ads altogether. Yet, our most important health care problem is not that people are taking too many prescription drugs. They are taking too few. We get our highest return on money we spend on drugs (versus doctors, hospitals, etc.). We do not have too many ads. We have too few. More.

This occurs for three reasons: traditional Medicare requires three separate insurance plans for comprehensive coverage; traditional Medicare drug plans are required to community rate, without adequate risk adjustment; and pharmacy benefit managers (PBMs) are able to calculate patients’ coinsurance based on list prices, rather than on the actual discounted prices the PBM pays the manufacturers. In addition, beneficiaries in all Medicare plans will pay more for drugs and drug insurance because the IRA removes more than $300 billion of government funding from Medicare Part D over 10 years—leaving the market with no alternative but to shift costs to beneficiaries. More.

Although Big Pharma and big business agree on the end result (people get the lifesaving drugs they need), they don’t always agree on who should bear the bulk of the cost. Enter the politicians to tilt the scale. A bipartisan push would allow drug companies to sell brand-name drugs at monopoly prices for virtually all patients with employer-provided health insurance. The result would be higher drug company profits and lower employee wages. More.