John Goodman

The trick is not to cut spending. The trick is to cut spending in a way that leaves people at the bottom of the income ladder at least as well off – if not better off – than they are today. Writing at Forbes, John Goodman asks: why not let Medicaid enrollees buy health care the way they buy food with Food Stamps? That would give beneficiaries the opportunity to access walk-in clinics and urgent care centers rather than going to the emergency room.

He also asks, why not let enrollees have an HSA from which they pay a modest month fees to direct primary care doctors, who provide 24/7 access to all primary care? Currently, when people enroll in Medicaid, their visits to the ER increase by 40%. All told, Goodman says we can reduce health care spending by $7 trillion over 10 years – with most of the gain going to taxpayers.

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.

Because of government regulation, no insurer in our health care system wants a sick person. No employer. No commercial insurer in the (Obamacare) marketplace. No Medicaid managed care plan. And no safety net institution. The exception is the Medicare Advantage program, where risk adjustment makes the healthy and the sick equally attractive from a financial point of view. Unique in our health care system, MA plans specialize in such chronic conditions as diabetes, heart disease, cancer, etc. These MA plans actually seek to enroll patients that conventional health insurance would like to avoid. 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.

More than half of all seniors in Medicare obtain health insurance from a private Medicare Advantage plan. Yet many on the left are hostile to these plans. Yet this hostility is misplaced. A new study finds that the migration of people from traditional Medicare to the Medicare Advantage program over the last decade has saved the federal government $144 billion. More. 

Writing in Health Affairs,  John Goodman says there are a number of ways to make HSAs available to more people and to serve more needs. Included:

1. Roth-type HSAs for seniors on Medicare.
2. Roth HSAs for people who buy insurance in the exchanges.
3. Use of HSAs to obtain 24/7 “direct primary care.”
4. HSAs for chronic care.