Health Reform: Individual Freedom Versus Government Control

In the last two years, I have written two books: one, Innovation-Driven Health Care, and two, Obama, Doctors, and Health Reform. Both books stress the need and desirability for bottom-up private innovation, not top-down government control, for individual freedom rather than either status quo or government regulation with suppression of creativity and entrepreneurship.

My idea for an ideal patient-centered and doctor-directed system, friendly to both patients and doctors, who, after all, form the central core of the health system and are its reason for being, is this.

Have employers, Medicare, Medicaid, and government come up with a requisite and reasonable sum of tax-free money, probably in the $6,000 to $10, 000 range, for every individual – man, woman, and child - and let the consumer of health services involved spend as they see fit, based on reliable information based on cost and value and quality. To protect against bankruptcy, let each buy health insurance that covers their catastrophic needs based on their income and assets. And let those who do not spend their money in any given year carry it forward into a health retirement account. And let there be a Health Security Commissioner, much like the present SEC, who oversees all of this.

Reconfigure the tax code so everybody can buy health insurance with tax-sheltered money. Create a U.S. version of the universal consumer-driven Swiss health system which provides quality care at a one-third lower cost than ours. The Swiss requires all people to buy health insurance (the poor receive funds to buy insurance, just like everybody else.

The Plan

Here’s the plan, borrowed in part from the writings and books of Senator Tom Coburn of Oklahoma and Professor Regina Herzlinger of Harvard Business School.

1. Provide universal coverage.

2. Require everybody to buy insurance, using tax-sheltered money.

3. To prevent bankruptcy, have insurance cover possible catastrophic events, based on all expenses exceeding some percent of income and assets.

4. Have government subsidize all those who cannot afford to buy in.

5. Let hospitals and providers bundle care as they wish and let them quote their own prices based on published information.

6. Require published data on quality, performance, and outcomes.

7. Risk adjust prices, so providers can make a reasonable profit for caring for the sicker among us.

8. Encourage and incentivize providers to compete by innovating to create delivery systems that insurers will be interested in covering.

This plan is about individual free-market principles instead of government mandates. It encourages innovations to provide more and better care for less. It discourages third party bureaucracies that reward the status quo. It fosters patient-centered and patient-friendly care.

To bring about this ideal system, the job of Congress will be to pass laws that allow you to buy your own insurance, to help create information about cost and quality using health information technologies, and to transfer money to the poor. Senators, representatives and national politicians must stop practicing medicine and get out of the way. They must let well -trained doctors do the doctoring and responsible informed patients do the shopping. We must stop doctors’ work and patients’ choices being dictated directly by insurers and government and indirectly by lawyers.