Innovative Health Reform

Prelude: Commonsensical health reform innovations are: health care tax credits for all, shopping for policies across state lines, freedom to chose policies that fits one’s health needs and one’s purse, health savings accounts with high deductibles for those who want such policies, and scraping of community ratings which force the young and well to pay the same rates as everybody else.

Below, former Speaker of the House Newt Gingrich speaks of another innovation: freeing up doctors and entrepreneurs by not slashing their pay and imposing punitive taxes so they can feel free to innovate.


Wall Street Journal, September 21, 2009
A Growth Vision for Health Reform
Why limit an innovative industry to a certain percent of GDP?
By NEWT GINGRICH

Despite all the well-documented problems with our health-care system, the United States is still the world's leading source of medical innovation. Since 1960, the U.S. age-adjusted death rate for heart disease has declined by 54% due to advancing technology and new drugs. Pacemakers have been transformed. They once required a user to wear a backpack to monitor the device's short battery life. Today, pacemaker batteries last more than seven years and are small enough to install in the rib-cage muscle wall.

Premature babies survive in America to live full lives more often than anywhere else in the world. New drugs now arriving on the market cure once-lethal leukemia. On the horizon there are vaccines to prevent other types of cancer. Modern science and technology offer even more exciting treatments in the future for diseases like AIDS, Parkinson's and Alzheimer's.

Standing in opposition to this world of hope is the vision of reform advanced by President Barack Obama and congressional Democrats. That vision would destroy the economic incentives that drive health-care innovation because it starts with a fundamental conceit: that government planners can spend health-care dollars better than patients and doctors in the marketplace. This planning is the foundation for the arbitrary insistence that spending 17% of our GDP on health care is "too much."

The new bureaucracies that would be set up to reduce health-care spending by slashing payments to doctors, hospitals, surgeons, specialists, drug companies, high-tech equipment makers and others will kill the innovation that has served us so well. The essential incentives for the huge capital investment necessary to develop breakthrough treatments will be gone. And so too will high-paying jobs that these investments create.

Indeed, the plan released by Sen. Max Baucus (D., Mont.) last week would impose new taxes on medical device manufacturers of $40 billion over 10 years. That's more than industry venture capital investment.

We do need basic health reforms. But their focus should be on maximizing patient choice and freeing health-care providers. If we embrace reforms such as expanding Health Savings Accounts, patients and their doctors will, through billions of decentralized decisions, determine the percentage of GDP that should be spent on health care.

We could also expand choice and competition by repealing laws that prevent patients from buying health insurance across state lines. States can follow Florida's example by setting up a Web site that posts real-time prices for medications at different drug stores so customers can comparison shop. The government should make public information collected through Medicare that will allow consumers to see where they can get the cheapest and most effective treatments.

No American should suffer pain, disease or worse because of a lack of health care. We already spend huge sums to help those of modest means through Medicaid and other programs. Reform those programs to create a true health-care safety net. Back it up with state high-risk pools to ensure health coverage for everyone.

That's the American way of reform.