David Goldhill’s piece about health policy identifies the main problem with the current US system as health insurance. Not the fact that so many people lack health insurance, or the way health insurers operate, or any of the usual complaints, but in the sheer fact that Americans pay for health care primarily by means of health insurance. Goldhill argues that this payment system strips patients of the ability to make informed decisions about their own care, subjects health care providers to a regime of incentives that are unrelated to the rationality of the marketplace, and inflates the costs of health care to unsustainable levels. Goldhill proposes a far-reaching plan to replace this system.
Under Goldhill’s plan, the government would operate an insurance plan that would provide coverage to every American who faced catastrophic health care expenses; that plan would, in time, “ultimately replace Medicare, Medicaid, and private insurance.” It would pay only for genuinely catastrophic expenses. Goldhill acknowledges that it would be difficult to define the limit of “catastrophic,” and discusses various dollar amounts that might be used as a cutoff. Perhaps a percentage of national median income would be a better determinant than any absolute number of dollars, but Goldhill doesn’t bring that up.
The second part of Goldhill’s plan are Health Savings Accounts. Already in existence, these tax-sheltered accounts would under Goldhill’s plan be mandatory for all Americans, and would be the source from which virtually all health care would be paid. Goldhill proposes that the government should subsidize low-income Americans with direct payments to their Health Savings Accounts, so that everyone would have at least as much money in his or her Health Savings Account as any patient would likely be able to claim from Medicare or Medicaid today. The difference is that under Goldhill’s system, the patients themselves would be the ones writing the checks to health care providers. The providers would then have to compete for patients. That competition would take the mystery out of health care prices, and would give health care providers an economic incentive to keep prices down and quality of service up.
Goldhill’s system would also give health-care providers an incentive to adopt best practices, breaking down resistance from entrenched stakeholders. As an example of such resistance, Goldhill opens the piece with the story of his father’s death from a hospital-borne infection in 2007. Remarking that about 100,000 Americans die of hospital-borne infections annually, Goldhill brings up Dr. Peter Pronovost, who has developed a checklist of simple disinfection procedures. Hospitals which have adopted Dr Pronovost’s checklist have seen deaths by hospital-borne infection decline by about 2/3. Yet most hospitals have refused to adopt the checklist, backing down in the face of doctors who are offended that anyone would suggest they need to be reminded to keep clean. Goldhill closes the piece by asking us:
Imagine my father’s hospital had to present the bill for his “care” not to a government bureaucracy, but to my grieving mother. Do you really believe that the hospital—forced to face the victim of its poor-quality service, forced to collect the bill from the real customer—wouldn’t have figured out how to make its doctors wash their hands?
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