-
Time to Go for the Kill
May 22, 2013 | 64 comments
-
Obamacare Implodes
May 15, 2013 | 41 comments
-
Obama’s Rising Inequality
May 8, 2013 | 101 comments
-
Downsize the Liberals
May 1, 2013 | 53 comments
-
Fight Back! Privatize the FAA!
April 24, 2013 | 65 comments
The Right Prescription
Priceless John Goodman
The health-care consumer’s best friend continues his path-breaking work.
With the publication of his path-breaking book Patient Power in 1992, John Goodman did more to change the course of health care in America than Barack Obama has done, or will do. Goodman has just published a new book, Priceless: Curing the Health Care Crisis, which offers the prospect of a worldwide revolution in health care policy. With the Supreme Court about to rule on Obamacare, this book could not be more timely.
Patient Power argued for policies that would shift the power and control over health care funds and decisions to patients and their chosen doctors, and away from third party bureaucracies such as government, HMOs, and insurance companies. It spawned Health Savings Accounts (HSAs) and other consumer directed health plans that have proven far more effective in controlling and reducing health care and insurance costs than anything President Obama has ever done.
Health Care Liberation
Goodman begins his
new book by explaining the vast, new revolutionary vistas that have
opened up since Patient Power:
First is the importance of liberating doctors. Our focus in Patient Power was on freeing the patients….Give patients control over their own healthcare dollars, we argued, and they will become more careful, prudent consumers of health care. What I didn’t anticipate was that the changes on the supply side of the market would be far more profound than the changes on the demand side….On the provider side, however, we are unleashing a torrent of entrepreneurial activity that would have been unthinkable only a decade ago..
The foundation for the revolutionary changes is still Patient Power, Goodman explains:
When patients aren’t spending their own money, there is no way doctors can compete for their patronage based on price. When they don’t compete on price, they don’t compete on quality either. The services they offer will be only those services the third parties pay for and only in settings and ways the third parties have blessed. But give patients control over their own healthcare dollars and the provider community will begin to meet needs in ways the third-party-payer bureaucracies could never have dreamed of.
Part of the solution, Goodman explains, is consequently “Doctor Power,” giving doctors and hospitals more power over their own practices and services to compete in serving the needs and desires of patients. Goodman says, “What we need is a system in which the provider side of the market competes to provide value because it is in their self-interest to attract patients in this way. We will never solve America’s healthcare crisis from the buyer side of the market. It can only be solved from the provider side….[E]very example of high-quality, low-cost medicine originated on the supply side — not the demand side — of the market.”
Goodman continues, “The second thing I missed the last time around was the importance of prices. The single worst public policy decision in all of health care was the decision to eliminate money prices from the market. Have you ever wondered why the panhandler on the street corner has a cell phone, but no access to primary care? It’s because he can buy a cell phone in a real marketplace, but he can’t buy health care that way.” Goodman explains some of the implications:
As this book goes to press, a new study finds that enrolling children in the Children’s Health Insurance Program (CHIP, essentially Medicaid for children) does not result in their receiving more medical care. But when CHIP pays higher fees to doctors, the children do get more care…. But we make it illegal for the family to add to CHIP’s fees and pay the market rate for their care. They can have free health insurance only if they agree not to purchase the same care everyone else is able to buy.
Goodman contrasts the failure of health care for the poor with food stamps, which do successfully help the poor. With food stamps, the poor are free to choose the same food available in the market to everyone else at market prices, and supplement their food stamps with their own funds to do so.
Goodman further explains:
The third thing I failed to fully appreciate in the earlier book is the second biggest mistake in all of health policy: making it illegal for insurers to charge premiums that reflect real risks…. In most places we make it against the law for a health insurer to charge a fair premium to a person who has above average expected healthcare costs. This means that insurers have an economic self-interest in avoiding people with health problems and in failing to encourage them to seek optimal treatment once they do enroll.
Goodman and I both agree that the government should sponsor a health care safety net so no one will suffer without essential health care, as discussed below. With that backstop, however, we need to maximize the power of the market to provide the best health care at the lowest possible cost. But that is not what we are getting under current policies, as Goodman explains: “The absence of real prices for health insurance and real prices for medical care combines to completely deter what should be a vibrant market to solve the problems of people with medical problems…. Notice that both of these policy mistakes share the same basic problem: the suppression of the price system. That is why I chose to title this book, Priceless.”
Goodman describes how the market would work to benefit patients and consumers of health care if the price system were allowed to operate properly: “In a normal market, prices convey information. A high price tells innovators and entrepreneurs the market places a high value on getting a problem solved. It communicates that the reward for finding a solution could be high as well. When the price system is artificially suppressed, the information does not get communicated. Almost all of our problems in health policy stem from this central fact.” Goodman explains that if the price system is allowed to work, “In such a market, the sick would be just as desirable as the healthy to an insurance company. And there would be an active, entrepreneurial market to find low-cost ways to solve your health problems — in order to lower costs both for you and your insurer.”
Goodman explains as his fourth new insight the reason we are blocked off from truly effective health policy reform: “[T]he most important differences people have over health policy have little to do with facts, reasoning or logical argument. The most important differences stem from differences in fundamental world views. There are a very large number of people in this field who find the price system distasteful — at least for medical care.” As a result, “the truth of the matter is that there is no amount of evidence that is going to convince most of the orthodox health policy community that prices should be allowed to allocate resources in the market for medical care. For well intentioned reasons perhaps, they are emotionally predisposed to favor the suppression of normal market processes.”
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (22) | Leave a comment
More Articles by Peter Ferrara
More Articles From The Right Prescription
http://spectator.org/archives/2012/06/20/priceless-john-goodman
Follow us:
ADVERTISEMENT
The Spectacle Blog
Former IRS Commissioner Refused to Say That Targeting Conservative Groups is Wrong
Benjamin Brophy | 2:27PM
SPONSORED LINKS
FLASHBACK TO: 1995
-
Pope Culture
A man of faith in a godless age is hitting Americans where it hurts.
-
Why the GOP Does Not, Like, Totally Suck
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
-
Dames at Sea
-
In the Absence of Guns
In Britain, defending your property can get you life.
-
The Metaphysical Martini
-
Counting the Costs of Clintonism
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
-
Chuck McHagel
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
-
The Legacy of Old John and Mother Fresh-Roasted
-
It’s the Best Time of the Year
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
-
The Bush Crack-Up
Was the President done in by the economy, or by the politics of the economy?
Clip of the Day
ADVERTISEMENT
Mimi | 6.20.12 @ 7:21AM
America is blessed to have creative thinking people like JOHN GOODMAN to take our problems and come up with solutions to maintain our FREEDOM and LIBERTY ! The Libs answer is to take over, control, change our right to choices and force individuals to line up and do it our way!
The coming election will point the way to which side we take, once and for all. May we choose well and with an overwhelming way...our future lives and those of our children depend on it .
Von Mises Jr| 6.20.12 @ 9:48AM
Mimi, Doctors are typically the smartest among us and they have figured out ways to help get coverage to people in need in my state.
The first problem is the waste and fraud in the government system. Medicaid only reimburses about $13 per one-hundred since most is lost in the government "Moneygoround" and a small amount for basic cost for care. It does not pay for doctors to treat Medicaid patients.
Second issue is the medical mal-practice insurance and lawsuits. New doctors cannot afford the $150K+ in insurance, so they are treating pregnancy to the point of birth and telling the woman to go to the State or City Hospital for delivery. If Doctors are sued, they often settle for some $25K ranges that mean they have to treat over 1,900 Medicaid patients to settle one lawsuit.
So what the doctors are doing is opening
FREE CLINICS for the poor. If they can pay $15 for the visit, it helps. But charity provides for the low medical costs and medicines. And by offering FREE health services, they are not subject to lawsuits.
This illustrates perfectly why decisions must take place outside of DC. Our political class is most interested in finding payoffs for their cronies and crooked lobbyist. Our doctors, G0d blesses them, are finding ways to treat people in need.
Jack London| 6.20.12 @ 7:53AM
Total nonsense. The last thing we need is to shop for healthcare like we do for food – this absurd market idea has been debunked time and again. Ferrara and his shopping friends should ask why every other developed nation has a national health system.
c. j. acworth| 6.20.12 @ 8:08AM
And why their national health systems are all going broke or provide substandard care. There have been a number of reports coming out of England recently about NICE, accompanied by horror stories.
TLP| 6.20.12 @ 8:20AM
I thought John Goodman was Fatter.
Good for him.
TLP| 6.20.12 @ 8:27AM
So, pray tell us, where we can buy Health Care outside of our own State. Tell us why we aren't ALLOWED to buy Health Care outside our States. Tell us why we have the best Health Care in the World. Or, why Americans get all of the Nobels, in Medicine. why all of the New Medical Technologies and Vaccines, and Operation Procedures come from HERE, and not from any of the other "Developed Nations" that you love so much, and seek to emulate?
Tell us.
Dumb@ss.
Jack London| 6.20.12 @ 9:01AM
You can buy any health care you like in any state. It's the insurance that's regulated, and with good reason.
As for medical discoveries, many come from the rest of the rest of world. I know it's hard for you to comprehend - expect you've never set foot outside of your neighborhood. Who did the first heart transplant? Who invented the CT scanner? Who pioneered hip replacements? Where was DNA uncovered? Etc etc.
TLP| 6.20.12 @ 9:16AM
And HOW LONG AGO did these things occur, in your Wonderful other Industrialized Countries?
"You can buy Health Care anywhere you want. The Insurance is what's Regulated."
You gotta be Fcking kidding me.
The Insurance IS the Health Care.
You're just one big bag a BULLSH*T, ain't ya, Jack?
Yes you are.
You're the Useful Idiot's, Useful Idiot.
Way to go.
Jack London| 6.20.12 @ 10:22AM
The first face transplant was done in France in 2008 - I suspect you could do with one - then you may feel confident to venture out into the world a bit more.
And yes insurance is key, isn't it? Because really - you can't go 'shopping' to buy yourself a face transplant, unless you're Bill Gates or Warren Buffet.
TLP| 6.20.12 @ 5:41PM
That's it?
That's all you got?
You're Pathetic.
JD| 6.20.12 @ 12:32PM
Liberals love to tell us that only they know anything about the rest of the world, but the rest of the world never seems to agree with them. The fact remains that foreigners often come here for advanced care that they can't get locally, and that the whole world bums off our drug research process.
C'mon Man!| 6.20.12 @ 6:34PM
TLP - BOOM! Jack got spanked!
Truth to Power| 6.20.12 @ 9:15AM
Developed nations like England:
http://www.dailymail.co.uk/new.....z1yK7gbr7D
This is what happens when you are no longer a customer. You are not an asset but a liability.
JD| 6.20.12 @ 12:44PM
It is absolutely true that the primary difference between us and them is that we spend extraordinary amounts of money on end-of-life care, and they do not. One can find critics of both approaches. For the most part, it's just a waste of a huge amount of money. On the other hand, sometimes these expensive efforts result in people being sent home to live healthy lives for years longer.
So which is the best approach? Here's a wild idea - let that fortune be spent on end-of-life care IF THE PERSON PAYS FOR IT, otherwise don't provide it. I know, liberals' heads just exploded, but there is no fairer way.
THKrupp| 6.20.12 @ 4:39PM
Actually its a very good idea. I have an Uncle that has never had health insurance. He self insure's. When he had to have his gall bladder taken out he called around to different hospitals to find the one that best suited his needs. Knowing him it was the cheapest one. It works very well when you have an issue like that. Now if you are having a heart attack you cannot take the time to call around to hospitals looking for the best deal. In my view we have to get insurance out of employers hands. Why everyone views this as the best way to go about getting health care is beyond me. In our system you are penalized for not being in an employer sponsered group. It should be the opposite. Everyone should shop for their own personal insurance. People should be allowed to band together in groups offering the best deal. Employers should have nothing to do with it. People need to have the responsiblity for their own healthcare. This is the only way costs can be reigned in. We do have a very good health care system. Unfortunately the way we pay for it is probably the most inefficient and worst way to go about doing it.
C'mon Man!| 6.20.12 @ 6:32PM
Jack, you mean all their failing systems? You can't dispute the facts - wealthy Canadians come to America for treatment, as do the welathy from other countries. Absolutely none of the state run medical programs is successful, you can scream till you're blue in the face but that doesn't make it so.
Clearly you can not fathom American ingenuity - even thoug you and Oblame-a don't believe in American greatness, thankfully many of us do. Take off the gov't shackles and see what we can do!
As for the poor, they are already treated for free at county hospitals and clinics, and before then doctors could afford charity work.
I believe in the American people, not some Harvard UNeducated, indoctrinated idiots, who have never earned a dime in their lives.
Pecos Pete| 6.20.12 @ 9:47AM
OK, we've heard from Jack London, now we can look forward to Purp and Brooksie.
Any attempt to fix the corrupt federal government management of health care will always bring out the nut cases. They simply want us to stand in line and wait to die.
WardR| 6.20.12 @ 11:17AM
The medical prejudice against the market is grounded on two elements. First, the power of Harvard in the medical arena, and Harvard has opposed for-profit hospitals for years. Second is origin of health insurance, Associated Hospitals of New York that became Blue Cross. It was established on the basis of 80% cost reimbursement and has remained that way ever since.
Tom Kyba| 6.20.12 @ 12:24PM
JACKLONDON is full of vigor with regards to telling others to do their homework. That works both ways, Mr. Chomsky. Perhaps an honest(perhaps you need to look that word up) investigation by yourself into the endless problems with universal health care, including all the people sent home due to overcrowding and ending up dying, not to mention the ones dying in beds in ER hallways, the nurses' unions blackmailing government into pay increases, which are followed by strike threats by other nurses' unions because the first unions' members now make more than them etc. etc. But I guess it's no big deal to you 'cause we're just making omelettes, right?
THKrupp| 6.20.12 @ 6:59PM
While I dont agree with a government run health care system. I also dont agree that the state run systems are horrible. If people were dying off in droves as you suggest then why do all these other countries have longer lifespans than we do here? There are just as many horror stories of patients in the USA where the insurance company decides not to pay for some treatment or other. There are issues with both types of systems. Also there are quite a few Americans that go to India and Mexico for surgeries just because its much cheaper and the Dr was trained in the USA. We pay the most per capita for health care here vs other industrialized countries who also seem to live longer. Our life expectancy at birth is 50th in the world. Part of that can be explained by culture but its clear our system of paying for health care is broken and needs to change.
cicero| 6.20.12 @ 1:29PM
The huge problem with health insurance is that the various state governments mandate coverage in each policy that you may not want or need. If the consumer could bargain with the various insurance providers for the coverage that they are willing to pay for, the cost would go down significantly. Most of us neither want nor need coverage for chiropractic care, aids coverage, etc. However, these are mandated coverages in most states.
As for blaming the rising cost of med care on the malpractice scourge, that is a tired old song that has been discounted every time it has been studied. It is in reality an insurance problem. The young docs are scared out of their wits by the insurance industry reps who are allowedd into the flock. In Michigan we have med mal tort reform in place for over 20 years, and our docs still pay the second highest premiums in the country.
Get the market back into med provision. It will serve both the consumer and the provider.
jomo2009| 6.20.12 @ 3:39PM
If Romney is elected in the fall, he should appoint Goodman as HHS Secretary or a special assistant in the White House.