In this chapter, we will list and briefly explain several policies that the federal and state governments could take that would immediately and significantly improve the delivery of health care, simultaneously boosting quality and slashing prices.
We are deliberately keeping this chapter relatively short, because the purpose of this book is to educate and empower you, the individual reader. We actually think it is counterproductive for people to engage in excessive “evangelism,” even on a topic of this importance.
Nonetheless, we recognize that some readers will want this type of list for completeness. Furthermore, there are always critics ready with the zinger: “If you don’t have a solution, quit complaining!” Without further ado, here is our list of policy proposals that would dramatically improve our health care and insurance markets:
1. Repeal the Affordable Care Act. This legislation cannot be tweaked. It needs to be repealed, period.
2. Abolish the FDA and its associated powers. We showed in Chapter 2 that the FDA is quite literally responsible for the deaths of many thousands of lives, through both its acts of commission and omission. Consumers should have the freedom to try whatever drugs, devices, or procedures they wish, without getting permission from Washington. On the other hand, private sector groups would do a much better job of warning the public about genuine safety hazards—especially once the spell of the authoritative FDA disappeared and the public realized it needed new sources of information. This is not speculation on our part; we already see private-sector ratings outperforming the FDA in this crucial role.
Abolition of the FDA would cut drug development costs by more than half, virtually overnight, and without a sacrifice of safety. In practice, the current system involves a revolving door and cozy relationship between large pharmaceutical companies and their government overseers. Getting rid of the FDA would not only make popular drugs cheaper, it would allow for the development of “niche” drugs that cater to rare conditions and are currently not profitable for pharmaceutical companies to pursue.
3. Eliminate the Department of Agriculture’s influence on the American diet. Perhaps the only thing more horrifying than federal bureaucrats telling you what pills are safe is having them tell schools the ideal daily allowance of carbohydrates. To understand exactly why the supposed experts in DC keep getting things so wrong when it comes to nutrition would require a full study of the government’s long-standing tradition of subsidizing farmers. Don’t worry; people would still grow food and sell it for money even without oversight and encouragement from Washington. Whatever genuinely useful nutritional functions the USDA currently serves could be filled (at lower cost) by private-sector analogs in a competitive field. There is nothing magical about being employed by the federal government; experts would have the same skills working for private inspection agencies, insurance companies, and consumer watchdog groups.
4. Abolish all government medical licensing and certification. If two adults of sound mind want to engage in a voluntary transaction involving health care, this should not land one of them in a cage just because he doesn’t have the government’s seal of approval. In a free market in medicine, private, voluntary certification organizations would thrive. Major hospitals and clinics would no doubt insist that their staff have the appropriate educational background and residency experience, and insurance companies would do the same before offering malpractice coverage.
With this simple change, the floodgates of medical supply would open, driving down prices with a surprisingly small drop (if any) in average quality. People who wanted to hire the best surgeons could still do so; those highly trained experts wouldn’t suddenly forget how to use a scalpel just because the government no longer issued medical licenses. The difference is that patients would now have the option of hiring lesser-qualified medical personnel at a fraction of the previous price.
Furthermore, in combination with abolition of the FDA and Department of Agriculture, this step would remove most of the power that many cynics currently associate with “Big Pharma.” As we stressed back in Chapter 2, we wholeheartedly acknowledge that there are devious characters inside and outside the halls of government; the private sector is not composed of angels, especially in the health care field. But the crucial fact remains that without the government’s club to stamp out “unsafe” products (like raw milk) and “unqualified” practitioners (like homeopaths), companies like Monsanto would not be the menace that so many currently fear. 1
5. Remove legal restrictions on organ sales. Yes, we realize this particular proposal may strike some readers as absurdly radical. But the current arrangement is nonsensical and deadly. If someone needs a kidney and finds a compatible donor, it is perfectly legal to pay the donor for his travel expenses and hospital bills. But it is illegal to throw in a “little something for the effort” (as Bill Murray might say). Studies suggest that some 9,000 Americans die annually because of an organ shortage.2
It’s no mystery how to cure a shortage: the government just has to get out of the way. Currently there is an effective price ceiling of $0 set on the compensation (above genuine expense reimbursement) for the sale of a spare kidney. If Jim Smith is going to die without a transplant and would gladly pay (with the help of his insurance) up to $100,000 for a kidney, while Bill Martin has two perfectly healthy kidneys and would be willing to sell one of them for anything above $60,000 as this would allow him to move his family to a nicer neighborhood, then there is a great scope for these two men to strike a deal, where they both walk away feeling like big winners. It would take a serious busybody to step in between and insist that Jim dies and Bill stays stuck in his crime-ridden building.
6. End legal restrictions on health insurance portability. Although part of the problem comes from the health insurance companies themselves (which are, in fairness, merely responding to the incentives they face), certain legal barriers prevent people from buying truly portable health insurance policies that follow them even after losing a job. In this suggestion we also have in mind the legal prohibitions on “selling health insurance across state lines,” as the issue has been discussed in political campaigns.
7. Give citizens the option to permanently (and irrevocably) “opt out” of Medicare, at a large “gain” to the taxpayer. The Medicare Ponzi scheme will eventually come crashing down; it is only a question of when. Current workers are keenly aware that they are not going to receive the full benefits they have been promised. The government could let them relinquish their claims on those future benefits in exchange for being exempt from payroll taxes for the rest of their careers. Not only would this move improve the (properly calculated) government’s financial position, but it would spur faster economic growth as the lower marginal income tax rate made the worker in question more eager to sell his labor. Naturally, there would be complications about very young workers who are just starting to pay in and thus who (after the accounting footwork of the ACA) might cost the government money, even in a “present discounted value” accounting sense, if they opted out. Our purpose here is not to issue a white paper policy proposal, but just to spur creative thought on solutions.
8. Reform the tax code to minimize the advantage of employer-provided health insurance. As we’ve explained, the tax code is one of the primary reasons health insurance is tied to employment. A popular suggestion among policy wonks is to level the playing field by giving individuals the right to pay for health insurance with pre-tax dollars. The problem here is that there will always be exceptions to the exceptions, and the government will end up further micromanaging the whole system with its tailoring of the “loopholes.” In any event, a general cut in the marginal tax rates would help all around. The reason people jump at the chance to have their employer pay for health coverage—rather than receive those dollars in salary—is to avoid the high marginal income tax rate. If the top rate were, say, 10 percent, then far more individuals would prefer cash wages.
9. Allow physicians and health care facilities to deduct all charity care from their tax liabilities at market rates, perhaps using Medicare formulas as the initial baseline. We certainly hope our analysis in this book didn’t appear as a denial that there are genuinely needy people who require help from others in order to receive decent medical attention. We simply feel that the best solution involves private charity, rather than government sources.
10. Repeal EMTALA. This would immediately solve the financial crisis of today’s hospitals. However, in conjunction with the other steps suggested, the poor would still receive adequate care. Prices would be far, far lower for comparable quality of care, and the tax code changes would motivate health care workers to offer pro bono services.
“Ooo, I just felt the good cholesterol kick the bad cholesterol.”