Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“It was, not the wisdom and policy, but the disorder and injustice of the European governments, which peopled and cultivated America.”     Adam Smith,    The Wealth of Nations

August 6, 2007

Monday Open Thread: Healthcare Edition

by Brad Warbiany

Last week, we had several posts related to healthcare. First, this post by guest poster UCrawford, then Ronald Reagan’s take on the issue, and finally yesterday I posted on efforts by private employers to cut costs.

Often, though, we’re on the defensive. We’re asked to defend the current flawed system (something I don’t want to do) against an idealized version of socialized medicine. That’s no way to argue.

So let’s craft a message. In as simple of terms as possible, what three steps would immediately take to fix our healthcare system, if you were President and had Congress ready to do your bidding?

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24 Comments

  1. 1) Abolish the FDA (or at least severely restrict its powers regarding the approval of new drugs).

    2) Enact Bush’s proposal to treat employer-provided health care as taxable income, while adding a tax deduction for medical expenses.

    3) Force medical malpractice attorneys to pay the legal bills of the defendants if their claims are determined to be frivolous.

    It would take more than three steps to reform our health care system, but those three are as good as starting point as any.

    Comment by UCrawford — August 6, 2007 @ 11:06 am
  2. Here are my three steps.

    1) Either eliminate the business tax deduction for health insurance or allow every one a deduction for privately bought health insurance, no matter how expensive. (Obviously, I hate raising taxes, but if I was President with Congress on my side, the tax code would be doomed anyway.) My main goal with this is to get consumers to buy insurance and eliminate as many middlemen as possible.

    2) Eliminate the requirement that drugs be submitted to the FDA and make that an optional procedure. Not only will people be able to try experimental drugs, but it will create an opportunity for a private testing group, like Underwriters’ Laboratory, to step in and provide better service than the FDA while lowering the cost. (A side benefit from this is it might just extend the actually useful part of a drug’s patent life. Instead of being stuck in paperwork for half the patent’s years, the drug can be sold and bring in money, helping that much more to further pay for research.)

    3) Eliminate Medicare and SCHIP and all other federal government insurance programs. If temporarily this means making a cash payment to people that would recive Medicare, I would rather make them purchase insurance privately than be on a government program. Ultimatily the goal is to ween people off taxpayer money and I think it is easier when people see cash rather than benefits with seemingly no cost.

    Overall however, the most important step is not at the federal level. Rather, states need to open the doors and allow insurance to be purchased over state lines. Thankfully one of the candidates in the Republican debate last night mentioned that, even though the federal government should not be involved. Why should someone in New York have to spend so much for insurance including all the bells and whistles when the best policy for them would be the one that paid only for catastrophic emergencies? Health insurance becomes a lot more expensive when states mandate what coverage everyone needs as if everyone were robots or something.

    Comment by trumpetbob15 — August 6, 2007 @ 11:12 am
  3. Actually, I’d like to change my number three answer to trumpetbob’s number three answer. His was better.

    Comment by UCrawford — August 6, 2007 @ 11:22 am
  4. End medical licensing by the state. Alternately, end the cap on the number of doctors licensed.

    Comment by tarran — August 6, 2007 @ 11:46 am
  5. UCrawford,

    Your number three should be part of a much larger plan to adopt the “loser pays” approach. That way not only will doctors be protected from trial lawyers, but everybody else who actually lives and breathes in this country. (Then again, if they could figure out a foolproof way to get money out of dead people, I am sure the trial lawyers would go after them too.)

    Comment by trumpetbob15 — August 6, 2007 @ 12:41 pm
  6. I’d actually be opposed to “loser pays”. Sometimes medical malpractice claims are valid, even if the jury doesn’t find in favor of the plaintiff, and I don’t think people should be penalized and essentially fined for going to court when they have a legitimate beef because they had a worse lawyer than the defense. I do think, however, that in frivolous cases the attorney should be penalized for bringing a case with insufficient legs forward, and that in such an instance it should be the attorney and not the client who pays. It leaves the decision in the hands of the attorney whether to take a case and proceed or not and it puts the consequences on the attorney for making a poor judgment without discouraging people from making legitimate claims solely on the basis they’re afraid they’ll lose.

    Comment by UCrawford — August 6, 2007 @ 1:28 pm
  7. Basically, it would force the lawyers to act as a filter for their cases and would penalize those who don’t.

    Comment by UCrawford — August 6, 2007 @ 1:29 pm
  8. 1. Make tax deferred HSAs available to everyone with NO LIMITS on contributions for the first 10 years. This would give young people starting out on saving a way to build fast and older people starting out the ability to catch up. Eventually would lead to health insurance being detatched from employment.

    2. Scale back the FDA to reduce the cost of drug development and time to market. Allow willing patients more access to opt-in to experimental drugs.

    3. I like the idea of eliminating Medicare and SCHIP too…how about giving people the option of taking the money or the coverage (which do you think most will choose?) Allow current workers to opt-out of the program now–a graduated reduction of the percentage they will pay in with no chance to receive benefits later. Again, what do you think most people will choose?

    Comment by sadcox — August 6, 2007 @ 1:38 pm
  9. 1. Abolish all US payments for medical procedures, whatever the rubric of the program (Medicare, Medicaid, Veterans’ Benefits, etc.).

    2. Abolish all subsidies to hospitals, medical schools, treatment programs, etc.

    3. Abolish the corporate income tax break for insurance coverage, lifting the threshold for income tax qualification as a counterbalance.

    Comment by Joshua Holmes — August 6, 2007 @ 2:40 pm
  10. Joshua,

    I’d argue against removing the V.A., only because it’s very unlikely that private carriers would be able or willing to provide health care insurance to military personnel (especially in the middle of a war) or that they could do so at an affordable price given the risk profile of the customers. In order to maintain a volunteer military the soldiers need to know that health care will be provided to them when they need it, and because national defense is a service the government provides to all citizens I’d argue that the military health care program is part of that. It’s the only case where I’ll argue in favor of socialized medicine, but only because there’s a tangible benefit in it to society at large.

    I also think it’s useful to have an example of socialized medicine around to remind people just what a horrible system it is. Of course, if I thought there was a realistic free market alternative to military health care I would be all in favor of scrapping the V.A. system.

    Comment by UCrawford — August 6, 2007 @ 2:57 pm
  11. UCrawford,

    I’ve been in favor of the loser pay idea for awhile now but I think I like your idea better. If a lawyer knows s/he stands a good chance of losing, s/he will be more selective and as you say act as a filter.

    Comment by Stephen Littau — August 6, 2007 @ 3:11 pm
  12. I think the VA is a little different situation. Soldiers should always be guaranteed healthcare from the government because they served. I would even go further and say that combat veterens should never pay another penny in federal taxes for the rest of their lives. My way of thinking is they have already paid a price and its immoral to ask them to pay more. Individuals who serve during peacetime should not be required to pay taxes while they are serving. Its the very least we could do.

    Comment by Stephen Littau — August 6, 2007 @ 3:18 pm
  13. 1. Remove government mandates on what insurance companies must cover. This would force insurance companies and healthcare providers to actually compete for customers.

    2. Pass the Fair Tax so that tax considerations are completely removed from the equation for employers. Purchasing health insurance should be chosen by the individual just like life, auto, and home insurance.

    3. Eliminate subsidies to hospitals and insurance providers and phase out programs such as Medicare, Medicaid, over a period of years (perhaps a few decades) much like sadcox suggested in for his #1 solution.

    Comment by Stephen Littau — August 6, 2007 @ 3:35 pm
  14. Granted that such a system would be extremely financially beneficial to me, but I don’t know that we should start treating public servants better than we treat the average taxpayer. Soldiers are just doing a job, like anyone else, and very often they’re doing it for intrinsic reasons (patriotism, love of the lifestyle, love of the job) as opposed to extrinsic (good pay and benefits). I think soldiers are decently-compensated overall for the job they do (although cost-of-living-adjustments in some geographic areas need some work) and I think it sets a dangerous precedent to give them a pass on paying taxes simply because they’re public servants doing an important job. It’s not a big step for people to say after that that the same benefits should be given to other government workers doing public service and although you want to be able to attract quality people to government work and pay them decently, you don’t want to make the job too attractive for monetary reasons…that’s part of how government grows. Improving the health care system for soldiers and vets would be nice…giving the soldiers exemption from taxation I think would create issues for us down the road at a minimal benefit to society.

    Frankly, I think the most important thing that we can do for our soldiers, sailors, airmen and Marines is to insure that our politicians don’t take them frivolously into prolonged non-defensive wars that don’t support our interests. Clinton and Bush did a lot more to undermine the readiness and morale of our armed forces than pay issues have.

    Comment by UCrawford — August 6, 2007 @ 3:37 pm
  15. UCrawford:

    I understand your concerns, there is a danger of a slippery slope but isn’t there always? Perhaps such a proposal would have to be very clear that such tax exemptions could only apply to military men and women who have actually been in harm’s way or have suffered some kind of injury while in service to the country. At the very least, Purple Heart recipients should receive the benefit of being exempt from paying federal taxes.

    Comment by Stephen Littau — August 6, 2007 @ 3:47 pm
  16. And on the “loser pays” I wasn’t so much saying that I think the attorney should pay every time he loses, but that I think the judges should be given greater latitude in determining whether or not a case is frivolous and giving them power to have “loser pays” applied to the attorney. The goal would be to minimize the number of frivolous lawsuits and put the burden on the attorneys to do a better job of picking their battles, not to eliminate lawsuits all together…and if you err too much on the side of “loser pays” you’ll end up removing liability from companies. And I do believe that companies should be held responsible for the damage that they do, same as individuals.

    Comment by UCrawford — August 6, 2007 @ 3:52 pm
  17. Stephen,

    We already have a system in place that gives tax-free pay for disability to military personnel who suffer debilitating injuries as well as lifetime medical care. The biggest problem with it over the last couple of years is that the military services are consistently underrating injuries below V.A. standards to avoid paying out (injuries rated below 30% receive no compensation and Army Times ran several pieces noting that soldiers were often given disability ratings 20-40% lower than similar injuries for other government workers), which means that the veteran must often go through a series of appeals with the V.A. (who’ve had their budget cut for the last two years by the Bush administration) to get the money they’re owed. The problems with lifetime care also stem from funding shortages (Bush again, although he’s not the only president who’s cooked the books) which result in a shortage of personnel and services (such as PTSD and mental health counseling). That’s not a problem with the compensation package, that’s a problem with the rating process and government chiseling. It’s also another reason why we should use the military medical system as a cautionary tale for socialized medicine, because these problems are pretty much inevitable with government-provided medical care.

    Comment by UCrawford — August 6, 2007 @ 3:59 pm
  18. One of the Army Times articles had an interesting quote from a government official defending the more stringent rating requirements for the military. He said that if the soldiers were rated for disability by the same standards as other government professions, the government would have to pay out more money than was feasible. The disgusting thing was that the official saw nothing wrong with this logic.

    Comment by UCrawford — August 6, 2007 @ 4:02 pm
  19. If you look at the drugs released recently, they are not life saving drugs. The ones where terminally ill people would be willing guinea pigs. Some of the most effective drugs have patents that have long ago expired. I would assume that at some point the the prices of those would have come down, simply because of volume and the cost of mass producing the drugs has been reduced. I don’t see that significantly happening and the generics which have no R & D cost to recover, still charge high prices. When someone has the retail cost of $10,000 more a year and has been a working class person all of their life. That would be a large chunk of their income or savings. Talk the numbers, not the theory. You see most of the people have worked all of their lives and not ended with the golden parachute you all think you will have. We deficient humans have been frugal and not frivolous. Some have even outlive their golden parachute. I am not talking about gen X, I mean their parents and grandparents. These are still more people than the younger generations and will impact health care regardless if one’s life style have been good or bad. It is wistful thinking if you think you can reduce cost. You may be able to retard the increase in cost, but no one in medicine is going to give up the goose that lays the golden eggs.

    Comment by VRB — August 6, 2007 @ 8:13 pm
  20. VRB,

    You are correct. No one is ever going to give up the goose, which is why the goose should be eliminated. Instead of complaining about drug companies, how about letting the market come in as in every other segment of the economy? Competition will allow the price to fall, as in everything else. Health care is no different, as Lasik has shown. What once had a huge price tag has increasingly come down in price, mainly from insurance not covering the procedure. Once insurance got out of the way, the price came down. Weird how that happens huh, even in health care.

    Introducing competition and eliminating government interference and red tape will eliminate the opportunity for a goose.

    Comment by trumpetbob15 — August 6, 2007 @ 10:22 pm
  21. I’d argue against removing the V.A., only because it’s very unlikely that private carriers would be able or willing to provide health care insurance to military personnel (especially in the middle of a war) or that they could do so at an affordable price given the risk profile of the customers.

    So what?

    In order to maintain a volunteer military…

    I don’t give a shit about maintaining a military, and neither should anyone else who cares about liberty.

    Comment by Wild Pegasus — August 7, 2007 @ 2:37 pm
  22. Wild Pegasus,

    Hmmm, I served in the military and I both care about liberty and despise the need for government, and yet I support keeping both the V.A and the military….so obviously not all people who care about liberty share your view.

    Frankly, I’d love to live in a world where anarcho-capitalism was possible, and where a military wasn’t necessary and where people behaved rationally and accepted the idea of non-aggression and were able to resolve all their differences and disputes without adding violence to the equation. Unfortunately we don’t live in that world, so I accept the need for both a military and a government (at least for now), and I accept that in order to have a functional military we’ll need to provide it with an non-free market medical system. It’s an unpleasant compromise, but then that’s just life, innit?

    Comment by UCrawford — August 7, 2007 @ 3:49 pm
  23. We do need a military for national security and national defenses, but not at its current size. Standing armies are very dangerous since there is a propensity to use them for non-defensive activities.

    In Eisenhower’s famous military-industrial complex speech, the basis for his concerns was the central issue of the “need” for a sizable and continuously standing army. They were necessary to counter the ever present threat from the USSR. Today, the USSR is gone, and the large standing army remains along with the large and influential military industrial complex.

    The founders envision the need for a strong navy at all times, and the president could use naval power as an effective deterrent. Today, the new naval power is nuclear weapons and a strong navy and air force. What we don’t need are the numerous forward bases that we have around the world.

    Comment by TanGeng — August 7, 2007 @ 8:39 pm
  24. TanGeng,

    I think you’ve got a point there, although I believe the military as it currently stands is probably the right size. Right now it’s just completely overcommitted, but that’s also a result of having two consecutive self-absorbed dickweeds in the Oval Office. Both took military adventurism to appalling levels (especially considering the force size), and many of the top generals were opposed to the plans of both all along (Clinton at least largely deferred to his generals by his second term, Bush on the other hand has remained utterly indifferent to outside advice throughout). So with a functional military, there’s always going to be the temptation for a glory hound President to use it. But we have a mission in Afghanistan that I strongly believe is justified and the anti-terror interdictions we do in the Horn of Africa (Djibouti, Somalia) I believe serve a useful purpose to our national defense (not Darfur, though) so I think simply removing our forces there would undermine our country’s safety in the long-term. But the missions in Kosovo, Iraq, and Korea definitely have outlived their usefulness to us and I’m somewhat ambivalent about the need for our presence in Europe (although I think it has its benefits to our national interest, but I’d be interested in debating the need for a drawdown there).

    I don’t buy into the idea that complete military isolationism is the key, as Ron Paul seems to suggest. But I don’t think it would be apocalyptically disastrous for us as so many of his critics claim and I’d rather have Paul’s philosophy than the current one, but I also realize that it’s a lot costlier (in money and lives) to build an Army back up from scratch than it is to maintain it. But Paul’s got a point about how our interference in the internal affairs of other countries creates unacceptable blowback for us. I just think there’s a middle ground answer in there somewhere that nobody’s really debating. Dana Priest for the Washington Post wrote a really interesting book about this topic, “The Mission” that’s worth a read if the guys who run this site ever want to debate the intervention/non-intervention argument.

    Of course this is all miles off the original point of this thread :)

    Comment by UCrawford — August 7, 2007 @ 9:11 pm

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