How Can American Health Care be Reformed?

 

The total cost of health care in the United States is roughly 18% of Gross Domestic Product, almost twice as much as for any other country in the world.  It is common knowledge that health care entitlements such as Medicare and Medicaid are huge budget busters for the federal government and are a big reason why it is so difficult to get government spending deficits under control.  But the cost of private health care is also increasing rapidly and is a big contributor to the stagnation of middle class income in recent years.  In other words, the exorbitant cost of health care has a negative effect on the entire American standard of living and the problem is just getting worse and worse.
Everyone who is concerned about this problem should read David Goldhill’s new book: “Catastrophic Care:  How American Health Care Killed my Father – And How We Can Fix It” and can start with his article in the September 2009 issue of the Atlantic Monthly. He has an approach which should appeal to liberals and conservatives alike.  All American citizens would be covered from cradle to grave but “health care is fundamentally best left to the market to maximize innovation, quality and efficiency”.  The basic principle is that insurance would only be used to cover real risk rather than the certainties of life such as routine illness and the infirmities of old age.
This ideal is accomplished with a “Balanced Health System: health accounts, health loans, and catastrophic insurance with a very high deductible”.  Of course it will be complicated to switch over an entire health care system to a new operating framework.  Of course there are thousands of details to work out.  Of course there will be strong criticism of any such concrete recommendation for radical change.
The point is that our current system is unsustainable.  Do we change it in a deliberate, rational manner or do we rather delay until a fiscal crisis of some sort occurs?  It is encouraging that our national leaders are working together on such issues as immigration reform and stricter gun control.  But our economic and fiscal problems are much worse and more urgent than these social issues.  We need leaders who have the vision and capability to move us forward on addressing our most fundamental problems.

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