Friday, August 7, 2009

Sensible Healthcare Reform

I've resisted posting on healthcare reform here for 2 reasons:

1. No one wants to read a 10,000 word rant complete with charts and analogies.
2. I can't find the time to write said 10,000 word rant.

So, I leave it to others with greater powers of brevity. Charles Krauthammer has two suggestions that should be tried before any radical restructuring of the current healthcare system. They will genuinely reduce costs and lessen the influence of government in our lives.

(1) Tort reform: As I wrote recently, our crazy system of casino malpractice suits results in massive and random settlements that raise everyone's insurance premiums and creates an epidemic of defensive medicine that does no medical good, yet costs a fortune.

I'm a lawyer, and even I agree with that. The inability of malpractice insurance companies to predict what crazy awards juries will give leads to astronomical premiums. In addition, it causes doctors to order unnecessary procedures "just to make sure:"

An authoritative Massachusetts Medical Society study found that five out of six doctors admitted they order tests, procedures and referrals -- amounting to about 25 percent of the total -- solely as protection from lawsuits. Defensive medicine, estimates the libertarian/conservative Pacific Research Institute, wastes more than $200 billion a year.

Krauthammer envisions something like the workers' compensation plan to handle malpractice incidents.

Abolish the entire medical-malpractice system. Create a new social pool from which people injured in medical errors or accidents can draw. The adjudication would be done by medical experts, not lay juries giving away lottery prizes at the behest of the liquid-tongued John Edwardses who pocket a third of the proceeds.

The pool would be funded by a relatively small tax on all health-insurance premiums. Socialize the risk; cut out the trial lawyers. Would that immunize doctors from carelessness or negligence? No. The penalty would be losing your medical license. There is no more serious deterrent than forfeiting a decade of intensive medical training and the livelihood that comes with it.

Second, uncouple health insurance from employment and from geography:

(2) Real health-insurance reform: Tax employer-provided health care benefits and return the money to the employee with a government check to buy his own medical insurance, just as he buys his own car or home insurance.

There is no logical reason to get health insurance through your employer. This entire system is an accident of World War II wage and price controls. It's economically senseless. It makes people stay in jobs they hate, decreasing labor mobility and therefore overall productivity. And it needlessly increases the anxiety of losing your job by raising the additional specter of going bankrupt through illness. . . . If we additionally eliminated the prohibition on buying personal health insurance across state lines, that would inject new and powerful competition that would lower costs for everyone.

Good common-sense things to try which will lower the cost of medical care and reduce both the need for, and the cost of, health insurance.