March 10 2014
By Grace-Marie Turner
Conservative political leaders and free-market policy analysts painted a picture of what true market-based health reform would look like if consumers had more control over choices in a truly competitive market during a conference at the National Press Club in Washington, DC, on February 27.
The conference on “Fresh ideas and a new vision for health reform” was co-sponsored by 11 market-oriented think tanks to describe the vision, policy, and politics of free-market health reform.
The first panel featured a discussion, moderated by former CBO Director Douglas Holtz-Eakin, with leading members of Congress who have introduced major health reform legislation.
While reform proposals offered by these Republican leaders differ, they all start with repealing ObamaCare and share many common themes of reform: allowing people freedom to choose the insurance policies they want, help for people with modest incomes in purchasing coverage, a strong safety net, allowing portability of health insurance, and competition rather than government edicts to create more choices of more affordable insurance. Most importantly, all are organized around market-based reform principles.
Below is the video from the Vision panel featuring:
Sen. Richard Burr, NC
Rep. Michael Burgess, M.D., TX
Rep. Tom Price, M.D., GA
Rep. Phil Roe, M.D., TN
Rep. Steve Scalise, LA, and Chairman, Republican Study Committee
*Moderated by Douglas Holtz-Eakin of the American Action Forum
Some key quotes from the Vision session:
Sen. Burr: At the end of the day, we all agree that the ACA has to be repealed to move forward, and we all agree that our objective is to create competitive markets and drive down healthcare costs for all Americans.
Chairman Scalise: One of the basic tenants that we all agree upon is that patients and doctors should be the ones that make healthcare decisions…Doing things like allowing people to buy health insurance across state lines — basic common sense reforms — implementing basic medical liability…allowing people to have increased health savings accounts, having equalized tax treatment [of health insurance]. These are all areas where we have strong agreement.
Dr. Roe: We’ve destroyed the physician patient relationship in this country. We have to [put]…the physician and the patient, back in charge. We’ve got to let them decide what’s in their best interest, not the government.
Dr. Burgess: Every one of us up here believes that whatever happens, it needs to be patient centered; whatever happens, it needs to be sensitive to market forces.
Dr. Price: The president’s narrative is, it’s either Washington in charge or insurance companies in charge…We believe there’s a third way, a better way, which is that patients and families and doctors are in charge of health care.
Chairman Scalise: It’s not enough to just say you’re against the president’s law…I’ve also said and put on paper what I’m for, and over 125 members of Congress have cosponsored this bill.
Dr. Price: Rebuilding trust with the American people is the first step to true health reform… Nobody should be priced out of the market because they get a bad diagnosis.
Dr. Burgess: The president has embraced buying across state lines. Let’s welcome the president’s vision. Let’s establish that principle so everyone can get the benefit of that provision.
Dr. Roe: If we put forward a bill…it has to be a bipartisan bill. I’ve never understood…why healthcare is a Republican or Democrat issue…I’ve never operated on a Republican or Democrat cancer in my life, I’ve never seen a Republican or Democrat heart attack.
Dr. Price: The way you get a bipartisan product is to have a process that isn’t behind closed doors and [pre-]determined before it begins. That’s what we’re hopeful for in the House and the Senate as well.
Sen. Burr: The question is do you create a real marketplace that fosters competition? … It’s innovation that’s going to allow us to continue the level of care and to have the breakthroughs that we need to financially find a sustainable health care model.
(Sen. Burr is co-sponsoring with Sens. Orrin Hatch and Tom Coburn thePatient Choice, Affordability, Responsibility, and Empowerment (CARE) Act. Chairman Scalise and Dr. Roe are original sponsors of The American Health Care Reform Act. Dr. Price authored and introduced the Empowering Patients First Act.)
Policy: Ten policy experts from the major market-oriented think tanks discussed the concept of real insurance, including portability and tax fairness, protections for those with pre-existing conditions, and a strong safety net.
Jeffrey H. Anderson, Ph.D., 2017 Project
Joseph R. Antos, Ph.D., American Enterprise Institute
James C. Capretta, Ethics and Public Policy Center
John C. Goodman, Ph.D., National Center for Policy Analysis
Hadley A. Heath, Independent Women’s Forum
Paul Howard, Ph.D., Manhattan Institute
Merrill Matthews, Ph.D., Institute for Policy Innovation
Thomas P. Miller, J.D., American Enterprise Institute
Nina Owcharenko, The Heritage Foundation
*Grace-Marie Turner, Galen Institute, Moderator
Some key comments:
Paul Howard: In a consumer driven system, the sellers chase you, and they find ways of bundling their services and products together in a way that makes sense to the consumer…The insurance companies chase us, present us with bundles of products that fit the stage of life that we’re in, and make it simple to understand, because that’s the way every other consumer market works.
Merrill Matthews: We’ve been transitioning to a system where the patient is going to be the center, in part because patients have access to so much knowledge now. Drug companies, hospitals, and other are going to have to cater to the patient. That’s not something to be afraid of – that’s something to be embraced.
Joe Antos: Consumer directed does not mean that the average person is cast adrift without any resources or any help or real understanding….Insurance companies are in the business of selling a product that people want to buy. That’s where we would go.
Jim Capretta: A lot of people don’t want to be active consumers in health care…but that’s not necessary for a marketplace to work well. There’s lots of economic literature that shows that as long as you’ve got 10 to 15 percent of the population that are leaders, navigating the way, the rest of the marketplace can follow.
Tom Miller: The appeal [of defined contribution] to employers, frankly, is to not be tied up as much in the intricacies of complying with every set of regulations and have a little bit more of a controllable understanding of what its compensation costs are…It opens up possibilities for a much more vibrant and vigorous marketplace.
Nina Owcharenko: There should be no reason why, just because someone’s poor, they’re put into a really poor program [like Medicaid]. We should all be in the same health insurance system, and it should be market-based and consumer driven, whether you’re rich or poor or middle class.
John Goodman: I’d like for all of you to imagine a world in which there is a real market for health insurance. The only role for government is just the traditional common law. So what would it look like? It would look nothing like what we have today because what we have today is the artificial result of an enormous amount of regulation…[Instead, we need] a real market where insurers have incentives to compete on price and quality…[including] change of health status insurance which would naturally evolve in a free market.
Hadley Heath: When coverage is mandated for inclusion (in insurance policies,) that means everyone pays for it. That doesn’t mean that it’s free – absolutely not. In fact, it means that the costs of those treatments or those drugs are hidden from consumers…[Mandating benefit packages] is not beneficial to women who want a market to choose the best treatments that are right for them and their families. I would support moving more of those treatments out of mandated coverage. If you want to pay for it through your insurance, God bless you. If you’d prefer to pay for it on your own, that should be an option. And when more consumers do that you’ll see more downward pressure on price.
Jeffrey Anderson: We would allow people to get their tax break for employer provided insurance…And then, to equalize the treatment in the tax code, we would offer a tax credit to people buying insurance in the individual market…Liberty would be secured, costs would drop, and anybody who wanted to buy coverage would be able to get it.
Politics: Journalist Ezra Klein and Avik Roy, opinion editor of Forbes and Manhattan Institute senior fellow, have an in-depth discussion about the health policy debate, with an interesting mix of left-right perspectives.
Some key comments:
Ezra Klein: I think that in some ways Republicans this year haven’t gotten enough credit. The big change to me in the Republican Party this year has been, this is kind of the year that the Republican Party is, or at least major players in it, are getting specific. So there were a number of years after ObamaCare when Republicans shied away from offering any specific plan…
Ezra Klein: I thought Wyden-Bennett was a better approach than ObamaCare…There was a policy proposal put forward by Sen. Ron Wyden of Oregon and then-Sen. Bob Bennett of Utah – Wyden, a Democrat, and Bennett, a Republican…
In some ways it was similar to ObamaCare, and for that matter to [Budget Chairman Paul] Ryan’s and [Sen. Tom] Coburn’s plan and others. It had a bunch of exchanges, it had subsidies that were coming through the tax system, and it had an individual mandate.
…It dissolved Medicaid entirely and moved that over to the private insurance system. It had employers convert the amount of money they spend purchasing insurance for their employees and essentially give it to the employee to purchase insurance in the exchanges. So the exchanges became, exempting Medicare and VA and a couple other pockets, really the central way people would purchase health insurance in this country.
It was a much more unified approach; it was a lot less fractured than ObamaCare and our current system. As a general point, I prefer approaches that are less fractured. I like multi-payer systems more than I like single-payer ones just because I think competition between insurers is important. But I would like much larger exchanges. I’m not a huge fan of state regulation of health insurance; I would like to see national exchanges. So I would do something that had a little bit more coherence to it, but I wouldn’t get elected because of that.
Avik Roy: The thing about ObamaCare, with the insurance exchanges in ObamaCare is that they’re regulated in such a way that they massively drive up the cost of the insurance plan. Whereas if you take part D for example, the drug benefit in part D, by using a very modern insurance plan that was very much like what you have available in the private sector, drove down costs because insurers could have things like copays and deductibles and steer people towards generic medications … The thing you’re still stuck with, with ObamaCare, is a system that has made health insurance for the unsubsidized population less affordable, not more affordable.
Conference co-sponsoring organizations: American Action Forum, the American Enterprise Institute, the Ethics and Public Policy Center, the Galen Institute, The Heritage Foundation, the Independent Women’s Forum, the Institute for Policy Innovation, the Manhattan Institute, the National Center for Policy Analysis, the Pacific Research Institute, and the 2017 Project.