This is the second part of a two-part post discussing the current state of health reform and where we should go from here. Part I examined the effects of the ACA and progressive reform initiatives. Part II below outlines a market-driven path forward.
In part I of this post, we described post-Affordable Care Act (ACA) consumer challenges and changes in health plan market dynamics, along with progressive policy responses. In part II below, we explore flexible, market-driven alternatives. The renewed national health care debate represents a conflict of visions of how to create better value: government central planning versus patient-centered, consumer-driven competition. With centralized payment and coverage decision making now in vogue, policy makers cannot ignore the limitations of central planning experienced in other national systems, such as Britain and Canada.
During the 2018 flu season, for example, the British National Health Service (NHS) cancelled 50,000 elective operations and asked families to take their elderly relatives home from the hospital, increasing wait times for patients and family caregiving burdens. Centralized systems also struggle with administrative operations: After the rollout of the NHS pay-for-performance program for primary care practitioners, it was later revealed that almost 3.6 million fake or deceased patients were registered, costing the British government more than half a billion pounds annually.
The COVID-19 pandemic has proved no exception, as British per capita mortality remains among the highest among economically advanced countries. Faced with COVID-19, the NHS declined to test symptomatic, exposed clinical staff; bungled a launch of centrally focused contact tracing application, and organized a pandemic response characterized as “offline” by the editor-in-chief of the Lancet.
America’s patients and physicians remain frustrated, creating an opening for practical alternatives. The time is ripe to transform the existing third-party payment arrangements that characterize both private and public insurance and to finally resolve the problem of the uninsured, while deploying the market forces of choice and competition to drive cost control. Market-driven approaches based upon defined-contribution financing (premium support), the states as insurance laboratories, and addressing the employer-sponsored insurance (ESI) tax exclusion would all serve to increase competition and engender insurance affordability and portability.
Premium Support: Flexible Support Across Markets
Under current law, total ACA spending is projected to amount to approximately $1.6 trillion over 10 years. It is composed of federal assistance for health insurance coverage (premium and cost-sharing subsidies), as well as the subsidies for Medicaid expansion for childless adults. Congress could transition direct subsidies of health plan products into state-managed funding pools for direct financial assistance to…
Read More: Choice, Competition, And Flexibility, Part II: Market-Driven Alternatives To