Over the course of this year, Senator Hillary Clinton has outlined the major components of her health-reform plan. She laid out how she would reduce rising health-care costs; how she would improve the quality of care; and lastly how she would achieve universal insurance coverage.
Senator Clinton has clearly demonstrated that she is the most articulate and knowledgeable Democratic candidate on health. She addresses the most critical problems we face and she outlines the right long-term goals that we should strive to attain. Where she is mistaken, however, is how we actually get there. Despite her best rhetorical attempts to deny this fact, Senator Clinton proposes a series of changes that are driven not by consumers and the marketplace, but by government bureaucrats.
Senator Clinton was exactly right to focus first on rising health-care costs. Nearly all other reform plans focus on the consequences of rising costs — and not on the root problem. By seeking to make health care more affordable, Senator Clinton is trying to cure the disease and not just treat its symptoms.
Reducing costs and improving quality go hand in hand. We can do both by building a 21st-century intelligent health system that promotes prevention, wellness, and early health; empowers consumers with both rights as well as responsibilities; better coordinates care for those with chronic disease; incentivizes the use of health information technology; distributes cost and quality data; and identifies and uses evidence-based care.
But transforming health cannot stop there. Expanding insurance coverage to every American is just as important — for not only financial reasons but for moral reasons as well.
Walk in the shoes of someone without health insurance. They live in fear every day. Fear that their child will get sick but can’t see a doctor. Fear that their spouse will have a serious accident that prevents them from working. And the constant fear that they are one step away from medical bankruptcy.
The same goes for people who are denied coverage or who cannot afford insurance but earn too much to qualify for a public program. Health insurance coverage is always out of reach. As a result, they have virtually no access to a primary care doctor, are at risk of becoming sicker and may die needlessly. The Institute of Medicine estimates that the lack of health insurance actually kills 18,000 Americans every year.
America should not accept such failure.
But to reach the goals of reducing costs, improving quality, and achieving 100-percent coverage, consumers and a free and fair market must be the engine of change — not government.
Washington-controlled bureaucratic health care is incapable of creating the real change that we all want to achieve — it will make our problems far worse.
Take the issue of health-information technology. We at the Center for Health Transformation have worked closely with Senator Clinton on modernizing health care through the widespread adoption of electronic health records, electronic prescribing, and other information technologies. All have proven to saves lives and saves money.
But to accomplish this worthy goal, Senator Clinton puts forth a heavy-handed federal mandate that in order to participate in a government health program, such as Medicare, doctors, and hospitals must adopt information technology. This requirement would affect “nearly all” health-care providers in the country.
To help pay for the technology, Senator Clinton proposes the creation of what would amount to a federal entitlement program for providers, costing $3 billion. This “one-time financial assistance” will be “phased out” over time. But as Milton Friedman once said, there is nothing so permanent in Washington as a temporary government program.
The right approach to drive adoption of IT is to use market forces and incentives.
We should fundamentally change the entire model of paying doctors, hospitals, and other providers. The current approach is transaction-based, where providers are paid for delivering care, regardless of its outcome. Payment is exactly the same for a doctor who uses cutting-edge technology to deliver better care and a doctor practicing medicine from the 1950s. By moving from a transaction-based model to one that pays for quality and outcomes, we will incentivize the use of tools that are necessary to deliver better quality care, like electronic health records.
By giving consumers both the financial incentive and access to information about which providers deliver better care, we will encourage consumers to seek out the highest-quality, lowest-cost providers. We will simultaneously encourage providers to deliver better care to attract more patients. This is how a market should work.
There are many other areas where Senator Clinton rightly identifies the problem to solve and what the long-term goal should be. But no matter how many times she uses the word “choice,” her plan is in reality based on the power of the federal government.
To bring down the cost of prescription drugs, Senator Clinton proposes that the federal government negotiate drug prices through Medicare. When you are the world’s largest purchaser and regulator of health care, you do not negotiate lower prices, you coerce lower prices. And drug makers will most certainly make up for the lower prices government pays by raising drug prices for the rest of the country. We at the Center for Health Transformation have outlined a market-based approach to drug purchasing that we estimate could reduce prescription drug costs by 20 to 40 percent.
Furthermore, Senator Clinton would “limit direct-to-consumer advertising” by drug makers, not only restricting free speech but keeping the public in the dark regarding new breakthroughs. In health care, we need more consumer education and awareness, not less.
To reform Medicare, Senator Clinton would cut funding and virtually eliminate Medicare Advantage, the most innovative, free-market based part of Medicare. By allowing private insurers to compete for seniors, Medicare Advantage has reduced projected spending and delivered more benefits to seniors. This approach should be expanded into other areas of Medicare, not eliminated.
To expand coverage, Senator Clinton would require that large employers provide insurance coverage to their employees, a benefit that employers have voluntarily offered for decades. She would limit how much private insurers can spend on administrative costs and marketing. She would mandate what benefits private insurers must offer and which services they must cover. She would introduce a government insurance plan into the private market that will be priced not according to laws of competition but according to what the government defines as “affordable.” And for all insurance products, she would tie the price of insurance premiums to an individual’s income. Most health-care pricing is already irrational, but artificially creating a government price and requiring all other insurance products to be priced according to one’s ability to pay completely removes all market forces from the equation.
To implement all of these mandates, Senator Clinton would spend $110 billion every year. (That makes Senator Obama the fiscal conservative on the Democratic side, whose health-care plan “only” costs $65 billion a year.) And to pay for all this, Senator Clinton would raise taxes for millions of Americans.
The right way to transform health in America is not through Washington-controlled bureaucratic health care. And we at the Center for Health Transformation have laid out a comprehensive outline on creating a market-based and consumer-centered system that saves lives and saves money for all Americans.
But despite the differences with Senator Clinton on how to reach goals that we agree with, her willingness to concentrate on policy issues and proposed solutions is important. Part of the greatness of living in a free society is the ability to hold differing opinions and to openly debate the merits of real solutions. It is only through constructive dialogue that addresses the real problems of our time will we arrive at collaborative solutions that save lives and save money. And that is something we should all be able to agree on.
– Former Speaker of the House Newt Gingrich is the founder of the Center for Health Transformation. David Merritt is a project director at the Center.