By Sean M. Flynn
August 10, 2017
Only in Washington does anybody say, “If it’s broke, don’t fix it.”
The outcry over our healthcare system has risen to a fever pitch. Hanging in the balance is the health and well-being of millions of our fellow Americans as well as the health and well-being of our local economy.
The Democrats’ attempt at reform hasn’t lived up to expectations. Obamacare has proven to be an unbalanced contraption assembled by lobbyists and special interests. The result? Health insurance premiums have continued to rise; the Obamacare insurance exchanges have collapsed in over half the states that tried them; and even in the states where the exchanges carry on, Obamacare rates push ever higher. Here in San Bernardino County, Covered California rates will rise 17.2% next year.
To be fair, the Republicans’ inability to pass any improvements—after nearly seven years of loudly decrying Obamacare’s failures—ranks nearly as high on the scale of political incompetence and social irresponsibility.
Working families simply cannot afford any more of this kind of “help” from Washington.
Both parties are ignoring two simple reforms that have lowered healthcare costs by 75 percent while providing universal access, higher quality, and coverage for preexisting conditions.
The first is what economists call price transparency. Every healthcare provider should have to publish their prices on the Internet so that people can make fully informed decisions about what they are going to be spending their hard-earned money on. Not only is that fair, it’s also the key step you must take if you want to force providers to have to compete against each other in delivering lower prices and higher quality.
Contrast price transparency with our current system of “hide the prices.” It’s standard procedure to go in for medical treatment—even for something as simple as an urgent care visit—and only find out how much you owe two or three months later, when a mysterious bill with inflated numbers arrives. If you want lower prices and higher quality—especially for those most in need—then you must insist on publicly published prices so that people can shop around and force providers to offer them a better deal.
My second proposal combines comprehensive health insurance with plentiful health savings. Not only is this combination simple, effective, and fair, it’s already working wonders in Indiana, where the State established a special version of Medicaid that has comprehensive health insurance protection for all healthcare spending above $1,100 per year. In addition, the program deposits $1,100 per year into each participant’s health savings account. Thus, each participant is fully protected against any and all medical costs—both those above and below the $1,100 annual deductible.
Financial security is ensured while simultaneously giving participants an incentive to shop around for the best deals. That happens automatically because workers know that any health savings money that they don’t spend is money they get to keep. It rolls over to the next year and is fully portable if they switch jobs.
If you combine price transparency with comprehensive health insurance and plentiful health savings, healthcare spending falls by 75 percent as competition lowers prices and consumers spend prudently.
How big is a 75 percent savings? Well, cutting U.S. healthcare spending by 75 percent would free up $2.5 trillion per year, or about $7,758 per person. That’s enough to pay for the federal deficit ($600 billion), guarantee our Social Security promises to our seniors ($400 billion), and still have over $1.5 trillion per year to spend on any number of important priorities, including schools, infrastructure, national defense, and paying down the federal debt.
The President tweeted that healthcare is complicated. But it’s only complicated because we made it that way. We can make healthcare simple—and fair and low cost—by publishing prices and providing plentiful health savings in combination with comprehensive health insurance. The only thing standing in the way is the incompetence and malpractice of both parties.
It’s time for us to demand effective leadership in Washington, to have elected officials who will stand up to special interests, seek common sense solutions, and fight for what is right, putting people before party. Our lives depend on it.
Sean Flynn is the author of Economics for Dummies, a professor of economics at Scripps College in Claremont, and a candidate for Congress in Congressional District 31, which includes Upland, Rancho Cucamonga, San Bernardino, Redlands, and Loma Linda.