Healthy, Wealthy, and Wise 5 Steps to a Better Health Care System, Second Edition

by Cogan, John F.; Hubbard, R. Glenn; Kessler, Daniel P.

• ISBN13: 9780817910648
• ISBN10: 0817910646
• Edition: 2nd
• Format: Hardcover
• Copyright: 2011-03-01
• Publisher: Hoover Institution Press

Summary

Health care in the United States has made remarkable advances during the past forty years. Yet our health care system also has several well-known problems: high costs, significant numbers of people without insurance, and glaring gaps in quality and efficiency-and the Patient Protection and Affordable Care Act of 2010 is not the answer. This second edition of Healthy, Wealthy, and Wisedetails a better approach, offering fundamental reform alternatives centering on tax changes, insurance market changes, and redesigning Medicare and Medicaid. The book proposes five specific reforms to improve the ability of markets to create a lower-cost, higher-quality health care system that is responsive to the needs of individuals, including increasing individual involvement, deregulating insurance markets and redesigning Medicare and Medicaid, improving availability and quality of information, enhancing competition, and reforming the malpractice system. The authors show that, by promoting cost-conscious behavior and competition in both private markets and government programs such as Medicare and Medicaid, we can slow the rate of growth of health care costs, expand access to high-quality health care, and slow down runaway spending.

Author Biography

John F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Institution, Stanford University. R. Glenn Hubbard is the Dean and Russell L. Carson Professor of Finance and Economics, Graduate School of Business, and a professor of economics at Columbia University. He is also a research associate at the National Bureau of Economic Research and a visiting scholar at the American Enterprise Institute. Daniel P. Kessler is a professor of economics, law, and policy at the Stanford University Graduate School of Business; a senior fellow at the Hoover Institution, Stanford University; and a research associate at the National Bureau of Economic Research.

Table of Contents

Preface to the Second Edition	p. ix
Acknowledgments	p. xiii
Introduction	p. 1
The Challenge: Obtaining High-Quality, Affordable Health Care	p. 9
The Good: Innovation	p. 9
The Bad: High Costs and a Large Uninsured Population	p. 14
High Costs: No Easy Answer	p. 14
The Uninsured Population: Many Causes, Uncertain Consequences	p. 19
The Ugly: Backlash against Markets and the Misguided Policy Response	p. 23
The Backlash against Markets	p. 24
The Misguided Policy Response	p. 25
Five Policy Reforms to Make Markets Work	p. 31
Increase Individual Involvement in Health Care Decisions	p. 33
In Private Markets, Reform Taxation of Health Spending	p. 34
Increase Cost Sharing in Government Programs	p. 49
Deregulate Insurance Markets and Redesign Medicare and Medicaid	p. 52
Deregulate Insurance Markets	p. 52
Redesign Medicare and Medicaid	p. 63
Expand Provision of Health Information	p. 66
Control Anticompetitive Behavior	p. 67
Reform the Malpractice System	p. 69
Study the Tax Preference for Nonprofits	p. 74
Impacts of Proposals on Health Care Spending, the Uninsured, the Federal Budget, and the Distribution of Tax Burdens	p. 77
Effects of Reforms on Health Care Spending	p. 78
Tax Deductibility	p. 79
Tax Credit	p. 81
Insurance-Market Reform	p. 81
Malpractice Reform	p. 82
Summary and Discussion	p. 82
Effects of Reforms on the Number of Uninsured	p. 84
Tax Deductibility	p. 85
Tax Credit	p. 85
Insurance-Market and Malpractice Reforms	p. 85
Summary and Discussion	p. 86
Effects of Reforms on the Federal Budget	p. 88
Tax Deductibility	p. 88
Tax Credit	p. 90
Insurance-Market and Malpractice Reforms	p. 90
Subsidy for the Chronically Ill	p. 90
Summary and Discussion	p. 92
Distributional Impact	p. 93
Conclusion	p. 97
Estimating the Impact of Policy Reforms on Health Care Spending	p. 107
Estimating the Impact of Policy Reforms on Uninsurance	p. 117
Derivation of the Elasticity of Total Health Care Spending with Respect to the After-Tax Price of Out-of-Pocket Spending	p. 121
Estimating the Impact of Policy Reforms on the Federal Budget	p. 125
Notes	p. 133
About the Authors	p. 147
About the Hoover Institution's Working Group on Health Care Policy	p. 149
Index	p. 151
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Excerpts

“In our view,the argument for increased public intervention is seriously flawed. . . . The unintended consequences of a handful of long-standing public policies are in large part responsible for the problems of the health care system.”—Introduction, pg. 4