Government Undermines Health Care Quality, While Choice Promotes It
With Health Care Quality Week upon us, afew reminders are in order. First, the U.S. health sector improves health care quality around the world. Even so, government intervention reduces quality here at home. And making quality health care universal requires reforms that let individuals make their own health decisions.
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The U.S. health sector leads all other nationsin medical innovation. Those quality improvements make health care more universal around the world—even in countries that supposedly already had universal health care.
Consider sofosbuvir (brand name: Sovaldi), an “almost universal cure of chronic hepatitis C” with cure rates of 84–96 percent. One studyfound sofosbuvir reduces all‐cause mortality among hepatitis Cpatients by awhopping 50 percent.
Before the U.S. health sector introduced sofosbuvir in 2014, hepatitis‑C patients around the world suffered and died for want of acure. Since 2014, the U.S. health sector has been filling that gap in every nation’s health system.
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There’s no Democratic or Republican way to promote quality. There is only what works, and that’s letting consumers reward quality by making their own health decisions.
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Even so, ahigh degree of government control relative to other developed nations suppresses quality here at home.
Organisation for Economic Cooperation and Development (OECD) datashow that in the United States, government directly or indirectly controls 85 percent of health spending. That’s the 8th-highest share among OECD nations. It’s higher than Canada (71 percent) and the United Kingdom (82 percent)—which have explicitly socialized health systems—and just two percentage points behind highest‐ranking Germany. As ashare of GDP, compulsory health spending in the United States (14 percent) exceeds totalhealth spending in every other OECD nation (highest: 13 percent).
Government uses that control to encourage low‐quality health insurance that makes the problem of preexisting conditions worse.
The average worker changes jobs 13 timesby age 56. In Recovery: AGuide to Reforming the U.S. Health Sector, Iprovide data showing that patients with employer‐sponsored coverage who are in poor health are significantly more likely to end up uninsured—i.e., with apreexisting condition—than similar patients who purchase coverage themselves.
Still, 55 percentof U.S. residents continue to enroll in low‐quality coverage that vanishes when they change jobs. Why? If workers don’t purchase employer‐sponsored health insurance, government penalizesthem with lower after‐tax earnings.
Meanwhile, government health programs literally pay producers notto improve quality.
For at least two decades, the Medicare Payment Advisory Commission has warnedthat in traditional Medicare, “providers are paid even more when quality is worse, such as when complications occur as the result of error.” One study foundthat when patients experience post‐operative complications, Medicare ends up doubling hospitals’ net revenues from $1,880 to $3,629. Medicare rules reward private insurers for skimping on care to the sick.
Medicare’s quality‐improvement efforts consistently failto improve quality. Astudy of Medicare’s Hospital Value‐Based Purchasing program foundthat “in no subgroups of hospitals was HVBP associated with better outcomes, including poor performers at baseline.” Medicare’s attempt to reduce unnecessary hospital readmissions likewise hadzero effect on patient outcomes.
To reward all dimensions of quality, consumers must be free to make their own health decisions.
Congress should free workers to control the $1 trillion of their earnings that employers now use to purchase low‐quality coverage. Letting workers control that money—in new savings vehicles that keep the best parts and discard the worst parts of tax‐free health savings accounts—would constitute amassive and progressive tax cut. Workers would be free to remain in their employer plans but would gain the freedom to put that money toward higher‐quality coverage.
A traditionally Democratic idea would improve quality for Medicare enrollees. Medicare already contains agovernment‐run “public option” that competes against private insurers. Yet the playing field is anything but level. Countless unnecessary rules push enrollees in one direction or the other.
“Public option” principles require eliminating those distortions. That means subsidizing Medicare enrollees with cash and trusting them to spend it, like Social Security does. Giving poorer and sicker enrollees larger “Medicare checks” than healthy and wealthy enrollees would enable all to afford abasic health plan. Any restrictions on how enrollees spend their Medicare checks would violate public‐option principles by favoring one type of health plan over another.
Enrollees could then select plans that reward high‐quality care. Also important, price‐conscious consumers—rather than government price-fixing—would determine how much to reward pharmaceutical innovation.
There’s no Democratic or Republican way to promote quality. There is only what works, and that’s letting consumers reward quality by making their own health decisions.