View the introduction, conclusion, and press release/summary.
Related event on January 20: "Fixing the Health Care System"
Authors' Wall Street Journal Oped: "Keep Government Out"
America’s health-care system is the envy of the world, but it faces serious challenges. The costs of care are rising rapidly, the number of uninsured Americans is at an all-time high, and public dissatisfaction is steadily increasing. How can we preserve the strengths of our current system while correcting its weaknesses? Three of America's leading health-care scholars answer that question in Healthy, Wealthy, and Wise.
Poorly conceived federal tax policies, insurance regulations, and barriers to entry have distorted health-care markets and inhibited competition. John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler propose five key policies to build a better health-care system: (1) health-care tax reform, (2) insurance reform, (3) improvement of health-care information, (4) control of anticompetitive behavior, and (5) malpractice system reform.
Together, these changes would harness the power of markets to deliver better health care to Americans. These reforms would strengthen consumers' ability to be cost- and value-conscious shoppers, while promoting quality and innovation in health care, pharmaceuticals, and medical technology. And, by cutting the cost of care by $60 billion per year, these reforms would make health insurance affordable for at least 6 million--and perhaps as many as 20 million--uninsured Americans.
John F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Institution, Stanford University. R. Glenn Hubbard is the dean of the Graduate School of Business at Columbia University 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 and a senior fellow at the Hoover Institution, Stanford University.
"Healthy, Wealthy, and Wise clearly explains what we must do to transform health and health care in America. The authors’ proposals will undoubtedly improve the quality of health care, insure more Americans, and save billions of dollars. Every policymaker in government and every decision maker in the corporations that pay for so much of America’s health care should read this important book-and then act on its recommendations."
--Newt Gingrich, former Speaker of the House of Representatives and founder of the Center for Health Transformation
"This thoughtful and comprehensive set of proposals for addressing the failings of health-care markets, and the careful analysis of their likely impacts on spending, the uninsured, and the federal budget should be required reading by all participants in the health-care policy debate. These proposals provide a map of the roads that must be traveled to make our health-care markets work more efficiently and equitably, and forestall greater government intervention."
--Robert D. Reischauer, president of the Urban Institute
"It is well known that the tax code distorts the way our health-care markets work and encourages wasteful spending. Healthy, Wealthy, and Wise does an exemplary job of making a frontal attack on this problem. It proposes fundamental reforms to the tax code that the authors argue, persuasively, will lead people to make better choices about their health- care spending. The result would cut spending and promote greater competition based on price and quality."
--Mark V. Pauly, Bendheim Professor; professor of Health Care Systems, Business and Public Policy, Insurance and Risk Management, and Economics, Wharton School of Business, University of Pennsylvania
Table of Contents
Acknowledgments
Introduction
1. The Challenge: Obtaining High-Quality, Affordable Health Care
The Good: Innovation
The Bad: Excessive Costs and Wasteful Spending
The Ugly: Uninsurance, the Managed-Care Backlash, and Medical Errors
2. Five Policy Reforms to Make Markets Work
Reform Taxation of Health-Care Expenses
Full Deductibility of Health-Care Expenses
Modified Health Savings Accounts
Tax Credits for Low-Income Individuals
Reform Regulation of Markets for Health Insurance
Foster Nationwide, Portable Health Insurance
Subsidize Insurance for the Chronically Ill
Expand Provision of Health Information
Control Anticompetitive Behavior
Reform the Malpractice System
Study the Tax Preference for Nonprofits
3. Impacts of Proposals on Health-Care Spending, the Uninsured, the Federal Budget, and the Distribution of Tax Burdens
Effects of Reforms on Health-Care Spending
Tax Deductibility
Tax Credit
Insurance-Market Reform
Malpractice Reform
Summary and Discussion
Effects of Reforms on the Uninsured
Tax Deductibility
Tax Credit
Insurance-Market and Malpractice Reform
Summary and Discussion
Effects of Reforms on the Federal Budget
Tax Deductibility
Tax Credit
Insurance-Market and Malpractice Reform
Subsidy for the Chronically Ill
Distributional Impact
Conclusion
Appendix A: Estimating the Impact of Policy Reforms on Health-Care Spending
Appendix B: How Much Must Coinsurance Rates Rise in Order for Spending to Decline by 6 Percent:
Appendix C: Estimating the Impact of Policy Reforms on Uninsurance
Appendix D: Derivation of the Elasticity of Total Health-Care Spending with Respect to the After-Tax Price of Out-of-Pocket Spending
Appendix E: Estimating the Impact of Policy Reforms on the Federal Budget
Tax Deductibility
Tax Credit
Insurance-Market and Malpractice Reforms
Notes
About the Authors
Index
