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Discussion: (8 comments)

  1. Wow! is he actually SUPPORTING the CONCEPT of govt-sanctioned Exchanges?

    Holy Bat CRAP!

  2. While it begins to add competition back to the health care system, the other part of the inefficiency of th USA system is requiring prepaid health care administered by an insurance system. Move to a true insurance model with say an HSA based system and all of the administrative costs on both the MD and insurance co sides drop. If you keep prepaid health care the MD’s still have a 40-60% overhead to deal with in order to get paid. Once consumers are paying with HSA $ their incentive to shop around and the ability to pay as service is provided will drop prices and increase quality while making fraud more difficult to hide.

    1. always found it curious since we already allow HSAs .. why they have not revolutionized health insurance in general and I can only surmise that tax-free, comprehensive health care benefits are “outcompeting” HSAs.


      so.. what would happen if the tax-free subsidy for employer-provided health insurance went away?

  3. Market forces work well in health care in many respects, but there is an 800-pound gorilla here which the Swiss understand (as does Avik Roy) but the author here seems to forget. Much of what goes into a health insurance premium is what the insurer has to pay the doctors and hospitals for services for its enrollees. When lots of insurers are trying to compete in a market with a few dominant hospitals, for example, the hospitals can essentially act as monopolies (“You insurance company X, I won’t take your subscribers unless you pay me $100,000 for a hip replacement surgery,”). Research has shown that premiums are actually lower in the US when you have fewer insurance companies competing for exactly this reason – they have more negotiating power vs. the hospitals.

    Switzerland has solved this problem (as has Medicare and Medicaid) by setting hospital and physician prices. They also set a basic benefit package. That frees up the insurers to compete on service, efficiency and lower administrative costs. In the US, until we solve that issue, dumping Medicare and Medicaid folks into the exchange will raise costs enormously because Medicaid pays hospitals and docs half of what private insurers do (and Medicare, about 3/4ths).

  4. Or would shifting to a “freemarket” system mean healthcare costs rise while quality decreases as greedy executives cut costs (cut corners) and award themselves with bonuses and raises while manipulating the regulatory system to benefit their industry.

    Not that history repeats itself or anything…

    1. not that we could not repeat Singapore’s history with health care either.


  5. One more thing: remove most mandated coverages. Allow consumers to self-insure the first $5000/year for all outlays. Don’t require policies to pay for acupuncture or talking psychotherapy or experimental (quack) therapies.

    It’s mandated coverage that is boosting my premium from $295/month now to $587 under PPACA.

    1. What ACA is going to do – if it succeeds, is essentially destroy employer-provided health insurance and many companies are more than willing to let it happen because long before ObamaCare – the costs of providing health insurance as a “benefit” were skyrocketing – anyhow.

      Employer-provided health insurance is as much a dinosaur in the global economy as defined benefit pensions were.

      American companies are competing against global competitors that have no embedded health insurance costs in their products.

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