Tuesday, September 27, 2011

Ryan Unplugged

The whole Hoover Institution speech is here.  Some bits and pieces....

...The first step toward true, patient-centered health care reform must be a full repeal of the President’s disastrous new law.

If we engage the nation in a serious debate, and put forward a principled reform agenda, then I think the odds are good that the Republican party will soon find itself with the opportunity to do just that.

But we cannot stop at repeal. We also have a responsibility to fix the broken network of government policies that have made such a mess of health care in America.

...badly designed government policies are to blame for much of what is wrong with health care today, and the solution is clear: We need to transition from the open-ended, defined-benefit approach of the past… to market-oriented, defined-contribution reforms that promote choice and competition.

...At its core, the health care problem is one of inflation, driven by the overutilization of services, dramatic underpayments, and massive inefficiency.

If you look closely, the reason is easy to see: The health care sector lacks most of the basic building blocks of a functioning market.

True dat.

...the disagreement isn’t really about the problem [healthcare inflation]. It’s about how best to control costs in government health care programs. And if I could sum up that disagreement in a couple of sentences, I would say this: Our plan is to empower patients. Their plan is to empower bureaucrats.

Regarding IPAB [the Death Panel]:

You cannot control costs by using price controls, which impose painful cuts within a fundamentally broken framework. Instead, you have to revisit the structure of federal health policy and change the incentives

...Chief Actuary Foster gave evidence in support of this point: “We’ve estimated for many years that competition among plans in a premium-support setting like this could have advantages and lead to somewhat lower costs for Medicare. It can get you to the lowest cost consistent with good quality of care.”

...Under current law, employer-sponsored health insurance plans are entirely exempt from taxation, regardless of how much an individual contributes to their policy.

This tilts the compensation scale toward benefits, which are tax-free, and away from higher wages, which are taxable. It also provides ways for high-income earners to artificially reduce their tax-able income by purchasing high-cost health coverage – which in turn can fuel the overuse of health services.


Under a reformed approach, the government would make a defined contribution to the health-care security of every American, rather than continue to offer open-ended, well-intentioned, but ultimately empty promises. The growth of these defined contributions should be capped, to reduce the inefficiencies that have led health-care costs to spiral out of control. But they should be adjustable so that more help goes to the poor and the sick, while less financial support goes to those who are fortunate enough to need it the least.  ...And with regard to health insurance for working Americans, patient-centered reform means replacing the inefficient tax treatment of employer-provided health care with a portable, refundable tax credit that you can take with you from job to job, allowing you to hang onto your insurance even during those tough times when a job might be hard to find.

And the other very important part:

We should empower patients, not only with resources and choices, but also with information. Patient-centered reform must promote transparency on price and quality – and give patients the incentives to act on this information.

His take:  the Pubbies MUST take the fight to the Dimocrats, hard.  Don't give up, don't wiggle, don't go jelly.

That will work.

More commentary here from Ace/AOSHQ

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