25 November 2009
Successful health care reform doesn't need to start with 2,000 pages of new federal bureaucracies and rules. There are common-sense changes that can improve health and access without new offices, commissioners, rules and federal preemptions. Many changes will be attractive to policy-makers whether they support greater federal involvement or not.
Opponents of large federal bureaucracies taking over health care (and that would include me) are often accused of not wanting to change anything. It's a convenient attack, but it isn't true. People on both the left and right want to make changes to the health care and health insurance systems in this country. Opposing a massive new set of regulations, or supporting them, shouldn't stop us from moving forward on less intrusive reforms.
There are changes that need to be made at the federal level and others at the state level, but they all fall under the category of allowing more choices and more competition.
The easiest reform that could be supported by liberals and conservatives alike is to allow health insurance to be sold across state lines. Under current law, state regulators have a monopoly on health insurance in their state. The mandated parts of coverage, the limits and other rules are set and insurance policies follow that one form.
Insurance might be cheaper in another state because it had fewer mandates, each of which adds to the cost of insurance. Yet, I can't decide that I'm willing to forego coverage for something like stomach surgery or minimum deductible levels.
Still, there is nothing stopping a state from opening its borders to greater competition. In New Hampshire, state Sen. Jeb Bradley has introduced a bill to allow the purchase of insurance policies regulated by someone else. I could buy insurance regulated by Pennsylvania if I thought it fit my needs better. This is not revolutionary, but it is a start toward allowing greater competition and more choices. Economic research has established that more choices are associated with lower insurance premiums.
In New Hampshire, as in most states, basic catastrophic coverage is not allowed. Regardless of deductibles or co-pays, there are dozens of mandates that any policy must cover. I cannot choose a simple stop-loss policy that lets me pay out-of-pocket for routine care, but insures me for costs over a certain amount. An open border law would allow me to choose a policy in a state where the regulation allows different coverage.
Today, large businesses are not subject to state regulation. A large business may be in many states and is exempt from state regulation. That and greater purchasing power result in large groups having rates than are about 20 percent lower than the rates charged to small businesses. One way to help small business would be to allow companies or individuals to band together and form larger purchasing pools. Changes in federal law would make offering health insurance more affordable to many small businesses.
Improving access to health care is also important. Across the country, retail health care clinics are opening up in locations such as Target and CVS. These clinics provide basic health services at a fraction of the current cost. Minnesota Blue Cross found that retail clinics cost only half the price of a physician visit. Obviously, retail clinics aren't suitable for everything, but for some basic services they reduce pressure on the limited number of primary care doctors we have, increase access in underserved populations and offer a convenient alternative.
Many states have regulations that prevent retail clinics from opening. We should adjust any regulations that restrict these clinics.
One of the benefits of retail clinics is that their prices are all conveniently posted. Patients know going in exactly how much a flu shot will cost, for example. This sort of transparency would be helpful in other areas of health care. Florida, for instance, has a Web site that lists the price of every prescription at every pharmacy in the state.
None of these changes is radical, and none will fix everything wrong in health care. Yet each is a sensible improvement, regardless of how you feel about national health care efforts.
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.