Government and Health Care

Economic freedom is key to health care reform

October 17, 2014
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I left the recent West Michigan Policy Forum with a bit of a different perspective than most who attended.

Most of the news blasts from the event focused on the priorities of fixing the roads, a great discussion about term limits in the Legislature, and how much more Michigan spends on education and wages and benefits of state employers. The concept I left with, however, was one of “economic freedom” and what makes a “good” versus a “bad” performing state.

It was both profound and incredibly simple. And let’s face it — as the sixth biggest spending category in our country, health care is a big part of that overall picture. We struggle with this concept in health care because it can’t be all about economics, right? It’s about people, and compassionate care, and … life, too. Right? And it is certainly hard to mention dollars and infant mortality in the same breath and not feel badly. Yes, health care is about economics, but we don’t make widgets, and there are many factors that drive the direction of health care.

That being said, the concept of “economic freedom” set my mind in motion, as my entire professional life has been about advocating for consumer choice in health care. Economic freedom and its impact on the history of our country — reducing federal control and allowing consumers to choose and demand better quality and services — has been a framework that helped make our country great. The $400 billion dollar Affordable Care Act (in itself a bit of an oxymoron) has served to suppress the vigorous pursuit to serve the consumer and put “choice” in the consumers’ hands. While some would disagree — now people can go to the insurance exchange and obtain health insurance — I am referring to a different level of “choice.” As the health care system’s economic picture changes, we see a progressive, powerful emergence of monopolistic-style health care groups and systems that align with key insurance providers to drive and direct consumer choice within their system. In some systems there are penalties for physicians for referring outside the “system,” and again, consumer choice is suppressed.

General principles of economic freedom include low tax rates (very high in Michigan), efficient government spending on essential services (Michigan struggles with this one, too) and the right to work, which we successfully implemented in 2013. Along with these key components of economic success, we also know from our history that our country does its best when consumer voices are heard. I was so inspired by the views of Charles Krauthammer, the keynote speaker at the event, and immediately went to the bookstore to purchase his latest bestseller. Fresh from reading Ben Carson’s “One Nation: What We Can All Do to Save Our Nation,” I reflected on both readings as well as Gov. Rick Snyder’s comments at the WMPF about controlling our attitudes and working as a team.

Could it be so simple? Could being respectful to one another, being driven by a moral compass rather than a self-serving agenda, and doing the right thing really make a difference in the health care economic picture?

Seems to me that this is exactly what we need in health care: one person at a time, one company at a time, making a decision to be fiscally smart while at the same time keeping our health care eye on the consumer need. We have so many regulations and controls in health care. Is it because we can’t be trusted to do the right thing? I don’t mean to sound naïve, but here is an example: Michigan has a “certificate of need” process that health care organizations need to utilize to obtain permission to make major investments such as big dollar equipment needs or major expansions. Not every state has this regulatory process. Why did this system evolve? Couldn’t health care thinkers and decision makers be trusted to make good choices, or at least live with the consequence of a bad decision?

There are many things that seem a bit illogical to me in the health care system when we consider economic freedom and consumer choice. Certificate of need is one of them. Why multi-million dollar, nonprofit, health organizations that are the top employers in our communities don’t have at least some of the tax burdens that the private sector does is another illogical piece of the pie in my opinion.

Economic freedom needs to be a key component of health care reform. Consumer choice, clinical outcomes and performance, and responsible fiscal behavior all should be driving the health care bus, rather than more restrictions and limits on where someone can and can’t receive care. Choice drives competition; competition drives quality and value; and everybody wins.

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