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The free market fix for health care

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You might remember last year when Whole Foods CEO John Mackey sparked a furor among progressives for having the temerity to exercise his First Amendment rights and pen an Op-Ed in the Wall Street Journal that proposed an alternative to the big government takeover of health care that Obama/Pelosi and Reid have been pursuing.  Mackey had the gall to point out a central truth that the left seems to ignore time and time again: incentives matter.  If you continue to shield patients from the true cost of care through an overly regulated, overly complex system,  while insisting that they not be financially responsible for all but a tiny fraction of their treatment, you will get abuse of the so-called "health care dollar".  It's a pretty basic concept for those who understand (and accept) that human behavior is sensitive to incentives: when things are perceived as "free" or when someone else is paying, consumption goes up.  When people have "skin in the game" they require more information, look harder at choices and tend to make better (more cost-effective) decisions. Businessmen like Mackey at Whole Foods and Steven Burd, the CEO of Safeway, understand this much better than do the politicians in Washington.  Of course, Mackey and Burd view the health care issue as a problem in search of a rational solution, rather than as an opportunity for government to achieve its ideological goals while taking over one-seventh of our economy.  They both instinctively know that doubling down on government entitlement programs like Medicare and Social Security are not the answer. Burd, in particular, has written a number of outstanding op-eds on how Safeway has used incentives to drive down the cost of their company's health care programs, principally by rewarding healthy behavior and making employees financially responsible for a portion of their out-of-pocket health care costs.  As Burd notes, what Safeway has done has been successful beyond dispute:

As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous improvements each year. The results have been remarkable. During this four-year period, we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.

It is clear to me after watching the recent "Health Care Summit" that neither Obama, Pelosi, Reid or their fellow ideologues on the left are really interested in solving the health care cost problem.  If they were, they would be looking at the real world examples where market-based solutions have worked.

And its not just in the private sector.  Indiana Governor Mitch Daniels -- who has been getting a lot of positive attention recently for his handling of Indiana's fiscal house during the recession -- has penned an opinion piece today that takes the Safeway model and expands it for government workers.  The foundation of Daniels' program are Health Savings Accounts (HSA) that put tax-free cash into accounts for patients to use for their own health care.  It's the kind of market-based innovation that promises to create incentives for patients to ask questions about how much things cost and about how effective a given treatment is (not surprisingly, ObamaCare eliminates the use of HSA's altogether -- all the better to keep patients out of their own health care decisions.)  Daniels describes this as "individually owned and directed health care coverage" -- a description that big government progressives will undoubtedly dislike, since it actually puts power in the hands of people.  But the Indiana experience shows that in health care plans where the patient has "skin in the game" the use of medical care is more judicious and effectively applied.  Indiana state employees enrolled in the plan will save some $8 million in 2010 compared to their co-workers enrolled in the old-fashioned PPO system where the employee pays nothing more than a co-pay.

It should be no surprise that the real solution to rising health care costs is to let the free market work: empower consumers with more information, give them a stake in the process and then let dollars flow to the most efficient, effective providers.  Health care has an example it can look at today in the area of cosmetic surgery -- a fee-for-service market place that is highly competitive.  Patients shop for the best combination of quality and price because they are generally paying out of pocket for the service; the result is a true market where providers actually compete for business.  Its the best way to enforce the twin goals of quality and cost.

One can only hope that Pelosi and her band of merry socialists fail to jam through Obamacare now, and that a new Republican majority in November will enact a series of market-based solutions that will work to make care both more accessible and affordable.

Tax hikes slam Colo. economy

It's folly for Colorado Democrats to raise taxes and then hope for job creation, says John Andrews in the February round of Head On TV debates. But Susan Barnes-Gelt chalks up the state's budget problems to TABOR and other constitutional provisions. John on the right, Susan on the left, also go at it this month over the ongoing national recession, Congress, Sen. Michael Bennet, and former Vice President Dick Cheney. Head On has been a daily feature on Colorado Public Television since 1997. Here are all five scripts for February: 1. TAX HIKES SLAM COLO. ECONOMY

John: You knew the Democrats were in for a tough year when Speaker Pro Tem Kathleen Curry quit the party. Then Gov. Ritter stood down. Someone tell this liberal legislature you don’t raise taxes on employers and then hope for job creation. Colorado can’t afford these dirty dozen Democratic tax bills.

Susan: Sound bites aside, Colorado's budget problems echo California's - TABOR, Gallagher, Amendment 23 plus unfunded federal mandates result in gridlock - Social programs, k-12 and higher ed are being cut to the bone. Tax exemptions are next in line. High unemployment, record foreclosures and no job creation strategies add to the mess.

John: “TABOR, Gallagher, 23.” That’s the emptiest sound bite. Taxpayer’s Bill of Rights with its fiscal guardrails has kept Colorado from becoming California. Our deficit comes from reckless spending by Democrats after TABOR was suspended in 2005. The solution for recovery is to vote for McInnis and Republicans in 2010.

Susan: It doesn't really matter who you vote for in 2010 - Colorado's budget is hamstrung regardless of who is in charge. And the folks who brought you this mess, will give you more of the same. In 2010, throw the rascals out! Vote Hickenlooper!

2. CHENEY AND BIDEN SPAR

Susan: Dick Cheney is the gift that keeps on giving. His command of the Republican stage is great for the Democrats. Even Republican secretary of state Colin Powell disputes his views. Vice President Biden was right when he said it's fine to have your own opinion, but not your own facts.

John: Here’s a fact for you. Muslim terrorist activity on American soil has increased dramatically in the past year since Biden and Obama replaced Cheney and Bush. We are less safe today, and Americans know it. We’re fortunate to have a former vice president with the courage and patriotism to say so.

Susan: Random terrorism has been on the increase since 9/11 - Tied together by the internet and anger, non-state players are multiplying. Cheney's inflammatory rhetoric aids and comforts the enemy. He ought to be tried for treason.

John: You liberals need new talking points. Instead of bashing a hero from the last administration, how about explaining the failures of this administration? Close Guantanamo? Oops, can’t do that. Try the 9/11 mastermind in New York? Can’t do that. Interrogate the Christmas bomber? Can’t do that. Bring back Dick Cheney!

3. SENATE RACE INTENSIFIES

John: What a pathetic sight to see Sen. Michael Bennet and President Obama, both down in the polls, out campaigning together. Republican challenger Jane Norton nailed Obama in a TV ad. Fellow Democrat Andrew Romanoff is polling better than Bennet and might become the nominee. The spirit of Scott Brown stalks Colorado.

Susan: Republican Jane Norton, an avid McCain supporter, is now courting tea partiers. That may work for her in a primary but the bulk of Colorado's voters are centrist independents and her calls to take the country back to separate but equal and kill the Department of Education won't fly.

John: You're half right, Susan. That political arithmetic will help any GOP candidate in the primary and the general election both. Moderate McCain voters, plus Tea Party conservatives, plus all the independents who no longer support Obama, add up to a Republican Senate victory this fall, no matter who we nominate.

Jane Norton may appeal to the far right, but Colorado is fundamentally moderate. She might Michael Bennet - an incumbent with not base. But if - as I predict - Andrew Romanoff if the Dem nominee, pass the marmelade - she's toast.

4. DC GRIDLOCK

Susan: D's and R's in Washington have contributed equally to gridlock. The country is in dire straits and partisan polarization may be filling campaign coffers but is turning off voters left right and center. Every incumbent is in trouble.

John: You get the Oscar for wishful thinking. Incumbent Republicans are looking to take Congress and pick up governorships. Incumbent Democrats are either running as underdogs like Harry Reid or quitting like Evan Bayh. Washington paralysis isn’t my party’s fault. We’re out of power – but that may soon change.

Susan: Check out G O O O H.com - Get Out of Our House.com - Founder Tim Cox is on to something, advocating replacing every Congressperson with a citizen legislator. The movement will catch on as his message goes national. Incumbents - be ware!

John: Another day, another website, yawn. Congress won’t be fired en masse according to Tim Cox’s daydreams. America has a governing party, the Democrats, and an opposition party, the Republicans. Your guys have failed big time. My guys aren’t perfect either, but this may be their year.

5. WEAK ECONOMY CONTINUES

Susan: Wall Street may be recovering but Main Street isn't. A lack of direction at the federal, state and local levels is at the root of America's discontent. The failure of political and civic leaders to communicate effectively and work together to solve problems is the most disturbing aspect of today's turmoil.

John: Obama took office hoping to emulate FDR, and in one way he has. Democrats today, just like in the 1930s, have made a bad economic situation much worse. Obama’s fiscal and regulatory power grab has frightened business away from the hiring and investment decisions that would restore prosperity.

Susan: In times like these, the government is the spender of last resort. Our infrastructure is failing, the US lags in technology, high speed rail, transit and education. Without jobs & innovation, this recession will morph to depression and deficits will grow bigger. The US must be bold.

John: Jobs and innovation, yes. Collectivist bureaucratic central planning, no. Less government and more free enterprise, not vice versa, is the only cure for America’s economic woes. As for last-resort government spending with money borrowed overseas, we need less of that too. Prosperity will return when the politicians butt out.

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