Steps Toward Fixing Health Care

 David Stockman discusses the critical issues facing the U. S. health care system, highlighting the need for significant reform. Stockman references comments made by former President Trump, emphasizing the ineffectiveness of the current health care payment mechanism and suggesting that direct payments to consumers could lead to better health care outcomes.

1. Current Health Care System Flaws:

• The U. S. health care system's payment model is described as inefficient, opaque, and overly bureaucratic.

• The third-party payment system disconnects consumers from the costs of their medical care, leading to increased expenses and lack of transparency.

2. Call for Direct Payments:

• Trump proposes returning health care funding directly to the people, allowing them to purchase their own insurance and thus reducing reliance on large insurance companies.

• Such a shift is seen as a way to empower individuals and foster competition in health care.

3. Merit of Individualized Care:

• Stockman argues for a more individualized approach to health insurance, contrasting it with the current "community-rated" underwriting that lacks risk differentiation.

• He emphasizes the need for consumers to realize the true costs of health services, fostering responsible usage and price sensitivity.

4. Impact of ObamaCare:

• The article criticizes the ObamaCare framework for standardizing coverage and eliminating risk-based pricing, which has resulted in inflated premiums and unsustainable costs.

• The system creates a reliance on government subsidies to make plans affordable, without addressing the root causes of rising prices.

5. Statistics on Health Spending:

• Stockman cites staggering growth in health care spending, showing an increase from $283 billion in 1960 to over $5 trillion in 2024 (adjusted for inflation).

• A significant portion of personal medical care spending (82%) is funded through third-party payers, obscuring the true costs from consumers.

6. Medicaid and Medicare Insights:

• The author discusses the inefficiency and lack of real insurance characteristics within Medicaid and Medicare, where most costs are absorbed by the government and little is paid directly by consumers.

• Free access to health care under these programs contributes to increasing costs and does not promote cost-awareness among beneficiaries.

7. Essential Health Benefits and Coverage Limits:

• Current insurance plans are mandated to include extensive benefits leading to higher premiums across the board.

• Compliance with these mandates results in an unsustainable financial burden on taxpayers to fund subsidies for plans that fulfill regulatory requirements.

8. Recommendations for Reform:

• Stockman suggests that significant reform is necessary to halt the rising costs associated with the current health care system.

• He advocates for greater consumer involvement in health care spending and a shift away from the predominant reliance on third-party payments.

David Stockman's article presents a compelling critique of the U. S. health care system, advocating for a fundamental change that involves empowering consumers through direct payment mechanisms. He highlights the inefficiencies of existing frameworks like ObamaCare and government-funded programs, arguing for reforms that would promote competition and price transparency within the market. The need for actionable steps toward restructured health care financing is deemed urgent to tackle the prevalent inflation and unsustainable growth in health spending. 

https://brownstone.org/articles/steps-toward-fixing-health-care/