Healthy, Wealthy, and Wise: 5 Steps to a Better Health Care System, Second Edition

by John F. Cogan, R. Glenn Hubbard, Daniel P. Kessler

Overview

In this second edition of their 2005 work, the authors offer market-based alternatives to recent health care reforms that center on tax changes, insurance market changes, and the redesign of Medicare and Medicaid. They show that, by promoting cost- conscious behavior and competition in both private markets and government programs such as Medicare and Medicaid, we can slow the rate of growth of health care costs, expand access to high-quality health care, and slow down runaway spending.

Product Details

ISBN-13:	9780817910648
Publisher:	Hoover Institution Press
Publication date:	03/01/2011
Pages:	176
Product dimensions:	5.70(w) x 8.50(h) x 1.00(d)

About the Author

John F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Institution, Stanford University. R. Glenn Hubbard is the Dean and Russell L. Carson Professor of Finance and Economics, Graduate School of Business, and a professor of economics at Columbia University. He is also a research associate at the National Bureau of Economic Research and a visiting scholar at the American Enterprise Institute. Daniel P. Kessler is a professor of economics, law, and policy at the Stanford University Graduate School of Business; a senior fellow at the Hoover Institution, Stanford University; and a research associate at the National Bureau of Economic Research.

Read an Excerpt

“In our view, the argument for increased public intervention is seriously flawed. . . . The unintended consequences of a handful of long-standing public policies are in large part responsible for the problems of the health care system.”—Introduction, pg. 4

Table of Contents

Preface to the Second Edition ix

Acknowledgments xiii

Introduction 1

Chapter 1 The Challenge: Obtaining High-Quality, Affordable Health Care 9

The Good: Innovation 9

The Bad: High Costs and a Large Uninsured Population 14

High Costs: No Easy Answer 14

The Uninsured Population: Many Causes, Uncertain Consequences 19

The Ugly: Backlash against Markets and the Misguided Policy Response 23

The Backlash against Markets 24

The Misguided Policy Response 25

Chapter 2 Five Policy Reforms to Make Markets Work 31

Increase Individual Involvement in Health Care Decisions 33

In Private Markets, Reform Taxation of Health Spending 34

Increase Cost Sharing in Government Programs 49

Deregulate Insurance Markets and Redesign Medicare and Medicaid 52

Deregulate Insurance Markets 52

Redesign Medicare and Medicaid 63

Expand Provision of Health Information 66

Control Anticompetitive Behavior 67

Reform the Malpractice System 69

Study the Tax Preference for Nonprofits 74

Chapter 3 Impacts of Proposals on Health Care Spending, the Uninsured, the Federal Budget, and the Distribution of Tax Burdens 77

Effects of Reforms on Health Care Spending 78

Tax Deductibility 79

Tax Credit 81

Insurance-Market Reform 81

Malpractice Reform 82

Summary and Discussion 82

Effects of Reforms on the Number of Uninsured 84

Tax Deductibility 85

Tax Credit 85

Insurance-Market and Malpractice Reforms 85

Summary and Discussion 86

Effects of Reforms on the Federal Budget 88

Tax Deductibility 88

Tax Credit 90

Insurance-Market and Malpractice Reforms 90

Subsidy for the Chronically Ill 90

Summary and Discussion 92

Distributional Impact 93

Conclusion 97

Appendix A Estimating the Impact of Policy Reforms on Health Care Spending 107

Appendix B Estimating the Impact of Policy Reforms on Uninsurance 117

Appendix C Derivation of the Elasticity of Total Health Care Spending with Respect to the After-Tax Price of Out-of-Pocket Spending 121

Appendix D Estimating the Impact of Policy Reforms on the Federal Budget 125

Notes 133

About the Authors 147

About the Hoover Institution's Working Group on Health Care Policy 149

Index 151