Referring to his opponents on health care, President Obama’s recent Labor Day address included the following sentence “But I’ve got a question for them: What’s your answer? What’s your solution? The truth is, they don’t have one. It’s do nothing.” To the contrary Mr. President, there are good people that are making serious attempts at reform—people whom you are ignoring. Some of their ideas are as follows.

1.      Restore the Free Market. The US government spends more per capita on health care than any other large economy. The problem with our health care is not a lack of money, it’s a lack of efficiency. People don’t ask their doctor how much a visit costs. And they won’t change doctors because theirs took too long to see them. This is a symptom of a deep illness: the free-market isn’t at work.  People don’t pay for their health care, their insurance company does. Thus, people shop for insurance, but not for health care. People who pay for their medical care take care to purchase what they need and no more.  The basic solution is to make people responsible for what they buy and for what they receive. One elegant method, as explained by John Mackey, CEO of Whole Foods, is to have high deductible health savings accounts. Add to this the co-insurance methods that Mitt Romney is proposing (joint payment after the deductible, up to some fixed amount) and you have restored competition to the market, while giving individuals power over their money and spending. People need to pay for what they get.

2.      Cut the tax on personal health care. As noted in my post at,  the government could make health care less expensive by taxing it less when you buy a portable, personal plan instead of an employer provided plan. Currently, you can spend pre-tax dollars on an employer-provided insurance plan—a plan that doesn’t go with you if you lose your job. If we want to incent people to buy their own personal plan, we could allow people to buy their portable, personal plans with pre-tax dollars too. This has been cited by Martin Feldstein, Michael O. Leavitt, and Shawn Tulley as an excellent way to help people get portable, market-driven insurance for lower cost.

3.      Let people buy insurance across state borders.  Allow the free-market to work country-wide. This is being lauded by the afore-mentioned Shawn Tulley, in addition to the Wall-Street Editorial board, Senator Jim DeMint, and many others. (Tulley insightfully points out that this would free the market from cumbersome regulations such as guaranteed issue, standard benefits package, and community rating.)
4.      Walk away from the ambulance-chasers: it’s time for tort reform. Estimates are that defensive medicine (when doctors perform every conceivable test on a patient to protect themselves from malpractice suits, for example) costs between $100 and $200 billion each year.  Capping non-economic damages at $250,000, streamlining legal procedures, and making sure that more money goes to the plaintiff and less to the attorney will go a long way in reducing defensive-medicine health care costs. ATR’s policy brief, our own Chris Prandoni, Senator DeMint, and many others are all supporters of such measures.  (See Howard Dean—former chairman of the Democratic National Committee—explain the reason why democrats in congress are unwilling to support tort reform here.)
5.      Address the supply side of the issue.  As Kevin Pho and Vance Harris (both primary care physicians) have each recently wrote, there is a shortage of primary care physicians in the country. Poor working conditions, lower pay than specialists, and other factors are making doctors go elsewhere. Part of the answer is deregulating the medical market: getting rid of excessive regulation (including excessive licensure requirements, certificate-of-need, and restrictions on physician-owned hospitals) would mean more doctors, lower medical costs, and cheaper insurance. The Association of American Physicians and Surgeons and Shawn Tulley both regard the problem as barriers to entry that are restricting the supply of doctors.
6.      Refocus the discussion on health care, not health insurance. The red herring of insurance causes a lot of problems. Insurance costs a lot because health care costs a lot. If we want expensive health care, we should be prepared to pay for expensive insurance. You can find a good explanation of this principle here.
7.      Want to see these ideas in legislative form? Senator Jim DeMint’s bill is it. His bill includes most of the ideas listed above, and would not cost anything to the taxpayer.

Far from being out of ideas, the conservative movement is providing intelligent, articulate, detailed solutions that would help America, fix our health care mess, and restore the free market. Mr. President, we have solutions.