Debt, deficit, the economy, and jobs are the words on the lips of every candidate competing for your vote this election year. I contend that the rising cost of health care is the key to addressing each of these issues.
As a nation we spend each year nearly $2.5 trillion of our total income on health care, a number that equates to $8000 per person. Making matters worse, health care costs are expected to continue to outstrip inflation for the foreseeable future. Why? While waste, fraud, excessive profits, and poor controls are often offered as reasons, they are not the problem. Health care costs rise because consumers lack choice.
Unlike in a true market, American health care consumers must blindly choose prescriptions, doctors, hospitals, and procedures without the benefit of a price tag. Making matters worse, our fee for service system rewards health care providers who spend more. Were we, as consumers, able to know the prices of our options, choose those that offered the best value for our dollar, and save the difference, we would spend less. This simple idea is the basis for Health Savings Accounts (HSA). A larger benefit would be that our freedom to choose would provide incentives for providers to charge less and become more efficient. Health care would begin to behave like every other efficient product and market. If HSA’s are portable and not employer based, individual consumers would never face a “use it or lose it” choice.
To be sure, critics of HSA will wonder about those who are incapacitated and need care. This objection overlooks the fact that such a person would enter a system made cheaper by those who could and did choose the most efficient options.
The consumer driven reforms of Health Savings Accounts (HSA) and cost transparency will give us better and much less expensive care. Lower health care costs will make entitlement programs such as Medicare more manageable. These savings will help us to reduce national account deficits and debt. Lower health care costs will also make employees less expensive to hire and provide our entrepreneurs with greater incentives to expand.
True health care reform must empower the health care consumer rather than perpetuate the quarrel about who will pay an ever-rising bill. As a small business owner running for Congress, I understand that customers are their own best judges of value. I hope to bring this wisdom to Washington as your representative. Unless, and until, we work with markets forces to bring efficiency to health care, health reform legislation will be merely a placebo for a deadly disease.
Joe Selvaggi is Republican candidate for Representative in US Congress in the new 8th District. He is a US Navy Veteran, a graduate of Worcester Polytechnic Institute and Harvard Kennedy School, and co-founder and president of Plaster Fun Time, Inc. More information is available at www.Joe4Jobs.com.