Patient Power:Solving America's Health Care Crisisby John C. Goodman and Gerald L. Musgrave; Reviewed by Jerome Arnett, Jr, MD
Patient Power: Solving America's Health Care Crisis is a fascinating book, which looks at our current dilemma in three sections. The first describes the cost-plus system of health care finance and how it evolved. The second shows why this system is creating our present health care crisis. The last section describes a system that will solve the majority of our problems and how we can get to it. The book is carefully documented and richly illustrated, with 101 tables and 64 graphs. "The only way to control costs is to have someone choose between health care and money" (that is, other goods or services), the authors write. This someone must be either the patients themselves or a bureaucracy that ultimately answers to government. Patient Power shows how the patients themselves will best perform this function. In a market system, the pursuit of one's self-interest not only results in self-benefit, but usually benefits others as well. The opposite is true in bureaucratic, nonmarket systems, where each individual takes actions in her or his self-interest that defeat the proclaimed social goal. The hallmark of bureaucratic thinking is that individuals don't matter, only the "social plan" does. The tragedies resulting from these systems are, in fact, the logical consequences of a goal largely accepted by today's health care analyst - the complete elimination of markets, prices, competition, and choice. Goodman and Musgrave debunk the prevailing view that markets cannot work in health care. Individuals in the medical marketplace can use the same self-interested behavior they use in every other market, which (if harmful government bureaucracy and regulations are eliminated) will correct virtually every major problem we now face and will allow the rapid emergence of an efficient and cost- effective health care system. Power will be transferred from huge bureaucracies to millions of individuals acting on their own behalf. Physicians will be the agents of patients, hospitals will be businesses selling services to patients and doctors, and insurance companies will be insurance specialists rather than managers of health care. The authors dispel 20 myths about national health insurance, which purports to make medical care a right, with all citizens having equal access to it. In reality, however, this system denies access to patient care and discriminates against minority groups including the poor, the elderly, and residents of rural areas (where one third of Americans live). It has not succeeded in controlling costs in other countries, it is not a more efficient system, it does not provide equal access to care, the quality of care provided is not high, and unnecessary care is not eliminated. Furthermore, studies show that Americans are not willing to accept a 15% increase in income tax, a lower quality of care, or longer waits for elective surgery or doctors' appointments. Finally, this system will hurt our ability to compete in the world market. If this were not enough, there are two further major problems. National health insurance will be extremely expensive, requiring more than $339 billion in new taxes, increasing costs in the manufacturing sector by more than 50%, and doubling them in the automotive industry. A broad-based tax will be required - a 15% payroll tax, a 15.7% increase in income tax, or a 9.75% consumption tax! Secondly, these costs will be spread unevenly throughout the private sector. The auto industry, for example, will pay about $3500 more for each worker in taxes than it will receive in benefits! The authors' agenda for each change includes policy changes that will remove harmful, government-created obstacles and will create new incentives for individuals to promote the development of an ideal system. Several changes are proposed, including creating individual self-insurance for small medical bills (medical IRAs or medical savings accounts). These are tax-free accounts set aside for the purchase of catastrophic health insurance and other health care expenditures. They will promote freedom of choice in health insurance. Other important recommendations include establishing equity in taxation, avoiding the costs of the tort system, promoting freedom of information in the hospital marketplace, and creating medical enterprise zones. Patient Power is a real eye-opener in the recent literature on health care reform. It is an extremely valuable resource for the health care professional, the industry executive, the government policy maker, or the interested lay person. It is lengthy, but well written and understandable. Every American who wants to be fully informed about our health care crisis should read it carefully. There is a condensed version of the same title now available. Edited by Harriet S. Meyer, MD, Contributing Editor; Dottie Eakin, MSLS, Medical Sciences Library, Texas A&M University, Journal Review Editor; advisor for software, Robert Hogan, MD, San Diego. Patient Power: Solving America's Health Care Crisis by John C. Goodman and Gerald L. Musgrave - hardcover, 659 pp, with illustrations, $29.95, ISBN 0-932790-92-5; paper, $16.95, ISBN 0- 932790-91-7; ©1992 Cato Institute, 1000 Massachusetts Ave. N.W., Washington, DC 20001 - 1-800-767-1241. Need above information for condensed version. The Cato InstituteFounded in 1977, the Cato Institute is a public policy research foundation dedicated to broadening the parameters of policy debate to allow consideration of more options that are consistent with the traditional American principles of limited government, individual liberty, and peace. Thus, Cato strives to involve the intelligent, concerned lay public in the ongoing debate over public policy. The Institute takes its name from Cato's Letters, essays widely read in the American Colonies, that played a major role in laying the philosophical foundation for the American Revolution. The Institute undertakes an ambitious program of books and other publications, conferences, and seminars designed to illuminate private-sector, voluntary solutions to social and economic problems. Cato studies emphasize privatization, deregulation, low and simple taxes, and less government spending. In foreign affairs the Institute seeks means of enhancing our national security through technological superiority while reducing the expensive military manpower requirements dictated by the policy of extended deterrence. To maintain an independent posture, the Cato Institute accepts no government funding, and relies solely on private contributions from foundations, corporations, and individuals. The Institute is a nonprofit, tax-exempt educational foundation under section 501(c)(3) of the Internal Revenue Code.
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