Universal health insurance through incentives reform

Abstract

Roughly 35 million Americans have no health care coverage. Health\ncare expenditures are out of control. The problems of access and cost are\ninextricably related. Important correctable causes include cost-unconscious\ndemand, a system not organized for quality and economy, market failure, and\npublic funds not distributed equitably or effectively to motivate widespread\ncoverage. We propose Public Sponsor agencies to offer subsidized coverage to\nthose otherwise uninsured, mandated employer-provided health insurance,\npremium contributions from all employers and employees, a limit on tax-free\nemployer contributions to employee health insurance, and "managed\ncompetition." Our proposed new government revenues equal proposed new outlays. \nWe believe our proposal will work because efficient managed care does exist\nand can provide satisfactory care for a cost far below that of the traditional\nfee-for-service third-party payment system. Presented with an opportunity to\nmake an economically responsible choice, people choose value for money; the\ndynamic created by these individual choices will give providers strong\nincentives to render high quality, economical care. We believe that providers\nwill respond to these incentives.