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WHCC 2008: George P. Shultz Enters the Healthcare Debate

by Fred Fortin

Washington, DC - I’m going to be attending the 2008 5th annual World Health Care Congress for three days starting tomorrow. I’ll be blogging here as well as sharing interesting insights from the speakers on Twitter. The who’s who of healthcare officialdom will be in town including folks like George P. Shultz, former US Secretary of State talking about his new book (co-authored with Stanford’s John B. Shoven) — “Putting Our House in Order: A Guide to Social Security and Health Care Reform”.

I did have a chance to read his book before coming to the conference and look forward to see what he has to say about health care reform. For Shultz the story of reforming health care and social security begins with the stability and growth of the US economy. In order to respond effectively to the coming cost catastrophe the economic pie has to growth. Any reforms have to be designed to pass Shultz’s “pie test.” Simply put, proposals that weaken the the GDP fail the test. So making use of the competitive market to discipline costs, raising labor force participation, recognizing labor mobility, growing personal savings, forcing government to confront the cost of over-promised entitlements, increasing taxes only as a last resort — these are some of the dynamics that should be examined when looking at the impact of healthcare reform measures.

Thus the “Shultz-Shoven health care initiative” includes, but is not limited to, the following:

  • Improving and encouraging Health Savings Accounts (HSAs)
  • Encouraging national rather than state health insurance markets
  • Making health insurance benefits portable
  • Enhancing consumer access to healthcare price and quality information
  • Risk-adjusted vouchers for Medicare and Medicaid
  • Offer Medicare and Medicaid beneficiaries choice of private health plans
  • Fund government programs dedicated taxes rather than general fund to promote cost effectiveness
  • Replace Medicaid’s eligibility “notch” with phased reduction in the value of vouchers as income increases

Shultz’s ideas are not new but they do enjoy an economic logic that cannot be denied or ignored.

He sums up his proposals in the following way:

. . . we seek to modernize and significantly reform Medicare and Medicaid, improve employer-sponsored health plans, and ensure that those who do not have access to such plans will still be able to obtain affordable major health insurance. We advocate that all Americans have access to strengthened Health Savings Accounts and a more competitive health insurance environment.

The question will be whether in today’s healthcare debate these conservative, market-oriented ideas will seem somewhat tepid in the face of corporate conspiracies and single payer fantasies.

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