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Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.

Commentary

Sticker shock could help with healthcare costs
Newt Gingrich, James Frogue, The Hill, 3-8-06

Gingrich, former Speaker of the U.S. House of Representatives, is a polymath devoted to advancing big ideas that challenge the conventional wisdom. In this op-ed, Gingrich and his colleague Jim Frogue argue that the U.S. is at “the most important crossroads in healthcare policy of our lifetimes,” and “on the threshold of a 21st century intelligent healthcare system that saves lives and saves money for every American.” Who does Gingrich think will lead us into this bold, bright future? America’s savvy, value-hungry consumers. Still, Gingrich’s picture is not completely without its caveats.

…lack of price and quality information about healthcare choices may cripple this much-needed transformation before it can ever get off the ground. There is no other sector of our economy with as little information about price and quality as in the $2 trillion healthcare industry. American consumers can find all types of cost and quality information about cars, computers, homes and vacation destinations, but this type of rich consumer information is sorely lacking when it comes to something as important as choosing a physician or a hospital.
The American people clearly want this to change. In one survey, 93 percent of Americans believe they have the right to know cost and quality information about their healthcare providers. It’s hard to find any issue that garners the support of more Americans. By comparison, “only” 91 percent of Americans support keeping the words “under God” in the Pledge of Allegiance.

Gingrich is hopeful that Health Savings Accounts will spur millions of Americans to demand better information about healthcare costs and quality. His optimism is refreshing, but no one should forget that some groups view consumer-driven health care as a deadly threat. The first law of market capitalism is that inefficient firms should go bankrupt and be replaced by more productive competitors. In the health care sector, inefficient providers across the U.S. remain afloat thanks to generous state and federal payments from Medicare and Medicaid that encourage rampant spending along with plenty of outright fraud. Politicians have also been all to eager to throw healthcare spending at key interest groups, like unions, to bolster their support on election day.

Still, Frogue and Gingrich have hit on the right tactic: if you want to create a healthcare revolution, first send the consumers to tear down the barricades.



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