Testimony on HB 3510
Before the House Committee on Healthcare
March 11, 2011
Co-Chair Greenlick, Co-Chair Thompson and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.
I’m here today along with Dr. Eric Fruits and Arnie Poutala to share with you some of the reasons I believe this bill will not only fail to achieve its goals, but will actually make our health care system worse.
First, let me share with you part of the introduction to the 2007 “Handbook on State Health Care Reform,”* published by the National Center for Policy Analysis. I’ve provided a link to the entire book online at the end of my written testimony.
There are three features of health policy everyone needs to understand:
Number one, health care is far and away the most complex social system there is. In fact, it may be even more complex than all other social systems combined.
Number two, health policy has been the object of more studies than any other market or area of human activity.
Number three, despite the huge volume of research, the large number of active researchers, and the best of all possible motivations, we have managed to produce hardly any truly workable solutions to the problems of cost, quality and access.
All too often, we seek solutions from the outside — usually in the form of government efforts to force the system to change.
To control costs, the conventional solution is to artificially push down provider incomes or restrict access to new technology.
To improve quality, the conventional solution is for government to dictate standards, in effect telling doctors how to practice medicine.
To improve access, the conventional solution is to expand government-funded health care to more and more groups and to make health care free at the point of delivery.
These conventional solutions have been tried in other developed countries and to a large extent they have been tried in the United States as well.
It is probably no exaggeration to say they have not worked very well.
In contrast to the conventional approach, we do not take the most important problems in health care as natural or inevitable. They are instead the artificial byproduct of the systematic suppression of normal market forces — which took place over the course of the 20th century.
Further, the solution to these problems does not lie in top-down, government-imposed remedies. It instead lies in bottom-up liberation. In particular, we need to free people from institutions that prevent them from solving problems on their own.
The most common source of problems in our health care system is the fact that people generally do not bear the full costs of their bad decisions or realize the full benefits of their good ones. On the buyer side, this means that patients who wastefully overuse health care resources usually pay only a small fraction of the cost of that waste. Conversely, patients who economize and avoid waste usually reap only a small fraction of the savings from their economizing.
On the provider side of the market, incentives are also distorted. In fact, health care providers rarely reap the benefits of being better at what they do.
Yet these problems are not unsolvable. One of the most amazing facts about our health care system is that for virtually every problem there are tangible, visible solutions — not hypotheticals, but real flesh and blood answers operating here and there, in diverse places.
For example, there are numerous examples of high-quality, low-cost health care in America — they are just not the norm. If we all got our health care at the Mayo Clinic, the nation’s health care bill could be reduced by one-fourth and the quality of care would be improved. If everyone went to Intermountain Healthcare in Utah, total spending would be reduced by one-third, again with higher quality.
Not only does health care not have to be expensive, there is no reason in principle why we should have to wait for it. In pharmacies, shopping malls and “big box” retailers around the country, people are getting high-quality primary care at walk-in clinics for half the normal cost and with very little waiting.
Nor does price and quality information have to be hidden. In the international marketplace hospitals routinely quote package prices for all manner of standard surgical procedures and publish quality data (including their mortality rates) as well. Furthermore, patients can get top-quality care at a fraction of what it would cost at most U.S. hospitals.