One the of the brighter lights on the GOP side of the aisle, especially when it comes to economic issues, is certainly businessman Steve Forbes.  Forbes is well know, and well respected, for his policy acumen.  In his magazine, Forbes pens an opinion column.  Well, Arnold Schwarzenegger’s governmental foray into healthcare has made the top of Forbes’ most recent column:

UNHEALTHY…By Steve Forbes
Arnold Schwarzenegger’s proposal for universal health coverage in California underscores the abysmal ignorance of so many–including boatloads of business executives and entrepreneurs–about what it takes to bring rationality, productivity and lower prices to the health care market. The biggest problem is the disconnect between providers and consumers. When the consumer has little control over a market, that market goes haywire. The most vivid example of this, of course, is the now defunct Soviet Union.

Instead of covering catastrophes, most private health care policies cover everything–after a relatively low deductible. The fact that the consumer has no restraint in demanding products and services under this approach is a basic flaw usually understood by most nonsocialist experts. But the other fundamental flaw–that there is a lack of the kind of productivity we get elsewhere–is not. The health care field is dominated by a cost-plus mentality.

It’s no surprise, for instance, that when MRIs first came along the price of the procedure was well over $1,000. They are cheaper today–$400 and up–but not as cheap as they should be. If you had high-tech-like productivity, MRIs would cost under $100.

Under today’s flawed system, mandatory health insurance for all would guarantee a rapid move to de facto nationalized health care. This would mean more money for less health care–in other words, rationing via waiting lines. Innovation would wither.

Alas, the President’s health insurance tax proposals are no solution, either–just futzing around with a flawed system.

Health Savings Accounts are slowly gaining ground, just as 401(k)s did two decades ago. Catastrophic health insurance is relatively cheap–for most of us, a few hundred bucks a year. Properly structured, HSAs would enable employers to give a good portion of the high deductible to their workers. When people control the money, they endeavor to get more value for it, and productivity gains ensue.

You can read the entire column here.

This entry was posted on Tuesday, January 30th, 2007 at 12:00 am and is filed under Blog Posts.