Welcome to this episode of the Let People Prosper Show, where we discuss critical issues in public policy, economics, and the future of prosperity. Today’s guest is Joe Grogan, founder of Fire Arrow Consulting and a leading healthcare policy expert with decades of private and government experience. Joe served as the Director of the Domestic Policy Council under President Trump, where he played a pivotal role in shaping healthcare policy, including efforts to improve transparency and market competition. He is also the co-host of the DC EKG podcast, where I was recently on his show to dive into healthcare reform, economic policy, and the power of state-level innovation.
For more insights, visit vanceginn.com and get even greater value with a subscription to my Substack newsletter at vanceginn.substack.com. (0:00) – Introduction to Healthcare Policy and Joe Grogan’s Background Joe shares how his experience in both the private and public sectors shaped his views on healthcare reform. (3:09) – The Evolution of U.S. Healthcare Policy Exploring how the Affordable Care Act and past reforms have altered the healthcare landscape. (6:01) – Challenges in Reforming Healthcare Joe delves into the bureaucratic barriers and inefficiencies that complicate meaningful reform. (14:57) – Price Transparency and the Marketplace of Healthcare Discussing the critical need for transparency and how it can transform healthcare into a functioning marketplace. (28:40) – Federal Block Grants for State Flexibility Examining how block grants could simplify and improve Medicaid while empowering states to innovate. (34:55) – Data Transparency and Government Accountability How improving data availability can drive innovation and ensure better healthcare outcomes. (42:52) – Future Opportunities in Healthcare Reform Joe shares his optimism for bipartisan solutions and what needs to happen next to empower patients and improve efficiency.
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Originally published with Deane Waldman, M.D., MBA at The Center Square.
President Donald Trump faces many problems left by the outgoing Biden administration. One of them is the world’s most expensive health-care system, as millions of Americans struggle to access timely, quality care. In 2024, the nation spent an astonishing $4.9 trillion on health care – more than the entire GDP of Japan. Much of this money never reached doctors or hospitals. Instead, it was consumed by bureaucracy, unnecessary regulations, and compliance activities. We must fundamentally rethink how to allocate resources to save money and improve care. The solution isn’t more funding; it’s defunding the bloated system and empowering patients, something that Trump should consider to empower patients with better, affordable care. The problem lies in inefficiency. The U.S. spends far more on health care per capita than other developed nations. In 2023, Americans spent an average of $12,742 per person on health care. Compare that to Israel ($3,469), the United Kingdom ($5,867), or even Switzerland ($9,044). The difference isn’t due to better outcomes or superior care – it’s because American health-care dollars are being diverted into an inefficient system. A large portion of U.S. health-care spending goes to what can be described as BURRDEN: bureaucracy, unnecessary rules and regulations, directives, enforcement, and noncompliance activities. Research suggests that these non-clinical activities consume 31% to 50% of U.S. health-care spending. That means between $1.52 trillion and $2.45 trillion annually could be saved or redirected toward actual care. Envision a scenario where patients – not bureaucracies – control these resources. If employees receive the $23,968 as part of the compensation their employers currently spend on health insurance, they can make their health-care decisions. These funds are currently directed toward insurance companies but could be returned to workers, empowering them to shop for care directly. Giving consumers control over their health-care dollars could restore market forces to the system, driving down prices and improving service quality. The evidence supporting patient empowerment is compelling. When patients pay directly for care, providers must compete for their business by offering better prices and higher-quality services. This dynamic can already be seen in direct-pay surgery centers and cash-only primary care practices. At the Surgery Center of Oklahoma, for instance, patients can see the total cost of procedures upfront. This is generally a fraction of what traditional, insurance-based hospitals charge. Transparency and competition create savings while simultaneously improving quality. Critics argue that patients lack the knowledge to make complex medical decisions. However, the same could be said for hiring a lawyer or choosing a car mechanic, yet consumers navigate these markets daily. Empowering patients doesn’t mean abandoning them; it means providing tools like transparent pricing and quality data to help them make informed choices. For example, health savings accounts (HSAs) could be expanded and more flexible. This would allow families to save tax-free for medical expenses and spend those funds as they see fit, including on insurance policies they want, instead of being limited to what Washington allows. Defunding the health-care system doesn’t mean cutting care. It means cutting the inefficiencies that inflate costs and hinder access. We could achieve substantial savings by streamlining regulations and reducing administrative waste while improving the patient experience. Elon Musk’s Department of Government Efficiency, or DOGE, can make history by tackling health-care reform as its priority. Starting with health-care offers wins for finances and people. Without reform, health-care spending will continue to rise, draining public funds and household budgets. Meanwhile, millions of Americans will remain stuck in a system prioritizing paperwork over patients. By defunding the bloated bureaucracy and empowering individuals, we can create a system that delivers better outcomes at a fraction of the cost. It’s time to give Americans what they deserve: affordable, accessible health care that puts their needs first. Originally published by Real Clear Policy with Dr. Deane Waldman.
In 1960, President Kennedy promised the U.S. would put a man on the moon within a decade. The experts scoffed, saying it was impossible based on the science, or the lack of it. Nine years later, Neil Armstrong stepped on lunar soil. Today, talking heads as well as the public believe that fixing healthcare is impossible – it can’t be done! Doctors Ginn and Waldman disagree. They ascribe to the optimists’ credo: the difficult we do today; the impossible takes a little longer. The burning platform theory says that people will refuse to get off a shaky, unstable, dangerous platform but will quickly vacate if it is on fire. Healthcare is on fire. People are likely to accept big changes today that they would have resisted years ago. Healthcare has reached its tipping point. The formation of DOGE is proof that fundamental change is possible. Our New Year resolution for 2025 is to cure our impossible-to-fix healthcare system. The cure should produce a system that will allow Americans to obtain the care they want when they need it while simultaneously breaking the national addiction to overspending. The cure will require many, substantive changes over time. The impossible takes a little longer. The first step is to pay American workers all the money they earn. The so-called benefit of employer-supported health care is an obsolete, market-distorting holdover from wage freezes enacted during World War II that deny workers all they are owed. On average, employers are currently giving $23,968 of employees’ earnings to insurance companies instead of paying that money to employees. Step #1 in the cure is paying the $23,968 to employees, not to insurance. The natural place to park these funds would be some type of bank account for medical expenses. That is a problem. There are at least three different forms of such accounts: Health Savings Account (HSA), Flexible Spending Account (FSA), and Medical Savings Account (MSA). Each has multiple different governing regulations – federal, state, and various insurance plans. Some have use-it-or-lose-it time limits. Several insurance plans do not accept such accounts. HSAs have contribution limits such as maximums of $4150 for an individual and $8300 for a family. Thus, at least $15,668 of earnings cannot be contributed at present. Furthermore, federal regulations stipulate what are allowable medical expenses and what are not – a choice that should be made by the patient not the government. Restrictions on HSAs are a form of government control where regulations are unnecessary, inappropriate, and costly. Americans should be free to spend their hard-earned dollars as they see fit. Medical outlays should be tax-free for employees as they are now for employers. Next, it is necessary to unleash the power of an HSA but in a new, simplified and unlimited form, starting with its name. The purpose of healthcare is Care. The function of healthcare dollars is to Spend on care, not saving them. Thus, the new medical account should be called a Care Spending (not Savings) Account or CSA. There is no need for other accounts like the current HSA, MSA, or FSA. There should be no limit on how much a family can contribute to an CSA and no time limit to use these funds. The account should be passed across years and generations. CSA monies can be spent on any health-related expenditure. In addition to standard care, medications not approved by the FDA (like ivermectin for COVID), crystal therapy, aromatherapy, and other forms of alternative medicine should be allowed while a big screen TV or a new automobile should not. If a family wishes to spend their CSA money on medical expenses for a non-family member, that too should be allowed. In other words, Americans should be free to engage in tax-free spending on their medical care with no government direction, regulation, or coercion. Just because the Biden Administration labeled short-term insurance as “junk,” doesn’t mean Americans should be prohibited from purchasing it. The CSA would require no regulatory apparatus other than IRS oversight. It will eliminate the need for and spending on the BURRDEN – Bureaucracy, Unnecessary Rules and Regulations, Directives, Enforcement, and Noncompliance activities – of HSA, MSA, and FSA. This will save billions of taxpayer dollars and improve access to reliable, timely care. With more than $20,000 per year in an CSA to spend directly on care, and no third-party insurance costs or expenses for BURRDEN, providers can offer consumers drastically reduced prices for cash-only services and goods. Suddenly, that $2500 MRI would cost $750, easily affordable from the CSA. Even the $15,499 price tag for hip replacement at cash-only Oklahoma Surgery Center is not a problem. And for the rare, six-figure heart attack or cancer chemotherapy, there is high deductible catastrophic insurance (when and if Washington will stop over-regulating insurance.) The CSA shows the impossible is possible: it saves consumers’ money and simultaneously pays more to providers. A standard charge through insurance for hip replacement is $35,114; Medicaid pays $12,922. As noted previously, the cash-only, no insurance charge to the patient is $15,499, not $35,114. Payment from the CSA to the provider is $15,499, not $12,922. And, the provider is paid immediately, not after two years of aggravating insurance reviews. While many more actions are necessary to make health care accessible and affordable, the first two steps are as outlined. (1) Pay workers ALL the money they earn and let them spend it as they choose. (2) Provide a tax-free spending haven for medical expenses with a no limit (time or money) CSA. The next part (step #3) of the New Year resolution involves turning Medicaid into a functional and sustainable medical safety net, which it most certainly is not. Originally published by American Spectator with Dr. Deane Waldman.
The murder of Brian Thompson, CEO of UnitedHealthcare, was a heinous crime allegedly done by Luigi Mangione out of rage against the machine. Presumably, his target was someone who profits from our broken healthcare “machine” or system. President Obama was overt in Washington’s theft of taxpayer dollars intended to pay for care. Public frustration with, anger, and even “hatred” toward healthcare may seem justified based on facts, but violence is never the answer. Healthcare seems to turn hard-earned taxpayer dollars into massive health industry profits and wasteful bureaucratic spending. And what does the public get? Questionable insurance policies with promises of care that never materialize, drugs that don’t work, and physicians who spend most of an appointment looking at a computer screen rather than talking with patients. Last year, the U.S. spent $4.8 trillion on its healthcare system, 17.5 percent of our GDP and more than the entire GDP of Japan. American families spent $31,065, on average, on healthcare costs in 2023, of which 83 percent went to insurance companies. (READ MORE: Federal Bureaucracy Is Biggest Healthcare Rent-Seeker) Insurance is one of the most profitable industries in the country, so Mr. Thompson may have seemed a symbol of the evils of capitalism against which Mr. Mangione railed in court. Insurance companies typically generate profits by not paying for medical care. They use a 3-D strategy — delay, defer, deny — which was dramatized in the 1997 movie, “Rainmaker,” where a greedy insurance executive denied a claim for payment for the treatment of a cancer patient, claiming the therapy was experimental and therefore not covered. The young man died despite having a potentially treatable condition. People holding a health insurance policy have been led to believe they will receive timely care. Yet the healthcare machine assigns them a provider. A pharmacy benefits manager chooses their medications. With insurance, the maximum average wait time to see a primary care physician in a mid-sized city is 132 days. Some patients with either Medicaid or Tricare insurance wait so long for care, they die while waiting. Thus, while nothing exonerates the murder of another person, public outrage seems justified. Federal Bureaucracy Impedes Care Moreover, private insurance is not the biggest culprit in taking our money and denying us care. That trophy goes to Washington. Just recently, Elon Musk, co-leader with Vivek Ramaswamy of the non-governmental DOGE (Department of Government Efficiency), expressed shock at the “skyrocketing administrative costs” of the federal healthcare bureaucracy. He refers to healthcare spending that provides no care. The word bureaucracy is too insignificant to express all the costly activities between Washington passing a healthcare law and the impact on Americans. The process invariably generates BARRCOME -- bureaucracy, administration, rules, regulations, compliance, oversight, mandates, and enforcement. One look at the organizational chart of the Affordable Care Act (ACA) proves how convoluted, complex, confusing, and costly is Washington-controlled healthcare. Estimates of the cost of BARRCOME range from 31 percent to more than 50 percent of U.S. healthcare spending. Between 1970 and 2010, when the number of physicians doubled, healthcare bureaucrats increased by more than 3,000 percent! No wonder a businessman like Musk would be appalled at an industry where half the money expended produces no value for consumers. In 2023, Americans paid $4.8 trillion for “healthcare.” Washington took possibly $2.4 trillion of it and paid for BARRCOME workers, not care providers. President Obama was overt in Washington’s theft of taxpayer dollars intended to pay for care. To defray the cost of ACA BARRCOME, former President Obama and Congress redistributed nearly $800 billion from expected spending on Medicare even as revenue increased, thereby extending the date of insolvency for the program. There is good reason for Americans’ rage against the healthcare machine. But violence, including murder, cannot be justified. While insurance can be a target for change, the bigger, more appropriate offender is federal spending and the resulting bloated bureaucracy. (READ MORE: Harris’ Healthcare Destroys Health CARE) Hopefully, the DOGE will use deregulation, spending cuts, and government employment termination rather than life termination to improve patient care at a lower cost. Musk and Ramaswamy have set a goal of cutting $2 trillion from the federal budget. Reducing healthcare BARRCOME would accomplish that task while providing more dollar-efficient, more accessible, and affordable health care. Originally published at Wall Street Journal.
Messrs. Musk and Ramaswamy’s proposal for the Department of Government Efficiency, or DOGE, presents a promising opportunity to restore constitutional governance. A clear path for reform exists within Medicaid: Enforce Section 1801 of the Social Security Amendments of 1965 that created Medicaid. This law prohibits federal control over both medical care and how a state operates its Medicaid program. Yet decades of overreach have transformed Medicaid from a limited safety net to an unwieldy program covering 92 million Americans, encouraged by the flawed formula that rewards overspending. By rescinding federal regulations and limiting federal involvement to block grants, DOGE can return control to states, saving taxpayers billions. Implementing Section 1801 requires no new law. An executive order enforcing existing statutes would suffice. This aligns with DOGE’s objectives of regulatory rescission, administrative reduction and cost savings while upholding constitutional principles. Deane Waldman and Vance Ginn Round Rock, Texas. Originally published at Real Clear Policy.
Elon Musk and Vivek Ramaswamy recently published the legal background, justification, and their plans for the Trump-created temporary, non-governmental DOGE, Department of Government Efficiency. They have numerous ideas of how to clean up what the military calls a “target-rich environment” of federal sloth, waste, inefficiency, corruption, and demonstrably illegal activities by the administrative or “deep” state. Start with Medicaid. It is highly dollar inefficient, spending too much while getting too little value – timely access to medical care – wasting billions of taxpayer dollars. In 2023, CMS (Centers for Medicare and Medicaid Services) in Washington spent more than $860 billion running a program it is legally prohibited from running. When regulated by Washington, Medicaid is ILLEGAL! Section 1801 of the Amendment to the Social Security Acts of 1965 that created Medicaid reads as follows. Note the Section’s title and Congress’ explicit prohibitions. SEC. 1801. PROHIBITION AGAINST ANY FEDERAL INTERFERENCE “Nothing in this title [the law] shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.” Despite the specific intent of the law, over decades, CMS (Centers for Medicare and Medicaid Services) has taken control of eligibility standards, benefits, i.e., medical care provided, and the payments allowed. Washington applied a one-size-fits-all approach for Medicaid enrollees in every state program. If the DOGE wants to cut nearly one trillion dollars from the federal budget, and simultaneously improve (!) access to medical care, follow the Medicaid law as written. The Affordable Care Act is a good example of over-regulation of Medicaid by Washington, but there were dozens of others. Most annual OBRAs (Omnibus Budget Reconciliation Acts) since 1975 have contained some section that increased Medicaid benefits, expanded eligibility, or reduced payments. A program originally intended for less than four million “Old-age, Survivors, and Disab[led]" Americans, exploded by December 2022 to include 92.3 million enrollees. The federal government gave 27.6 percent of the U.S. population no-charge-to-consumer Medicaid coverage paid by taxpayers. The already exorbitant cost of this program will increase even further because California and Oregon have added illegal immigrants to their Medicaid rolls. Musk and Ramaswamy intend the DOGE to use three approaches to improve federal efficiency: regulatory rescissions (canceling regulations), administrative reductions (“reductions in force”), and cost savings, such as radical simplification and rigorous auditing of government procurement. They utilize all three approaches when implementing Section 1801. As prescribed by law, stop federal interference in state Medicaid programs other than providing block grants. Eligibility, benefits, payments to insurance companies as well as to providers should be decided by the states, not the federal government. Reports on medical and financial results of Medicaid programs should go to respective state legislatures, not Washington. Discontinue the FMAP (Federal Medical Assistance Percentage) formula which incentivizes spending and discourages saving. Currently, the more a state spends on its Medicaid program, the more taxpayer funds it receives from Washington. Make federal funding a negotiated, fixed amount. Washington can then budget for a known quantity, not a variable dependent on states’ budgeting. With block grants, states will operate their programs as they know best, adding whatever state funds are necessary to support their medically vulnerable residents. In their Wall Street Journal blueprint for improving government efficiency, Musk and Ramaswamy wrote, “we will focus particularly on driving change through executive action based on existing legislation rather than by passing new laws.” They could have been (and hopefully were) writing about Section 1801. Activating the legal prohibition against “any federal interference” with state-controlled Medicaid programs is precisely what needs to be done to cut billions in costs and at the same time save American lives. All current federal regulations that control state Medicaid programs would be rescinded. The current CMS/Medicaid actuaries and accountants, administrators, bureaucrats, compliance officers, enforcement agents, oversight inspectors, and rule and regulation writers would be gradually transitioned into the private sector. This very large reduction in force would save taxpayers billions in wasteful, illegal federal spending. By following the Medicaid law as written, DOGE can rein in an out-of-control federal bureaucracy. The 47th President can use Section 1801 to drain the Medicaid portion of the swamp. Your browser does not support viewing this document. Click here to download the document. ![]()
Originally published at Real Clear Policy.
By Deane Waldman & Vance Ginn October 14, 2024 Seeking to focus the final month of campaigning on healthcare and away from immigration, inflation, and violence both abroad and at home, V.P. “Harris proposes Medicare pay for home health care.” She claims to have a fully developed policy for the healthcare market in contrast to Trump’s mere “concept of a plan.” Never mind she has no idea how to pay for it. What does she have in mind for our future? Based on her actions, V.P. Harris intends the healthcare marketplace to be under complete federal control, devoid of free market forces or personal choice. As president, she would institute a centrally controlled economic system. If Medicare “pays for” home health care, that means Centers for Medicare and Medicaid Services (CMS) would dictate both benefit and payment. In market terms, government would determine – balance – both demand and supply. That is the definition of central economic control, the opposite of a free market. Earlier this year, CMS adjusted the market ratings of insurers Elevance and UnitedHealthcare based on “arbitrary,” “capricious,” and “unlawful” actions according to a lawsuit against the government agency. Together those two companies enrolled more than half of all those who signed up for Medicare Advantage. Obviously, seniors wanted to purchase these policies, but CMS chose to control the market rather than letting consumers decide. Millions of Americans have purchased short-term health insurance. The Biden-Harris White House labelled these policies “junk insurance,” and “protected” Americans from their own stupidity by instructing CMS to prohibit them. Removing these plans from the marketplace limits consumer choices – demand for services – to what Washington approves. As all providers know, price or charge in healthcare is meaningless as payments are dictated by Medicare “allowable reimbursement schedules.” Harris has also made clear her desire for price-fixing. Recall her solution for what she called “price-gouging.” The Biden-Harris Inflation Reduction Act of 2022 gives Medicare the authority to fix prices for drugs though they call it a negotiation. Thus, Washington controls supply as well as demand. Harris says, “her values have not changed.” So, keep in mind her full-throated, in fact passionate, support of Medicare-for-All, H.R. 1384. This is Bernie Sanders’ plan for unabashed total take-over of the entire healthcare market, one sixth of the U.S. economy. The Senator admits his plan could cost up to $40 trillion, one third of the combined GDP of all nations on planet earth – for a healthcare system that doesn’t care. In addition to bankrupting the U.S., Medicare-for-All will drive more clinical doctors to quit (there will, however, be more bureaucrat doctors like Fauci); will make the wait for medical (health) care interminable; and death-by-queue will become an hourly rather than daily occurrence. Consider what the progressive, sixty-year expansion of the federal role in healthcare has accomplished. In 1960, the U.S. spent 5.6 percent of GDP on healthcare, you got an appointment within a week, and your doctor knew your first name. Last year, the U.S. expended 17.8 percent of GDP, $4.8 trillion, on healthcare. Approximately half was spent on BARRCOME – bureaucracy, administration, rules, regulations, compliance, oversight, mandates, enforcement – and thus produced no patient care! Despite spending more on its healthcare system than the entire GDP of Japan, Americans can wait more than 130 days to see the doctor and die while waiting. According to its Trustees, Medicare will be insolvent by 2036. At that time, the program will be unable to pay for in-patient care for seniors. Trump’s intentions for healthcare may be vague but Harris’ plan for the healthcare market is clear: total central economic control as in the U.S.S.R., Venezuela, China, and North Korea. Whether you call it Medical-for-All, single payer, or HarrisHealth, the V.P. wants the federal government to make all fiscal and thus all medical decisions for Americans. Judging by what federal control of the healthcare market has done to America and to Americans over the past sixty years, that will be the end of health...care. Originally published at National Review.
By Vance Ginn & Deane Waldman October 11, 2024 6:30 AM Congress should shift the tax advantage from employers to employees to empower patients. Employers are projected to face a nearly 8 percent jump in costs for providing health insurance to employees in 2025, marking the highest increase in their health-care spending in over a decade. Since 2017, the costs of employer-sponsored health insurance have increased by a cumulative 50 percent, driven by inflation, rising prescription drug costs, the increasing burden of treating chronic conditions such as cancer and cardiovascular disease, and the cost of regulations. These costs hit workers and consumers hard. The out-of-control health-care spending spotlights the flaws of federally-facilitated, employer-sponsored health insurance, which limits competition and inflates health-care prices for everyone. The employer-sponsored insurance system, a relic of World War II-era wage freezes, continues distorting the U.S. health-care market. Tax-advantaged employer payments for employees’ insurance were implemented to circumvent wage controls, and to attract and retain workers. After the war ended, wage freezes were repealed — but the tax advantage for employers was not. With the wage freezes gone, health-insurance payments should have been restored as employee compensation so employees could choose how to use their hard-earned money. However, with the tax advantage to employers remaining intact, the funds continue to go to insurance and not to the workers. The system has ballooned into an inefficient approach that inflates costs and reduces consumer choice. If the tax advantage were transferred from employer to employee, this would expand the usefulness of these funds to pay for medical expenses. Employees believe “employer-supported health insurance” is a benefit provided by the employer, not what it truly is: Money rightfully theirs that is denied to them. About 165 million Americans rely on employer-sponsored health insurance, but workers have few choices beyond what their employers offer. Employer-sponsored insurance ties up at least $1 trillion in annual health-care spending that could be paid directly to employees, or placed pre-tax into Health Savings Accounts (HSAs) for workers to control themselves. As of 2023, employers’ average cost of family health insurance reached a whopping $23,968. While this exclusion saves workers from paying taxes on this amount, it also forces them to accept plans that may not meet their needs. It also disallows them from shopping for better, more affordable options. Put simply, a worker paying a 33 percent tax rate avoids paying about $7,910 in federal taxes on a family-plan premium. This tax break hides the reality that employer-sponsored insurance stifles competition, driving up costs across the system, and is really compensation denied. Employers must absorb ever-increasing costs, along with employees who pay co-pays and elevated deductibles. In 2025, these costs are expected to rise by 8 percent, with much of the increase driven by pharmacy spending, particularly for GLP-1 medications used to treat obesity and diabetes. This pharmaceutical spending has grown to consume 27 percent of health-care budgets, up from 21 percent in 2021. While these medications could reduce health-care cost over time, we don’t have evidence of it yet. This system inflates health-care costs by encouraging over-insurance, where employer-sponsored plans cover more than workers need, and limits the free market’s ability to drive competition and lower prices. A free-market approach would allow individuals to shop for health insurance as they do for any other product or service. Moreover, while employers try to manage these rising costs through plan adjustments, cost-containment strategies, and vendor partnerships, these efforts barely address the underlying problem. The employer-sponsored insurance system keeps workers from making health-care decisions and forces them into federal one-size-fits-all plans that may not provide the best value or coverage for their needs. Congress should shift the tax advantage from employers to employees to empower patients and allow them to place these pre-tax dollars directly into their HSAs for expenses related to health care. This would introduce market competition, since workers could control their spending. Individuals could shop for care and insurance, forcing sellers to compete for their business. Introducing competition would drive down prices, improve care service, and allow consumers to make informed choices that reflect their needs. This would bring true transparency to health-care pricing as individuals spend their money, creating downward pressure on prices. Empowering patients to make health decisions would help cure America’s critically ill health-care system. By restoring American workers’ right to spend their money, we would increase choice, lower costs, and further incentivize health-care providers and insurers to improve services. Shifting to a consumer-driven model through no-limit HSAs is a crucial first step to fix the system. Employer-sponsored health insurance is increasingly unsustainable. As employers (and many employees, too) brace for a large increase in health-care costs in 2025, the need for reform is critical and immediate. By giving workers control of their $23,968 hard-earned money, we can unleash the power of the free market to empower patients and revitalize a failing health-care system. Originally published at The Freemen News-Letter.
Would you ask a hungry fox to guard the henhouse? Of course not. For the same reason, Americans should be very wary when “Congress debates solutions to soaring [healthcare] bills.” Most people do not believe that the mainstream media reports honestly and objectively. Some still do, likely due to some residual credibility that may cling to the highly partisan, opposite-of-objective misinformation masters called the legacy or complicit media. Consider the facts. Reporter Samantha Manning of CMG Washington News Bureau announced that Congress will discuss how to solve the problem of unaffordable healthcare prices. “Unaffordable” applies to both individual Americans and the nation. Last year, the U.S. spent $4.8 trillion on its healthcare system, an amount greater than the entire GDP of Japan, which added $2.24 trillion to a Biden-Harris record debt of $33.17 at the end of 2022. The average U.S. family healthcare costs in 2023 were equally unaffordable, a staggering $31,065. To call healthcare bills “soaring” is no exaggeration. Where is the money going? Are the doctors responsible for “price-gouging,” to use V.P. Harris’ phrase? Data shows that payments to doctors – “allowable reimbursement schedules” released by Centers for Medicare and Medicaid Services (CMS) – pay only a small fraction of physicians’ published prices. In many cases, physicians in their offices are paid below the cost of doing business, which is why solo practitioners have been driven out of practice. If not to physicians or hospitals, where is the money going? Studies estimate that between 31 percent and more than 50 percent of U.S. healthcare spending does NOT pay for patient care! It pays for BARRCOME – bureaucracy, administration, rules, regulations, compliance, oversight, mandates, and enforcement. In other words, Washington pays its bureaucrats $1.5 trillion to $2.4 trillion “healthcare” dollars, taking those dollars away from patients, taxpayers, and health care providers. For proof, look no further than the Affordable Care Act (ACA). To pay for all the BARRCOME, such as 50 state Health Exchanges (Dr. Deane was a Director), the ACA took $716 billion from the Medicare Trust, money intended to pay for seniors’ in-hospital care. When most people read about a congressional commission to curb healthcare fraud, new rules to activate price transparency, or the recent legislative effort to reduce healthcare spending, they think price lists just appear. Recouping fraudulent medical bills is not free, and we’re already paying the salaries of members of Congress, so how can a new commission cost money? When the government does anything, it costs taxpayers and people in the marketplace lots of money and other resources. The Mueller investigation into the Russia Collusion scam by the Hilary Clinton campaign cost $32 million plus 2 ½ wasted years. Washington paid $80 billion to Pfizer for a self-styled CoViD “vaccine” that didn’t work and harmed the health of millions. The ACA cost $2.6 trillion. Bernie Sanders admits his Medicare-for-All plan could cost $40 trillion, which represents one-third of the combined productivity of all nations on Earth. Imagine how much more care providers could have given patients with $32 million plus $80 billion plus $2.6 trillion, or how much more money could stay in people’s pockets. Every time Congress legislates a fix for our failing healthcare system, three things happen. First, they move us closer to national insolvency by spending trillions of more dollars we don’t have. Second, they worsen the doctor shortage and make it more difficult for families to pay expenses by taking money from paying care providers to compensate bureaucrats. Third and worst, with each new regulation, access to medical care goes DOWN – the seesaw effect. Paraphrasing an old beer commercial, spend more, less care. This is why the old aphorism applies. Would you ask the fox to watch the henhouse? That is the same as expecting Washington to reduce healthcare spending. Originally published at The Freemen News-Letter.
Vice President Kamala Harris, the current Democratic presidential candidate, has proposed price controls for food and groceries—a destructive idea that should be rejected. However, the current administration has already imposed price controls harming Americans, particularly seniors, by controlling healthcare prices under the Inflation Reduction Act (IRA). Initially promoted as a solution to rising healthcare costs, the IRA has become a financial albatross, especially for seniors. With a staggering price tag of over $1.2 trillion, the IRA was sold as a necessary measure to curb inflation and lower healthcare costs. It has only exacerbated the financial strain on the people it claimed to help, however. One of the IRA's most glaring failures is its sweeping changes to Medicare’s drug benefits. These changes were intended to make the benefits more robust by eliminating beneficiary cost-sharing at a much lower out-of-pocket limit. Instead, this policy shift has inadvertently transferred significant financial risk onto health plans, leading to unintended consequences, the most notable being a sharp increase in premiums. The IRA was supposed to save patients money by allowing Medicare officials to set drug prices. However, this provision primarily reduces government expenditure rather than lower costs at the pharmacy counter. This has resulted in immediate premium hikes, with the promise of savings deferred to years later—a classic bait-and-switch. Seniors are paying more now for future benefits that may never materialize. This surge in premiums is directly linked to the government’s increased involvement in setting drug prices. By imposing de-facto price controls, the IRA has reduced the funding available for developing new treatments and has inserted more bureaucracy between doctors and patients. This interference disrupts the healthcare market's delicate balance, where supply and demand should dictate prices and innovation. Moreover, the IRA’s impact extends beyond just premium hikes. Medicare beneficiaries are now facing the lowest level of plan choice ever, with many plans exiting the market. This reduction in options and higher costs leaves seniors with fewer and more expensive healthcare plans. The promise that the IRA would make healthcare more affordable rings hollow as seniors are forced to navigate a market with diminished competition and escalating costs. These poor policy choices have contributed to Medicare Part D premiums increasing by 21% this year, with expectations of a 50% rise next year. This stark increase directly contradicts the IRA’s initial promises and places an undue financial burden on seniors who can least afford it. Furthermore, the number of available prescription drug plans has plummeted, with nearly 100 plans disappearing last year alone. Medicare Advantage recipients may face an additional $400 per year in costs, a harsh reality as inflation erodes the purchasing power of seniors and all Americans. The consequences of these policies are not confined to the healthcare market. The IRA’s expansive scope and high costs are emblematic of government overreach that stifles economic freedom and burdens taxpayers. The act misallocates resources by funding unreliable green energy projects at taxpayers’ expense and imposing hefty new taxes on businesses, further straining the economy. The IRA’s Medicare policies are hitting seniors hard, despite the administration’s claims of lower costs. A free-market approach offers a viable alternative to this heavy-handed government intervention. The healthcare system can become more innovative and affordable by reducing regulatory burdens, allowing market forces to set prices, and promoting competition. Policies should focus on removing obstacles for Medicare Advantage plans to negotiate better prices and increase the number of healthcare providers by eliminating unnecessary regulatory barriers like certificate-of-need laws. Ultimately, the solution lies in embracing economic freedom and limiting government intervention in healthcare. History shows that government solutions often exacerbate the very problems they aim to solve. The IRA’s failures underscore the need for market-based policies that prioritize individual choice, innovation, and quality patient care over bureaucratic control. By doing so, we can ensure that seniors receive the care they need without the prohibitive costs imposed by misguided government policies. Originally published by Real Clear Health.
By Vance Ginn & Deane Waldman August 27, 2024 Affordability of health care in the U.S. has been declining, reaching its lowest point since 2022, with no signs of improvement. This stark reality underscores the urgent need for a healthcare system that prioritizes timely access to affordable, high-quality care. To achieve this goal, the government needs to step aside and empower We the Patients. In fact, Americans need exactly the opposite of what Candidate Harris intends to do if she gains the oval office. She plans to expand Washington’s role in Americans’ health (medical) care. The U.S. spends an astonishing $4.8 trillion annually on healthcare. But here's the truly shocking part: more than half of that huge expense produces NO patient care! It does not pay for essential services like doctor visits, hospital stays, medications, mental health care, and home health care! Two point four trillion “healthcare” dollars are wasted on administrative costs and regulatory compliance. This useless spending not only inflates costs but also diverts resources away from patients, contributing to delays in care and, tragically, to what is known as "death-by-queue," where Americans die while waiting for care they desperately need. Many healthcare providers find themselves trapped in a system driven by perverse incentives. The third-party payment structure rewards dollar efficiency over medical effectiveness, and volume over value. This misalignment leads to unnecessary tests and procedures, over-treatment, and a general focus on quantity rather than quality of care. We need a shift to value-based care, where the definition of value is determined by patients and providers—not by an externally imposed financial metric. When patients have control over what is considered valuable, providers are incentivized to focus on their patients rather than following federal rules. The result is better health outcomes at lower costs. This approach aligns patient well-being with financial rewards, promoting preventative care and chronic disease management, which can reduce hospitalizations and improve overall health. However, a significant obstacle to achieving this vision is the heavy hand of government regulation. The regulatory environment in healthcare dramatically increases costs and restricts access to care by siphoning money away from patients to fund bureaucratic overhead. Streamlining and eliminating unnecessary regulations could foster a more competitive market, driving efficiency, effectiveness, and innovation. Restoring financial control to patients is crucial. While price transparency is often touted as a solution, it won't lead to real savings unless patients—not third parties—control their health care spending. Currently, third-party payers make most of the medical decisions, stripping patients of their autonomy and resulting in frustration and poor outcomes. Eliminating restrictions on Health Savings Accounts (HSAs) and other consumer-directed health options can empower patients with financial control, incentivizing them to seek cost-effective care. The employer-supported health insurance model is another area ripe for reform. This system, a relic from World War II when wage freezes forced companies to offer health insurance as a benefit, is outdated, limits patient choice, and increases costs. Today, the average cost of employer-provided health insurance is $18,328 per employee. This money would be better spent if given directly to employees, still tax-advantaged, and made available for deposit into an unlimited Family HSA. With these funds, Americans would have the financial freedom to shop for direct-pay care, creating competition among providers and driving prices down. Technology also holds great promise for revolutionizing healthcare delivery. Telemedicine, for example, was a critical lifeline during the COVID-19 pandemic, providing access to care while reducing the strain on traditional healthcare facilities. It has also proven invaluable in reaching rural and underserved urban areas, where access to healthcare is often limited or non-existent. By fostering technological innovation, we can further increase the effectiveness and efficiency of healthcare delivery, lower costs, and expand access to those who need it most. The U.S. healthcare system is plagued by a "cancer" of ever-expanding bureaucracy and a third-party payment system with misaligned incentives. To cure this, we must reduce government over-regulation and return financial as well as medical control to We the Patients. This shift will instantly align incentives, reduce wasteful government spending on bureaucracy, and deliver timely, affordable care to many more Americans. The path forward is clear: give control back to the patients and doctors. Let them decide what care they need and how they want to pay for and provide it. For the medically vulnerable, state-created and -run, not federal one-size-fits-all, safety nets. By doing so, we can finally achieve the goal of delivering high-quality, affordable care to everyone. Vance Ginn, Ph.D., is president of Ginn Economic Consulting, host of the Let People Prosper Show, and previously chief economist of the Trump White House's OMB. Follow him on X.com at @VanceGinn. Deane Waldman, M.D., MBA is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of New Mexico Health Insurance Exchange; and author of 12 books, including multi-award winning, Curing the Cancer in U.S. Healthcare: StatesCare and Market-Based Medicine. Improving Patient Health Care from a Market-Based Approach with Deane Waldman, MD | LPP Show Ep 1088/6/2024
Join me for Episode 108 of the Let People Prosper Show to learn how removing government obstacles in the healthcare system can improve patient care with Deane Waldman, MD, MBA, author of Curing the Cancer in U.S. Healthcare and other books, as well as more than 250 articles and monographs. Subscribe, share, and rate the Let People Prosper Show, and visit vanceginn.com for more insights from me, my research, and ways to invite me on your show, give a speech or other opportunities.
My Interview of Dr. Deane Waldman: Fireside Chat on Why Price Transparency Won’t Work (But could...)5/3/2024
Watch this interview that I did with Dr. Deane Waldman on the costs and benefits of mandating price transparency by hospitals and whether it will result in anything productive at the Third National Health Care Transparency & No Surprise Act Summit, This interview was aired at https://www.hctransparencysummit.com/.
Healthcare Costs Are Straining Federal And Household Budgets. Here’s How Biden Can Rein Them In2/14/2024
Originally published at Daily Caller.
Soaring health care spending continues to spiral up, tightening the financial noose on households and government coffers. Families are forced to make difficult choices between paying for essential medical care and meeting basic needs while the federal government struggles to rein in spending amid mounting debt. These soaring health care costs must be addressed with market-based approaches before it’s too late. When the Affordable Care Act (ACA) was passed in 2010, it was heralded as the panacea for reining in healthcare costs. However, the law’s complex regulations and mandates have contributed to administrative bloat and increased overhead costs, ultimately driving up premiums and out-of-pocket patient expenses. Unfortunately, since then, subsequent politicians have failed to correct course. In 2024, federal spending on Medicare, Medicaid, and ACA subsidies will likely exceed the discretionary budget, posing a significant threat to long-term fiscal sustainability. Compulsory spending on health coverage in the private sector infringes upon household earnings. This exacerbates economic challenges for families whose purchasing power is already reduced, as inflation-adjusted average weekly earnings are down 3.1 percent since Jan. 2021. Moreover, the growing burden of health care spending poses a significant threat to long-term fiscal sustainability, as rising debt levels raise concerns about future economic prosperity. The Congressional Budget Office (CBO) recently released its annual Budget and Economic Update, painting a grim budget picture. The trajectory is alarming, with expenditures expected to be $6.4 trillion this fiscal year before soaring to a staggering $10.1 trillion by 2034. Also, net interest spending is poised to balloon from $1 trillion to $1.6 trillion by 2034. These projections underscore the urgent need for meaningful reforms to rein in healthcare costs and put the federal budget on a more sustainable path. To address these challenges, policymakers must prioritize fiscal responsibility and adopt measures to remove government as much as possible from healthcare. This would help to quickly get healthcare back to a relationship between a doctor and patient. Today, too many middle layers rob time between the doctor and patient and raise healthcare prices. Policymakers should make market-based reforms. It won’t be done overnight, so there will need to be some steps to get there. It would be great if just making healthcare prices transparent would solve the problem. But the healthcare system is much more dysfunctional than that, unfortunately. Many reimbursement rates are set between doctors and private insurance companies or government programs like Medicaid and Medicare. Those reimbursement rates are so different depending on which entity is negotiating that the prices won’t tell us much, other than how screwed up the system is, but we already know that. A market-based approach should remove obstacles on the demand and supply sides of the market. This should include ending the tax exclusion for employer-sponsored health insurance. There’s a long history of this exclusion, which started during WWII. But while it had good intentions, the result has been a major distortion to the healthcare market. There should also be consideration of a voucher program for Medicare and block grants to states for Medicaid with limited growth each year. These would help reduce the moral hazard and over-subsidization on the demand side. On the supply side, the federal and state governments should remove rules that restrict the supply of doctor offices by removing certificate of need laws. They can also boost the supply of physicians by reducing or eliminating occupational licenses. Unleashing supply and imposing market forces on demand will result in more innovative, affordable, and accessible care for everyone. The resulting reduction in government spending and improved timely access to quality care can help support more prosperity. This would reduce the need for people on government safety net programs. It would also help mitigate higher prices, alleviate strain on household budget burdens, and safeguard the nation’s economic future. These steps will require difficult choices and bipartisan cooperation at the federal and state levels, but the stakes are too high to ignore the issue any longer. |
Vance Ginn, Ph.D.
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