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The Proper Principles of Health Care Reform

Arthur Astorino, Jr., MD
Peter LePort, MD
Cristina Rizza, MD

July 1994

Most health care reform proposals offered today state that "Universal Coverage" is a "principle" that will be used to solve the problems in health care. However, this is not a principle, but a goal. Every country that has implemented guaranteed medical coverage has also instituted rationing to control costs. Moreover, in each of these countries, whether England, Germany, Canada or elsewhere, the quality of medical care has deteriorated while actual access to it has decreased.

Our plan's overriding principle is respect for human life through the protection of individual liberty. Its basic goal is to return to the individual the right to decide how any money spent to provide for his or her medical care will be spent. No individual or group, whether a patient, a physician or a company, is forced to participate against their wishes in any aspect of medical care. Only such an approach, one based on the moral principles of individual rights and personal responsibility, will allow free-market forces to operate in medical care, thus providing universal access for all Americans to the world's best medical care.

Most health care reform proposals recognize problems such as increased costs, job lock, uninsurable individuals, etc. They don't recognize their underlying causes, thus their solutions rely on controls by bureaucracies. They believe health care spending is determined by needs, as if it is independent of price, and therefore, rely on panels of experts to determine all needs and set all prices based on centrally determined costs.

AFCM, on the other hand, supports the position that health care spending must be determined by choices among competing alternatives, giving patients the power to choose between health care and other uses of money. Most other proposals argue that individuals are not smart enough or knowledgeable enough to make wise decisions when it comes to choices in health care. AFCM admits that choosing a doctor or treatment plan can be a complicated decision, however, it is more complicated to vote for the right politician to select the right bureaucrat to select the right doctors, hospitals and treatment options for us.

In short, most proposals look to government for the solution and empower the bureaucracy; AFCM looks to private citizens for the solution and focuses on the decisions individuals make and the incentives they face when they make them.

AFCM recognizes that the fundamental problem of American health care today is government intervention. The government injects its power to force people to do things that they would not choose to do on their own, to influence transactions among patient, doctors, hospitals, and insurance companies. The main ways government does this are through: 1) tax laws that discriminate against individuals; 2) government medical care programs substituting for private charity (see "Health Care Is Not a Right" by Leonard Peikoff; and 3) restrictive licensing and regulations. AFCM proposes the following solutions:

1. Tax policy without distortion: All medical-related expenses will be equally tax-deductible for all individuals, as opposed to the present system, which favors groups over individuals (see Milton Friedman's article "The Folly of Buying Health Care at the Company Store.")

2. Individual ownership of health policy: Participation in any health care plan will be freely chosen by the individual (not compelled or encouraged by the government), so that the individual, not the government or an employer, will typically own his own policy. This will produce personal, portable, permanent and actuarially fair insurance for medical catastrophes.

3. Health Savings Accounts: Individuals will be allowed to save tax-deductible dollars in a tax-free account, which they control to pay for current and future medical expenses, including medical insurance. This plan does not take away any of your current choices. Indeed, HSAs broaden your choices. You may purchase any insurance plan with your HSA, including private, HMO or PPO.

4. Privatization of all government programs: The principle of Health Savings Accounts are applied to Medicare and Medicaid. Eligibility for entering the programs are phased out over a 30-year period.

5. Revival of private charity through tax credits: During the 30-year phase-out of government medical programs, all charitable dollar donations dedicated to health care will be tax credits to the individual or entity making the donation. This will encourage charitable organizations to devote portions of their time, effort and means to medical needs. It will encourage hospitals to set up charitable programs and physicians to do the same.

6. Liberalization of licensing and deregulation of all aspects of medical care: We must first stop any further intrusion by government into the market. Then we must start a process of deregulation. This goal comes from the recognition that the individual patient, not government bureaucrats, is the best person to decide who is or is not qualified to provide their own medical services, the nature of their own insurance policies, etc.

7. Malpractice reform: Medical malpractice judgments should be only on the basis of negligence, not of poor outcome.

Under AFCM's plan for instituting free-market medical care, every individual will have the opportunity to access health care without a guarantee of coverage. All those presently made dependent on government services will remain covered. Privatization of that coverage will provide greater choice, quality and economy. Those who have paid into the government system will have access to a government system during the phase-out period. Those unable to obtain coverage through no fault of their own during the phase-out period will have access to the HSA program. A private charity program will be encouraged, so that all those who cannot afford medical care once the free market has been reinstated will be able to obtain it. Those who choose not to seek coverage for their future medical needs through the free market programs will be free to do so with no risk to the rest of society; they only risk having to rely on private charity, should a medical catastrophe occur that they cannot afford. [No new laws are required to throw them in jail, or fine them, for exercising their liberty to choose not to be covered. Penalistic laws are required in all plans that mandate coverage.]

A plan based on the above values and objectives will give the maximum security possible under any system of providing medical care. It places the responsibility, control and incentives for health care onto the individual. It allows the individual purchasing decisions of millions of cost-conscious Americans to set the value of the goods and services in medical care and medical insurance. This is the brilliance of the American free-enterprise system. No bureaucracy can replace the wisdom of the billions of medical decisions made by individuals each year looking after their own interest with their own resources.

AFCM's plan relies only on the free market, avoiding any government controls and regulation. It gives free rein to individual genius, ingenuity and entrepreneurship. It does not violate a single individual's rights as defined under our Declaration of Independence and Bill of Rights. Since 1776 America has set the standard for freedom. At this time in history, the rest of the world is recognizing its value. It is ironic that today some leaders in America want to base our health care system on socialistic models (e.g., single payer, employer mandates, community rating, "managed competition," etc.) that are doomed to fail.

Failure of such plans is a result of their immorality in destroying real individual rights. Only a plan such as AFCM's, based on the American values of individual liberty, personal responsibility and non-coercive free markets, can provide us with the best medical care that the thought and effort of Americans can create.

Drs. Astorino, LePort and Rizza are physicians in private practice and members of the Boad of Directors of Americans for Free Choice in Medicine.

This article was published in the July 1994 print edition of AFCM's newsletter, Pulse.


Copyright © 1994 Americans for Free Choice in Medicine. All rights reserved.
For reprint permission, contact AFCM.



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