70 year-long Healthcare Moral Hazard. Robert Graboyes @Mercatus

Apr 05, 2017, 02:55 AM

04-04-2017 (Photo: President Lyndon Johnson (right) Secretary of HEW John Gardner (second from left) and SSA Commissioner Bob Ball (left) received the first Medicare Part-B application form from a member of the general public, Mr. Tony Palcaorolla, of Baltimore, Maryland (next to President Johnson). Shortly after enactment of the legislation, SSA sent a mass mailing of application forms to all Social Security beneficiaries near or over age 65. Mr. Palcaorolla's completed and returned form was the symbolic first received from this mailing. September 1, 1965. SSA History Archives. Date Taken on 1 September 1965) http://JohnBatchelorShow.com/contact http://JohnBatchelorShow.com/schedules http://johnbatchelorshow.com/blog Twitter: @BatchelorShow

70 year-long Healthcare Moral Hazard. Robert Graboyes @Mercatus

Moving away from third-party payers is essential to control costs and improve quality, but increasing patients’ direct payments must be done with incentives in mind. • Deductibles have grown dramatically as a share of direct payments; however, deductibles do almost nothing to contain costs incurred by the small share of very sick patients who account for most healthcare costs. • Instead, public policy must return to equalizing the tax preference for health care between direct payment and third-party payment. • Importantly, the government should not mandate that health insurance cover “preventive care” or other costs that are within the reach of most households’ budgets, but instead should allow people to buy health insurance that covers only catastrophic expenses. • Government healthcare programs should operate on a voucher system: the government should transfer the means to pay to patients, who then pay providers directly. Reforms in this direction will greatly reduce the moral hazard and other unnecessary costs associ¬ated with third-party payment. Prices will come down, waste will shrink, and quality will improve. The only thing lacking is the political will to overcome the tyranny of the status quo. https://www.mercatus.org/publications/healthcare-spending-third-party-payment