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Some believe the only hope for cost control is to adopt a single-payer system as used in several other countries, even though the increasingly high costs of many of these systems look good only when compared with our unique disaster.
Whatever your views of the effectiveness of these approaches, in our exquisitely responsive political system, government intervention in health care has often allowed for giveaways to powerful industry interests. Inserted in the recent bill to delay the fiscal cliff was, for instance, a provision mandating the delay of scheduled reductions in the price of a dialysis drug. (Medicare has financed almost all dialysis treatment for 40 years, at extraordinary expense and questionable safety, a cautionary tale for how single payer would work in our system.) Those who think single payer will establish real discipline in the United States haven’t been to a political fundraiser or heard of the Iowa caucuses. They don’t understand how special interests already distort government reimbursement policies.
Here’s a completely different idea, one that might actually work. Let’s give every American health insurance, but only for truly rare, major and unpredictable illnesses. In other words, let’s cover everyone but not everything. It would take a generation to transition fully to such a system, but eventually the most routine and expected medical treatments, from checkups and minor illnesses all the way to common chronic conditions and expected end-of-life care, would be funded from our individual health savings; only the most major needs — for example, cancer, stroke and trauma — would be paid out of insurance.
Defining insurable events more narrowly and enabling Americans to use the premium savings to build health savings would reduce the distortions inherent in our insurance approach. Most important, it will also compel providers to compete on the basis of price, quality and service, as they meet the one force that creates real incentives for good performance, innovation and safety: the consumer.
David Goldhill is the chief executive of GSN, a media company, and the author of “Catastrophic Care: How American Health Care Killed My Father -- and How We Can Fix It.” He wrote this for the New York Times.