We need to do a major rethink of healthcare policy in the United States and in Washington if we are ever going to solve the problem of exploding health-care costs.

First, we need to fight any further federalization of health-care policy. Federal policies are a major source of the pathologies in our health-care system. Federal laws increase many of the problems they were meant to address, they produce a host of new problems, and they render states powerless to fix anything. The Affordable Care Act is only moving us further in the wrong direction. Our experience with health care is proof that centralized planning by politicians and bureaucrats simply doesn’t work.

Libertarians favor returning health-care regulation to the states. In addition to eliminating many of the laws, regulations, and tax rules that wreak havoc on the incentives faced by businesses and employees, we also need policy freedom at the state level with regard to public spending on health-care for the poor and elderly. Let Washington take care of Washingtonians. We can succeed where federal programs have failed and achieve better health outcomes at much lower cost to taxpayers.

Libertarians favor a three-part approach to overhauling public health-care spending:

  1. Focus on catastrophic, not comprehensive, insurance/care. Comprehensive insurance programs are ridiculously expensive, but the benefits in health outcomes do not justify the cost. The most salient benefit is protection from financially ruinous catastrophic health problems, which can be provided at much lower cost by catastrophic insurance.
  2. Focus public spending on mental-health care. Studies suggest high returns on public spending on mental health.
  3. Focus on cash subsidies. Rather than having bureaucrats decide what services should be available and at what cost, providing cash subsidies gives patients greater flexibility to meet their individualized health-care needs and restores market incentives to keep costs down and to innovate in the provision of services.

Second, we need to recognize that the federal government is not the only source of bad laws that undermine a well-functioning health-care economy. There are numerous examples of state laws and regulations that are designed to insulate market incumbents from competition and protect their profits. This is true in many industries, which is why ending crony capitalism is a major feature Libertarian campaign, and the health-care sector is no different.

A major example of bad state regulation is the “Certificate of Public Need” regime. Before a health-care provider can offer a new service or purchase a major piece of new equipment, it must prove to a state bureaucracy that there is a “public need” for the additional services being offered. The state bureaucracy exercises discretion under the influence of protectionist lobbying. The result is a process that is costly, counter-productive, and patient-harming. It snuffs out job-creation, entrepreneurship, and cost-saving innovation. It is totally unnecessary. The very fact that an entrepreneurial physician, or other service-provider, is willing to take on the business risk of making a major capital expenditure and offering a new service should itself be sufficient evidence of public need. The regulatory regime offers no additional benefits to the public, only private benefits at public expense.

In the same vein, the licensing and accreditation regime for doctors, nurses, and other health-care professionals needs to be revamped. Licensing and accreditation now serve the purpose of cartelizing the professions and, together with other regulations, reduce the supply of health-care providers, driving up costs for patients.

Expanding and Focusing on Mental-Health Care

I am committed to pursuing health-care reforms that improve health outcomes while reducing costs.

Let Washington take care of Washingtonians

Federal laws and regulations undermine competition and innovation in the health-care industry. State governments cannot undo these counter-productive policies, and in fact add their own to further undermine a well-functioning health-care market, resulting in increased costs without improved health outcomes. Moreover, political control of health care ends up siphoning money into whatever is politically popular, rather than what is most beneficial. Mental health consistently gets the short end of the stick.

Bring the power back to the state.

Libertarians strongly advocate a return of health-care policy to the states, either directly, or through conversion of Medicaid into block grants to the states with policy freedom at the state level, or via waivers allowing Washington to redesign our programs more intelligently.

Removing the stigma of mental illnesses.

Many voters with mental illnesses have lamented the social stigma that goes along with having a mental illness. But attitudes are changing, especially at the generational level. Young people are increasingly understanding of mental illnesses, including of the science behind them and the use of drugs, therapy, and other methods to treat them. Libertarians are best equipped to facilitate this social change in the understanding of mental-health issues and those that suffer from them.

Removing state-level barriers to health-care service provision.

As noted above, state governments often exacerbate the problems stemming from federal mis-regulation of health care. Washington is no different. State-level regulations have numerous damaging effects that reduce the availability of services, increase costs, and decrease competition and innovation. The over-regulation and mis-regulation of health-care professionals via increasingly onerous licensing requirements, restrictions on what those professionals can do, and centralized planning of the use of medical resources all work to harm patients, especially those suffering from mental-health issues. We must revisit our state-level laws and regulations, not just focus on federal policy and implementation of the Affordable Care Act.

How Medicaid and Obamacare Hurt the Poor – And How to Fix Them

Curing the Healthcare Crisis

Please share this post. We can't spread liberty without you!