Welcome to The Heartland Institute’s Health Care Policy Issue Suite, a comprehensive resource for people who support a free-market approach to improving the nation’s health care system.

To the left of this essay are links to the Web site of Consumers for Health Care Choices, Heartland’s grassroots outreach effort; Consumer Power Report and Health Care News, our national outreach publications for the consumer-driven health care movement; Heartland Policy Studies, peer-reviewed original research on health care topics; Research & Commentaries, collections of the best available research on hot topics in the health care reform debate; Heartland books and booklets on health care; bios and contact information for experts on health care who work with The Heartland Institute; and links to individuals and organizations that support free-market health care reform.

Below those links is a “What’s New” feature that presents titles, short reviews, and links to research and commentary on health care issues most recently posted on Heartland’s Web site. This list is continuously updated, so we hope you’ll check it regularly.

Under those links is a list of subtopics that appear under the “Health Care” topic in PolicyBot, the database and search engine that resides on The Heartland Institute’s Web site. You can click on any one of those subtopics and see the titles, authors, date of publication, and short reviews of credible research and commentary from a wide range of sources. Then just click to open and read the entire article. PolicyBot is free, easy to use, and fast.

The essay below presents an overview of the debate over health care reform taking place today. It contains links to individual articles and subtopics in PolicyBot, so the reader can go into much more depth on the issues the authors address.

What Is Consumer-Driven Health Care?

A national debate is taking place over who should be in charge of your health care. Should it be you (the consumer), or should it be government agencies, insurance companies, and employers? Advocates of consumer-driven health care think individual consumers should in the driver’s seat. They ought to be able to choose their doctors, make informed choices, and be rewarded when they take action to stay healthy and avoid unnecessary utilization of health care services.

For the past several decades--since around the time of World War II--health care consumers have been losing their power over the health care they receive. Tax policies adopted during WWII created strong financial incentives for employers to choose what insurance their employees would get, and to insulate employees from the costs of their decisions. When prices started to rise, employers sought relief by giving insurers more power to limit access to care by enrolling employees in managed care and HMOs.

Governments also stepped in, taking away power from consumers. Medicaid, Medicare, and more recently the State Children’s Health Insurance Program (SCHIP) provide subsidized health insurance to millions of Americans, but at a steep cost: They bring with them a heavy load of regulations on providers, shift costs onto people with private insurance, and are crippled by fraud and excessive spending.

But in recent years, health care consumers have starting taking back power. A key policy that is making this possible is a federal law that allows people to pay for medical expenses from tax-sheltered Health Savings Accounts. These accounts “level the playing field” between employer-provided low-deductible insurance and individually owned high-deductible insurance. This enables more people to be able to afford to buy insurance, choose the type of insurance that best suits their situations, and choose doctors and other care providers.

As consumers being spending more of their own money and making their own decisions, the market is responding with better services and more choices. Some recent innovations include free-standing health clinics, specialty hospitals, and medical tourism. New technologies that promise to make health care more effective and affordable are reaching the market.

Single-Payer Plans

The opposite of consumer empowerment in health care is increased government control over health care decisions. Politicians get a lot of mileage out of promising “universal health insurance,” which usually is just another step toward a single-payer health system, similar to those in Canada and Britain and other countries.

The problems with single-payer health systems are many. They violate the freedom of consumers to choose doctors and treatments. They fuel unnecessary health care spending and price inflation, which can be stopped only with rationing by waiting. They create massive new government bureaucracies and increase administrative costs, waste, and fraud. And their costs destroy millions of jobs.

Insurance Reform

A major part of the debate over health care is how insurance companies are regulated. Health insurance is mostly regulated by state governments, and there has been a lot of variation in regulatory policies among the states, allowing us to discover what policies work and which do not.

Community rating--laws requiring that everyone pay the same amount for health insurance--and guaranteed issue--laws requiring that anyone who applies must be sold an insurance policy--are two types of regulation that have been tried repeatedly and found to cause more problems than they solve. Both policies increase the price of insurance and discourage young and healthier people from buying insurance. Benefit mandates--laws that require insurers to cover certain conditions--are another kind of counterproductive regulation.

Regulations that unnecessarily increase the cost of insurance are largely responsible for the high number of uninsured people today. The best way to solve the uninsured problem is to repeal unnecessary regulations, and then to fund high-risk pools that can provide subsidized insurance only to those who need it.

Prescription Drugs

Another area of controversy in the health debate involves prescription drugs. In general, prescription drugs are a blessing: They have played a major role in extending life expectancy and reducing the pain and suffering caused by disease. New innovations and programs such as disease management promise to produce still more benefits.

Some critics of the pharmaceutical industry allege that its prices are too high, that too much is spent on direct-to-consumer advertising, and that brand-name drug manufacturers use their patents to delay the marketing of inexpensive generic substitutes for too long. Some critics say importing drugs from other countries, which is now illegal, would reduce prices without compromising consumer safety. Many experts, however, believe prices are reasonable, advertising benefits consumers, patents are essential to rewarding innovation, and drug importation would pose a serious threat to drug safety.

Some states use restrictive formularies and complicated rebate schemes to limit access to drugs by those who rely on Medicaid. Medicare now gives seniors access to subsidized prescription drug insurance, a program that has been the subject of intense scrutiny and debate. And new drugs are regulated by the Food and Drug Administration (FDA), which has been strongly criticized for being too cautious in giving people access to promising new drugs.

Doctors and Hospitals

Physicians play a key role in the nation’s health care system, so it not surprising that their training, compensation, and regulation is the subject of much concern. They and other providers are heavily regulated by most states and by the federal government under Medicare. The threat of lawsuits for malpractice is an ongoing issue for policymakers.

Many doctors are upset about what they see as unwarranted intrusions by government and insurers into the doctor-patient relationship. Some have formed a network, called SimpleCare, that refuses to accept payment by insurance companies.