A Successor To The Senator From Disney

Running On Ideas (washingtonpost.com)
It will be nice to see Fritz Hollings leave the Senate. It will be even better to see him replaced with a free trade advocate from a textile-heavy Congressional district. He also has some ideas on how people have become entirely too dependent on government. There are some good comments on how health care can be made more efficient through the use of HSAs as well.

DeMint’s fear, that dependency produces “learned helplessness,” echoes Tocqueville’s warning about government keeping people “fixed irrevocably in childhood,” rendering “the employment of free will less useful and more rare.” It is, Tocqueville said, “difficult to conceive how men who have entirely renounced the habit of directing themselves could succeed at choosing well those who will lead them.”

In the context of a welfare state devoted to assuaging the insecurities and augmenting the competencies of its citizens, conservatism’s challenge is to use government — collective action — to promote individualism. DeMint believes dependency can be countered by policies that foster attitudes and aptitudes requisite for independence. He favors applying to public policy the axiom that “no one washes a rental car.” Which means: Ownership encourages rational maintenance of resources. Consider the pertinence of this to health care.

DeMint was one of 25 doughty House Republicans who, resisting intense White House pressure, voted against the Medicare prescription drug entitlement, partly because of its cost. And this was before the administration’s “$130 billion ‘oops!’ ” — the projection of a 10-year cost that much higher than anticipated.

But DeMint says the Medicare bill’s provision for individual health savings accounts is “the grain of sand in the oyster,” from which a pearl of progress may emerge. Containing costs is a prerequisite for progress — in broadened access to care and in research that produces better medical technologies.

The key to cost containment is turning patients into cost-conscious health care shoppers, with a personal financial incentive to reduce the “optional” medical problems arising from known risky behavior (imprudent eating, drinking, smoking and driving, inadequate exercise, unsafe sex). Moving away from a third-party payer system means giving individuals ownership of personal health care resources — those health savings accounts — which they will have an incentive to husband.

Why has the cost of laser eye surgery fallen 22 percent in four years? For the same reason the cost of cosmetic surgery has been rising more slowly than the inflation rate. These elective procedures are generally paid for by individuals from their own resources.

DeMint is stressing principles that candidate George W. Bush enunciated in 2000, when he contrasted “two visions of government: a government that encourages ownership and opportunity and responsibility or a government that takes your money and makes your choices.” DeMint’s empowerment agenda includes personal ownership of accounts investing a portion of Social Security taxes and ownership of tax-preferred education savings accounts.

Another possibility is reform among employers, though I’m not sure how this would come about. Suppose you have a salary of $77,000 and your employer also pays $23,000 for your benefits — not entirely off the mark. Imagine your employer telling you that he would pay you $100,000 and from this you would choose how much you wish to spend on benefits. Employers spend as much as $10,000 a year on health care per employee. That’s about $800 a month.

Given a menu of options, you could choose how much you wish to spend on health care. You could opt to pay for drugs out of pocket and have a catastrophic care policy for hospital care. More disposable income for you and a cost savings for the employer over years. The health care industry would benefit as well. Right now people are too insulated from the cost of their care and this option would help fix it.

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