I must confess. I’m usually not an eager reader of Cato Institute publications. Many of them come off as overly-wonkish, Chamber of Commerce-approved reports. But I had heard good things about Charles Silver’s and David A. Hyman’s new book, Overcharged: Why Americans Pay Too Much for Health Care, and decided to give it a good cover-to-cover read. I’m glad I did.
It is easy to get angry reading this book. I’m sure my blood pressure increased a few points as they went through their litany of examples of fraud, waste and abuse, across both public (Medicare, Medicaid ) and private insurance systems. But it is an argument that must be made and that everyone should hear: Our system of 3rd party payers desensitizes healthcare consumers to costs and encourages over-consumption. This is encouraged by political control over the public programs, which is captured by the healthcare industry, to maximize the amount of taxpayers dollars transferred to this sector. The end result is the overly-costly system we have today. It is working by design.
The solution? The authors propose a range of approaches, from the Singaporean model of mandatory personal health savings accounts topped of by government contributions for the poor, a system of “prizes” for new drug development instead of patents, spurring market-based competition from private hospitals and clinics , domestic and international (the Surgery Center of Oklahoma and the Narayana Health Hospital in Bangalore both get props), and in general, focusing more on 1st party, individual spending for routine and predictable medical expenses, from band-aids to pregnancies, reserving 3rd party insurance for truly unforeseen catastrophic cases.
Of course, the authors drive home the point that the “medicare for all” option, being discussed in some circles today, would just double down on failure. I’d highly recommend this book for anyone who wants to win the argument the next time their Facebook friends spout off about the supposed virtues of such an expansion.
One last thing — The book, aside from the importance of the argument it makes, is a damn good read as well. It is well-organized, keeps a good pace, the examples are vivid and memorable, and in general, it keeps the reader’s attention.