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05 June 2011

Paul Ryan’s Misdirected Health Economics

Cost-cutting will not achieve the goal of health care reform. As long as this model is followed, either on the national or on the local level, as favored by Alain Enthoven in the June 3, 2011, Wall Street Journal, health care in the U.S. will continue to operate as an expensive candy store. The object of the nation’s health care system ought to be to help citizens improve their life experiences, and not to show how good our health care industry is at curing their illnesses.

The main cause of our high cost of health care is inarguably the self-destructive life style of many Americans. Improvement of peoples' living habits should be the primary aim of our country's health care reform. I don't think that tax incentives or penalties will accomplish this. Rather, it will require devoting a significant portion of the HHS budget to innovative education programs.

The fee-for-service model of Medicare certainly contributes to the high-cost problem. It acknowledges that our health-care providers are considered to be purveyors of medical treatments, procedures and devices. Instead, they need to be designated as “shepherds of the flock,” with responsibility for guiding patients to live healthful lives and not only for intervening when something goes wrong.

Medicare’s payment model must be reformed to orient doctors’ and other providers’ financial incentives towards building healthy clientele who ultimately need fewer and less expensive medical interventions. This will probably not be popular with organizations like the AMGA. However, it would help reduce the cost of achieving the healthful results that a rich society like ours should be able to afford were we not so self-indulgent.

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