Wednesday, April 30, 2008

McCain unveils health care plan

McCain's proposal calls for:
  1. ending the link between employment and health insurance
  2. paying providers for outcomes, rather than procedures
  3. allowing drug reimportation
Comments:
  1. If consumers have to shop for insurance directly, rather than with other people's money, they will choose cheaper plans with bigger co-payments, which would likely reduce price inflation. UPDATE: evidence here.
  2. If we can measure performance, then this would reduce moral hazard by linking pay more closely to performance; and
  3. This would likely end price discrimination. The big losers will be foreign countries, e.g., Africa, that currently buy drugs very cheaply.
DISCLAIMER: I am supporting McCain

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