The father of the Laffer Curve, the discredited theory that giving the rich a tax break will stimulate the economy, has weighed in on the health care debate.  Through the Texas Public Policy Foundation he has issued a plan for the health crisis.

Dr. Laffer’s research concluded that the current proposals being discussed in Washington would:

• raise total federal government expenditures by 5.6 percent more than otherwise, adding $285.6 billion to the federal deficit in 2019;

• increase national health care expenditures by an additional 8.9 percent;
• raise medical price inflation 5.2 percent above what it would have been otherwise;
• slow U.S. economic growth in 2019 by 4.9 percent less than the baseline scenario of doing nothing;
• increase the current net present value of funding health care reform based on President Obama’s priorities by $1.3 trillion (due to higher medical inflation and expenditures), or $ 4,354 for every man, woman, and child in the U.S.; and
• still only insure about one-third of those currently without insurance – at a cost of approximately $62,500 per new person insured.

Dr. Laffer says there are many solutions available to better the health care system without destroying what already is good in the system. The path to true health care reform is through patient-centered solutions, which emphasize the patient-doctor relationship and work to shrink the wedge by allowing patients and doctors to make more effective and economical health care choices. These solutions include:

• Provide for individual ownership of insurance policies – the tax deduction that allows employers to own your insurance should instead be given to the individual;
• Better leverage Health Savings Accounts (HSAs) – HSAs empower individuals to monitor their health care costs and create incentives for individuals to use only those services that are necessary;
• Allow interstate purchasing of insurance – policies in some states are more affordable because they include fewer bells and whistles; consumers should be empowered to decide which benefits they need and what prices they are willing to pay;
• Reduce the number of mandated benefits insurers are required to cover – empowering consumers to choose which benefits they need is only effective if insurers are able to fill these needs;
• Reallocate the majority of Medicaid spending into simple vouchers for low-income individuals to purchase their own insurance – an income-based sliding scale voucher program would eliminate much of the massive bureaucracy that is needed to implement today’s complex and burdensome Medicaid system and produce considerable cost savings;
• Eliminate unnecessary scope-of-practice laws and allow non-physician health care professionals to practice to the extent of their education and training – retail clinics have shown that increasing the provider pool safely increases competition and access to care and empowers the patient to decide from whom they receive their care; and
• Reform tort liability laws – defensive medicine needlessly drives up medical costs and creates an adversarial relationship between doctors and patients.

This is what he envisions as the cure to the crisis.  Amazingly it sounds a lot like the “new” GOP health plan.  (check out my post, “Finally, A GOP Health Plan”)   I see that he apparently won the favor of Ronald Reagan and has been the go to guy every since when the GOP needs some way to attack the Dems on economic issues.

All the criticism aside, Laffer has a new phrase from which to use the bully pulpit, the Health Care Wedge:

health care wedge – a separation of effort and reward by which a patient understands the true costs of their health care and is therefore driven to be more efficient in his or her spending. This separation is actually the reason health care costs are skyrocketing, according to Dr. Laffer.

Now did you understand what he is saying? …. (Pause for contemplation)….(zzzzzzz)…..oh my bad I dosed off there for a moment….there is nothing in his words that would lead the average person into a lather….he is a typical phD…….talks with words that NO one understandsa not even him.