Saturday, August 30, 2008

Sarah Palin on Health Care--A Free Market Republican

Republican vice-presidential candidate Sarah Palin has very little on her health care policy resume from her short time in office as Alaska's Governor but what she does have fits right in with Senator McCain's strategy to use the market more effectively in bringing down America's health care costs and improving access to the system.

Her health care efforts have focused on two things in Alaska:
  • Eliminating the 1970s era strategy of requiring providers to file Certificate of Need (CON) applications before being able to build more health care facilities.
  • Providing consumers with more information.
On the Certificate of Need issue she recently wrote in an op-ed:

Health care: Do we have too much government or too little? Should we have regulated markets or open markets?

Those are the perennial questions.

And that's what makes the state's proposal to repeal the current Certificate of Need (CON) program so contentious. Yes, there are solid arguments on both sides. But after much consideration, we believe that the program has not accomplished what it set out ultimately to do more than 30 years ago -- lower costs for the consumer. It is time to end Alaska's program in its present form. Doing so will not only reduce the cost of health care, it will also improve the access to health care, allow more competition and improve quality of care for patients.

Certificate of Need programs were required in all states in the mid-1970s by federal mandate. The goal was to make sure that health care facilities matched community need and provided access and quality care, which in turn would help reduce health-care costs. The federal mandate was repealed in 1987 -- 20 years ago! -- along with its federal funding.

The basic assumption in those days was that excess capacity, in the form of overbuilding, directly results in health-care price inflation. However, after more than 30 years of such programs, the National Conference of State Legislatures has found that there is no solid proof that the state-sponsored CON programs have actually controlled health-care costs. In fact, in 2004 the Federal Trade Commission and the Department of Justice both asserted that these programs actually contribute to rising prices because they inhibit competitive markets.

Many opponents of CON programs have argued that health-care facility development should be left to the economics of each institution, in light of its own market analysis, rather than being subject to political influence...

As I said recently in my State of the State Address to the Legislature, "Under our present Certificate of Need process, costs and needs don't drive health-care choices -- bureaucracy does. Our system is broken and expensive." Eliminating the CON program, with certain exceptions, will allow free-market competition and reduce onerous government regulation.

Governor Palin has also been calling for more price transparency, openness and competition as a solution for rising health care costs in Alaska.

A task force set up by the Governor on health care issues in Alaska recently concluded that consumers needed more information to be able to compare costs.

As a result, Palin introduced the Alaska Health Care Transparency Act to provide consumers with information on quality and cost which would be provided by a new government-run health care information office.

Both of these relatively minor forays into health care policy could hardly be described as heavyweight attempts at health care reform. But both are consistent with the McCain market-based strategy to remake America's health care system.

I expect Governor Palin will have no trouble fitting right in with Senator McCain on the health care issue.

Related posts on the presidential candidates' health care plans:

Comparing John McCain's Health Care Plan to Barack Obama's Health Care Plan--What's the Big Idea Difference?

A Detailed Analysis of Senator John McCain's Health Care Reform Plan

A Detailed Analysis of Barack Obama's Health Care Reform Plan
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