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1 1 (September 2017)

handle is hein.amenin/aeiaaew0001 and id is 1 raw text is: Bringing Market Discipline to Health Care Is Complex, Difficult, and Necessary By Joseph Antos and James C. Capretta September 2017 The provision of medical care is inefficient, which makes health insurance needlessly expensive. Market discipline can eliminate waste, but only if consumers have an incentive to get their health services from cost-effective systems that deliver higher-quality care at a lower price. Policymakers must change the tax treatment of job-based insurance, reform Medicare, and adjust health savings account rules to ensure consumers can reduce their costs by opting to get their care through efficient managed care arrangements. American health care is inefficient. Numerous studies have shown that a lot of health spending could be eliminated without harming consumers or reducing the quality of care (Lallemand 2012). A widely cited report from the Institute of Medicine (TOM) estimates that about 30 percent of health spending is wasted on unnecessary services (JOM 2012). Even with the recent slowdown in spending, health care costs continue to grow more quickly than the economy does (Keehan et al. 2017). That is unsustainable, consuming resources that individuals, families, communities, states, and the federal government could be spending on other priorities. The largest contributor to this inefficiency is poorly structured market incentives that reward more health services rather than better health outcomes. It is not that health care providers, insurers, and others in the health sector do not respond to financial incentives-they do, but current incentives do not promote a market focused on delivering to the consumer the highest-quality care at the lowest possible cost. With a heavily subsidized third-party payment system in which fee-for-service medicine dominates, the health sector is characterized by fragmented care, duplicative services, unnecessary mistakes, and uneven quality. Attempts to resolve those problems have led to excessive overhead, with reporting requirements and other regulatory burdens that drive up costs and increase the hassle for providers and consumers alike. As Republicans have struggled to replace key features of the Affordable Care Act (ACA), they have argued that their proposals would lower premiums (Schultz 2017). However, Republican legislative proposals have not addressed in a systematic and convincing way how they would establish the market discipline needed to accomplish that goal. Critics of the ACA would have a stronger case if they grounded their proposals in a larger vision for addressing the relentless pressure of rapidly rising

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