Health Care Reform Plans Criticized by Economist Dr. Arthur Laffer

Strategic Insights -

Economist Dr. Arthur Laffer has released a study warning that health care reform plans currently pending in the U.S. Congress would have a detrimental impact on the country. According to Dr. Laffer, implementing legislation that provides an additional $1 trillion in federal health care spending would lead to increased health care costs, medical price inflation, and a slowing national economy, while still leaving 30 million Americans uninsured.

Key Takeaways:

  • Dr. Laffer's study, "The Prognosis for National Health Insurance," argues that current health care reform plans would increase health care costs and medical price inflation, despite increasing federal health care spending by $1 trillion.
  • The study suggests that reforms need to focus on reducing costs by closing the "health care wedge," a separation of effort and reward that drives patients to be more efficient in their spending.
  • According to the study, health care costs have risen over the past 50 years, while the patient's out-of-pocket contribution has plummeted from 50% to 10%.
  • Dr. Laffer advocates for patient-centered reform that diminishes the health care wedge, rather than increasing it.
  • The study estimates that the proposed reforms would only reduce the number of uninsured Americans by roughly one-third.

Statistics:

  • $1 trillion: estimated increase in federal health care spending under current reform plans
  • 30 million: estimated number of Americans still left uninsured under current reform plans
  • 50%: percentage of medical expenditures paid by patients in 1950
  • 10%: percentage of medical expenditures paid by patients in 2009
  • $1 trillion: estimated increase in federal health care spending under current reform plans
  • 70%: percentage of Americans happy with their current health care arrangements

Sources:

  • Dr. Arthur Laffer (see also Texas Public Policy Foundation)
  • Texas Public Policy Foundation (www.LafferHealthCareReport.org)
  • Managed Care Weekly Digest editors (Copyright 2009, Managed Care Weekly Digest via NewsRx.com)