Republicans have now failed twice to repeal and replace ObamaCare. But their whole focus has been wrong. The debate centered, like ObamaCare, on the number of people with health insurance. A more direct path to broadening access would be to reduce the cost of care. This means creating market conditions long proven to bring down prices while improving quality—empowering consumers to seek value, increasing the supply of care, and stimulating competition.
First, equip consumers to consider prices. Critics always claim this is unrealistic: Are you supposed to shop around from the back of the ambulance? But emergency care represents only 6% of health expenditures. For privately insured adults under 65, almost 60% of spending is on elective outpatient care. Likewise, nearly 60% of Medicaid money goes to outpatient care. For the top 1% of spenders—a group responsible for more than a quarter of all health expenditures—a full 45% is outpatient. Giving consumers an incentive to consider price when seeking such care would make a huge difference.
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