Market-based solutions to the primary care shortage

The Manhattan Institute’s Paul Howard has four market-based suggestions for fixing the primary care shortage:

[I]ncrease reimbursements. Primary-care physicians should anchor the nation’s commitment to disease prevention and management. But reduced payments make this task harder.

Second, expand primary care options for patients. Patients with sore throats and ear infections can be treated quickly, effectively and inexpensively by nurse practitioners in retail clinics, which have begun operating in increasing numbers around the country.

A third solution is to reform the tax code. Based on a Word War II-era IRS ruling, employer-provided health insurance is tax-deductible, while individually purchased health insurance generally isn’t. Reconciling the tax treatment between employer- and individually purchased health insurance would encourage more people to opt for high-deductible health plans coupled with health savings accounts (HSAs), where they could pay for more routine expenses out-of-pocket.

Lastly, limit malpractice litigation…the Massachusetts Medical Society (MMS)…estimates that defensive medicine costs the state a staggering $1.4 billion.

It’s not too late to create a vibrant marketplace for primary care, a division of health care everyone agrees we need. We can do it by paying more for primary-care excellence, expanding choice and competition at the level of basic health care and removing incentives in the system that lead to overspending and defensive medicine. The sooner we act, the sooner we can put primary-care doctors–and their patients–on the road to recovery.

I couldn’t agree more with points one and four.  As to point two, the evidence suggests that retail clinics work better on paper than in real life.  I think part of the reason is that disentangling quick and simple problems from more involved problems in real life patient encounters can be harder than it sounds.

As for point three, good luck selling the public on a system that “encourage[s] more people to opt for high-deductible health plans coupled with health savings accounts (HSAs), where they could pay for more routine expenses out-of-pocket.”  It makes sense, but few people have the background in basic economics to reason that way.  I wouldn’t expect too many people to jump on the let-me-pay-for-more-of-my-health-care-out-of-pocket bandwagon.

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