Let’s Reform Healthcare: 6 ideas for cost-cutting without harming outcomes

I don’t think anyone disagrees about whether the US healthcare system is a mess. But, many disagree about why. Some people think it’s the patchwork of insurance companies robbing the American consumer blind. Others think that its the greed of pharmaceutical companies. The more economically-minded may see a bunch of principal-agent problems, and limited mechanisms for efficient pricing and provisioning of care, but struggle to understand where to begin when exploring the issue.

Here are a few things that I imagine could help cut costs:

1. Pricing Transparency. Most hospital systems have a charge-master system that doesn’t share what true prices of things are. This is bad, and generally seen as impermissible in other types of consumer relationships. When you are going to buy something, you should know how much it’s going to be. Even in cases of emergencies, this would put downward pressure on prices to compete. On the other hand, it would allow hospitals to more accurately price resource-intensive procedures. Instead of cross-subsidizing procedures by overcharging medical supplies, people could have a more accurate view of what doctor time is worth, and act accordingly.
2. Competition across state lines. Many medical licenses are not allowed to cross state lines. Neither are insurance policies. This results in labor being distributed in ways that are less efficient, because it’s expensive and time consuming to change municipalities. Similarly, the lack of open competition among insurers means that better insurers can’t use networks and market dominance to undercut price.
3. Uncapped residencies: If you receive a medical license, you still need to complete a residency to become board-certified, but residencies have been capped since 1997. This practice limits the amount of doctors that can be created a year.
4. Direct Admissions to Med-School: Going through undergraduate education before med-school leaves most future doctors deeply indebted. Instead, students should be able to directly go to receive their M.D. Many other countries do things this way without any major harms, and decreased costs.
5. RN Autonomy: Nurse practitioners should be able to open their own practices without the supervision of doctors. This would drive down prices because primary care doesn’t need the work of a specialist most of the time, and can save money.
6. Tiered Education: If you have most of the training to be a doctor, but you’re a P.A. instead, you should be able to upgrade your schooling over time without having to restart. Why can’t we have a community-medical college type program that allows people to continue to progress their skills. This would also augment the supply of doctors, all-things-being-equal, resulting in lower costs of care.