The health-care bill and Dodd-Frank are indescribably complex…and it doesn't need to be this way, says Steve Forbes, who outlines a few simple, decisive steps officials can take now.
What kind of specific reforms could we see in…health care, for example? You’ve actually laid out some interesting ideas.
Well the key thing in health care is to get real free markets.
What we have is a crazy hybrid system today, where we have pieces of it that are free market—which is why we still produce more new drugs and more new medical devices than the rest of the world put together. But a lot of it is infected with a system where you have a disconnect between providers and consumers.
You know, in any other part of the economy, people want more of something and entrepreneurs come forward and fill the need—and do so in better and better ways. It has not been this way in health care because of the crazy way we finance it, which is third party. So, you get a disconnect, and so we’ve got to change that.
There are several positive things we can do at the start:
- Have nationwide shopping for health insurance, get real competition, with hundreds of companies competing for your business. That will induce not only productivity and better pricing among the insurers, but also create market pressures to do better things in terms of delivery of health care, more and more efficient ways to do it, positive ways to do it.
- And at the same time, tort reform. I mean it’s high time for it, so we don’t spend tens of billions, hundreds of billions of dollars on crazy, defensive medicine.
- Equalize tax treatment. If you’re an individual—unless you are self-employed—you buy insurance with after-tax dollars. Guess what? That already puts you at a 50% disadvantage vis-a-vis the business.
- How about removing barriers to health savings accounts?
- They still have rules about what you can have for deductibles and all that kind of thing. Open it up and make it easier for people to pull together, small businesses to pull together.
You start doing some of these reforms and you will see other reforms, like digitization of records, but it won’t be by government dictate. It will be companies coming in and showing physicians and others there is a great way to do it…and not only does it reduce errors, but it also makes you more efficient to spend more time on the hard cases.
What about in the regulatory area? Where can we cut regulation to improve the economy?
Well I think, how about starting with repealing ObamaCare? I mean, that is already spawning thousands of new rules driving out individual practitioners—not because the practitioners voluntarily want to do it…they are just getting crushed by regulation.
That way we can avoid the—well I hate to use the word, but that’s what they are—"death panels" with Medicare, 15 members appointed by the president.
These 15 members can make decisions on Medicare that are immune to Congressional oversight. You need a 60% vote in the Senate to change their rulings, which is going to be very difficult to do in terms of criteria for care—which will all be emphasized on trying to ration care to save money, and not get the kind of lifesaving productivity we need.
On the financial side, Dodd-Frank is already producing thousands of pages of new rules and regulations. The last count I heard on the regulations coming out of Dodd-Frank: 3 million words. It's soon going to rival the tax code.
I was talking to a banker the other day, a small banker. He has had to hire five people in a small bank just for compliance. What does that do to the ability to lend and the focus on getting your customer base to grow?
Specifically, what can we do in financial regulation? You’ve always said we do need speed limits and rules of the road.
You do need rules of the road…but sensible capital requirements and enforcing those, updating rules on new financial instruments to make sure you have capital requirements there if need be, and having clearing houses if they're big enough. Just basic stuff like that.
But you don’t need millions of words to do it. It can be done pretty simply.
Is that the problem then? Is it all regulations looking for a problem and…
Well you touch on the so-called "consumer protection agency." An automatic budget, no effective oversight—I mean, where does it come in the Constitution that you’ve got to have hundreds of millions of dollars a year in money and no accountability to Congress? Where did that come from?
What do you see that’s positive coming out of Washington today?
Well, let’s see. You can’t say it’s the baseball team. They still haven’t hit their stride yet.
From the last election, there seems to be…
Well they’ve got a little bit of spending cuts in terms of this fiscal year, and they prevented a massive increase that the administration tried to ram through in December. So they’ve slowed the train a little bit, but the train is still going much too fast.
But you do sound disappointed despite the leadership.
I am disappointed that the leadership of Congress, the republican leadership in the House and in the Senate. They just want to run the clock to 2012 thinking they’ll win by default.
You’re not going to win by default. You have to have a positive message. Hello guys—we should have learned that from Ronald Reagan.