Sen. Cornyn: Competition can cut the costs of health care

Sen. John Cornyn, a member of the Senate Finance Committee, published the following op-ed in the Austin American-Statesman, outlining the way forward to reform America's health care system and make health care more affordable for Texans. The op-ed can also be accessed here.

Cornyn: Competition can cut the costs of health care

Congress recently began consideration of various proposals to reform health care - and our biggest challenge is to help make it more affordable. Health care costs have risen far faster than inflation in both good economic times and bad. Health care costs force many self-employed workers into the ranks of the uninsured. Americans now spend twice as much per capita on health care than do Canadians, Britons, and our other friends across the developed world.

Paying twice as much for something is fine if you are getting twice as good a product, yet too many of our health care dollars are not buying higher quality care. A recent study found that high spending on health care does not guarantee high quality, and that some of the nation's best medical outcomes are delivered by low-cost providers. On the other end of the spectrum, too much routine care is being administered by high-cost emergency rooms. As the Statesman reported a few weeks ago, a single patient in Central Texas spent more than 140 days in the ER last year, and more than 500 days over five years. Our trauma centers will never be the most appropriate facilities to treat folks with chronic medical conditions.

President Barack Obama and Congressional Democrats have pledged health care reforms that will lower costs, but so far higher costs will hit the taxpayer in the near future. The budget Congress passed last week envisions more than $600 billion for health care reform, and that's just the "down payment." More taxes or borrowing seem certain, while the cost savings are pushed to the vague and distant future.

There are two competing visions for making health care more affordable. One vision is to delay or deny treatment to patients who need care. In many nations, socialized medicine saves money by overruling the decisions of doctors and patients, or by placing patients on waiting lists for months or years. The same thing could happen here in America through "comparative effectiveness" policies that allow government, not physicians, to decide which treatments work best.

I believe there's a better a vision to make health care more affordable. First, we can get a handle on federal health care fraud. Taxpayers pay up to $90 billion a year in fraudulent and wasteful medical bills, about two-thirds of that in the Medicare program alone. As long as fraud remains such a serious problem in Washington, growing government will never be the solution to higher health care costs.

Second, we can lower costs through lawsuit reform. Every victim of medical malpractice should have access to our courts, but our laws must ensure that patients receive reasonable compensation without enriching their lawyers. Texas can be proud of our record in this area, as lawsuit reform has reduced insurance premiums for providers, while still protecting true victims of medical negligence.

Third, we can get better value for our health care dollars by creating more choices for patients through the free market. The free market is the best system ever devised for spurring innovation and delivering the services consumers want at the most competitive prices possible. Government's role should be to make the system work for patients, by encouraging more providers to enter the market, and by ensuring that they are motivated by consumer preferences rather than by government reimbursement rates.

The good news is that both government and the private sector have demonstrated that this approach can lower costs. Medicare Part D, which provides prescription drug benefits for seniors, is one of the few federal programs to spend less than anticipated. Unlike traditional Medicare, this program offers options for seniors entirely through private plans, and fosters competition for their business. As a result, program costs have gone down 37 percent, and more than 80 percent of seniors are satisfied with the program.

The private sector has also helped empower patients as consumers, including right here in Austin. Whole Foods has combined high-deductible health plans with a personal wellness account that each employee can control. Whole Foods reports that in one year, participating employees had fewer medical claims, prescription drug claims, and hospital admissions. The company's costs went down even as participating employees reported high satisfaction with the quality of their care.

In Washington, it often seems that there's no constituency for lower costs, as every interest group tries to get the most they can from taxpayers. But in Texas, I understand that affordability is the biggest issue for employers and employees alike. More government spending won't make health care more affordable. To truly lower costs, health care reform must create market incentives for providers to deliver the highest quality services at the most competitive prices possible.