Dr. Rudy

Rudy Giuliani’s health care reform agenda is showing a little more leg.

Evidently, the Republican presidential candidate is giving some speech somewhere today. All I know is that his campaign sent me an email with bullet points about how Hizzoner wants to use free markets to reform health care. Let’s see how he does!

Reforming the tax code. Rudy seems to endorse President Bush’s standard health insurance deduction, which would reduce government’s influence and make health care markets more free. He also talks about liberalizing the rules for health savings accounts (HSAs). But as I’ve argued elsewhere, were we to adopt a standard health insurance deduction, HSAs would be undesirable. Free-marketeers would want to eliminate them.

Government spending. Unfortunately, the email also speaks of “a Health Insurance Credit to low-income Americans,” which would increase government’s influence and make health care markets less free. Rudy speaks of block grants that are supposed to do many wondrous things. But he doesn’t tell us whether he would use existing federal spending (e.g., Medicaid and SCHIP) to create those block grants or simply create new categories of federal spending. Since he also talks about “[tying] Medicaid payments to a state’s success in promoting preventative care and tracking obesity for children,” one suspects he’s not talking about block-granting Medicaid.

Medical malpractice liability. Rudy says he wants “to end frivolous lawsuits without limiting compensation for real economic loss.” That’s the trick, isn’t it? He doesn’t say how he wants to do this. But any federal approach is going to be the wrong one. The Constitution doesn’t give the feds the power to alter states’ substantive tort rules. A free-market approach would let the states sort this out in the market for such rules.

Deregulation. Rudy says he’d make health insurance more affordable by letting people purchase lower-cost policies from other states – if your state’s regulations make health insurance unaffordable. I’m sorry, did the Supreme Court tell wine lovers that they can purchase vino from other states only if it’s unaffordable in their own state? Rudy says he wants to “bring greater accountability and efficiency” to the Food and Drug Administration’s drug approval process, but he doesn’t say how.

Buzzwords. Yes, this is an entire category of health policy. Rudy believes in “creating” price and quality transparency. He wants to “invest in health IT to reduce medical errors, improve efficiency, and detect health threats” – including, quite possibly, whether your kids are a bunch of fatties. Also, “health insurance must be redefined to cover wellness as well as sickness.” (The passive voice notwithstanding, I’m fairly certain who will do the redefining.) Those goals are all well and good. But buzzword-based health care reform usually means that someone thinks they can orchestrate the health care sector better than a free market could.

Given Rudy’s free-market rhetoric, I’m underwhelmed. Still, this package puts him head and shoulders above any other presidential candidate I’ve heard from.

His plan would be dramatically improved if he dropped everything after the first bullet point (re: the standard health insurance deduction). But the other bullet points furnish enough wiggle room that I can see Rudy improving on them. Or … backsliding.

Here’s one place he could look for possible improvements.