News Release

December 17, 2002

Media Contact: (202) 842-0200 ext. 800

Consumer Driven Health Care Would Improve Quality, Lower Costs
Industry expert presents needed improvements to the U.S. health care system

WASHINGTON -- The American health care system is in need of major reforms that would leave more health care spending decisions up to individual consumers rather than third-party insurers and government administrators, according to Tom Miller, director of health policy studies at the Cato Institute.

In "Improving Access to Health Care without Comprehensive Health Insurance Coverage: Incentives, Competition, Choice, and Priorities," a chapter in the new book Covering America: Remedies for the Uninsured, Volume 2 (Economic & Social Research Institute), Miller details the benefits of a market-based health care system.

Miller's plan includes:

• Tax credits available to all taxpayers who want to purchase high-deductible insurance coverage as an alternative to an employer-sponsored health plan
• Greater emphasis on expanding the safety net system instead of increasing subsidies to purchase comprehensive health insurance for the uninsured
• Greater flexibility in health insurance regulation, promoted through interstate regulatory competition that attracts insurers and their customers to market-based insurance options
• Tax incentives to encourage voluntary contributions to community-based nonprofit intermediaries that serve the uninsured

"By more effectively combining consumption of care with its purchase, we are more likely to arrive at the optimal mix of access, cost, and quality," Miller writes.

The complete text of Miller's chapter in the book is available online.