The Strength of Ideas

Next week is Cover the Uninsured Week, with more than 1,000 events scheduled around the country to highlight the need for action. This year, several conferences in Washington hosted by the think tank community will give fresh perspectives on the problem and solutions.

First up will be the joint briefing on Capitol Hill hosted by the Galen Institute, the Council for Affordable Health Insurance, and the Center for Health Transformation. (See the events section below for details and registration information.) We will focus on “Targeted Solutions for the Uninsured,” and Merrill Matthews will lead off with an analysis of the diversity of the uninsured population and the difficulty of finding single or simple solutions.

A host of other speakers will explain that there are ways to help the uninsured that don’t involve the creation or major expansion of costly government programs. These solutions rely on identifying the reasons why people lack coverage and targeting solutions that provide choice, affordability, and flexibility in a competitive marketplace.

My colleague Greg Scandlen will analyze new options in consumer-directed care, and others will describe the safety net in the free-market health sector.

We hope the audience will then adjourn to the Cato Institute for a luncheon briefing. Treasury official Roy Ramthun, a leader in Health Savings Accounts policy development, will answer the question, “Can Health Savings Accounts Cover the Uninsured?” Bob Helms of the American Enterprise Institute will join Cato’s Michael Cannon on the panel.

And then on Wednesday, AEI will host its own briefing, “How Not to Cover the Uninsured,” featuring two of the speakers at the Tax Reform Commission’s recent hearing in New Orleans. Wharton Professor Mark Pauly and Gene Steuerle of the Urban Institute will explain the roots of the problems in our health sector, starting with the distortions created by the tax treatment of employment-based health insurance. Expect fireworks.

Mark and Gene will be joined by Jon Gabel of the Health Research & Educational Trust and Len Nichols, newly of the New America Foundation.

It will be well worth your time, if you can make it to Washington, to see the power of the ideas and strength of commitment in the free-market health policy community to sensible solutions for the uninsured.


Free-market thinking also is alive and well at a few universities at least, and it is refreshing to see. My speaking trips (which took me to New Jersey, New York, Chicago, Orlando, and Phoenix over the last few weeks) most recently took me to Furman University in Greenville, South Carolina, and Baylor University in Waco, Texas. (In Waco, BTW, there is a miniature version of the Brooklyn Bridge, by the same architect who designed the famous New York City bridge; the local museum has pictures from the 19th century of cattle drives crossing the Waco bridge over the Brazos river.)

Students and professors alike are interested in new ideas to address the health policy problems facing the U.S., with Baylor Economics Professors Earl Grinols and Jim Henderson taking the lead in developing their own reform proposal. I’m always encouraged when economists tackle health care since they grasp the importance of fundamental economic principles, which are so out of whack in our health care system. (To that point, don’t miss David Gratzer’s important article in the (sadly) final issue of The Public Interest, highlighted below.)

The strength of good ideas is catching hold.

Grace-Marie Turner


  • What ails health care
  • Number of uninsured may be overstated, studies suggest
  • Characteristics of the uninsured: A view from the states
  • Three strikes and more for drug importation
  • A lethal guardian: The Canadian government’s ban on prescription drugs

Author: David Gratzer, M.D.
Source: The Public Interest, Spring 2005

Dr. David Gratzer of the Manhattan Institute offers an important historical perspective on health policy over the last decade and concludes, “at the end of the day, we seem no further ahead than when Americans elected Governor Bill Clinton to the White House with a promise of health-care reform.” The reason: economic incentives haven’t changed. “Reform, thus, has largely been an exercise in shifting costs from payer to patient, from insurance plan to hospital, from hospital to physician, from uninsured to insured.” He discusses the linkage between tax and health policy and how it distorts price visibility, and he quotes a Maryland state official as saying: “Using health care in this country is like shopping with someone else’s credit card.” Gratzer concludes: “If we really want to address the [health care] system’s shortcomings – to tame health inflation and broaden coverage – a new approach is needed?We must recognize that the structure of American health care is flawed, and we must seek to address this by giving people more control over their own health care.”
Full text (pdf):

Author: Ricardo Alonso-Zaldivar
Source: The Los Angeles Times, 04/26/05

The number of uninsured Americans could be overstated by up to 20%, according to a new government-funded study by the Actuarial Research Corporation. “That could mean 9 million fewer uninsured, reducing the total to 36 million from the 45 million reported for 2003, the latest year for which data are available,” reports Ricardo Alonso-Zaldivar in the Los Angeles Times. This data is the latest from four recent studies by the government to estimate the number of uninsured. “The results range from a high of 45 million in the Current Population Survey to a low of 19 million,” the Times reports. But the problem and the issue aren’t going away: “[T]here would be a lot less interest in dealing with the uninsured if it turned out there weren’t so many,” said Joseph Antos of the American Enterprise Institute.
Full text:

Author: State Health Access Data Assistance Center
Source: Robert Wood Johnson Foundation, May 2005

The Robert Wood Johnson Foundation has released a report that examines data on the uninsured from the Centers for Disease Control and Prevention and finds that more than 20 million working adults lack health care coverage. According to the report, Texas has the highest number of uninsured working adults with 26.6%, followed by Louisiana (22.6%), and New Mexico (22.6%). Minnesota has the lowest with 6.9%. The report also finds that racial disparities in health care coverage rates vary across states, and the uninsured are less likely than the insured to have a personal doctor or provider.
Full text:

For another perspective on the study and the impact of illegal immigration, see this editorial by Investor’s Business Daily:

Author: Diane Carol Bast
Source: Health Care News, 05/01/05

I-Save-Rx, Illinois Governor Rod Blagojevich’s prescription drug program, is a public relations nightmare which has faced several setbacks since its October 2004 launch, reports Diane Carol Bast, executive editor of the Heartland Institute’s Health Care News. The program allows importation of prescription drugs from foreign countries, and about 27 million people in five states are eligible to join. However, only 5,300 orders have been processed as of late March.

Additionally, the program has faced a series of public relations failures. For example, a local United Food and Commercial Workers (UFCW) union “emphatically rejected I-Save-Rx,” contradicting Blagojevich’s earlier statement “that the UFCW promised to promote his program.” In a written statement, Local 881 President Ronald Powell said, “Foreign drug importation will not only cost Illinois consumers convenience at their local retail pharmacy, it will cost thousands of retail pharmacy jobs? We will not, nor have we ever, agreed to participate in Gov. Blagojevich’s statewide partnership to enroll new participants in the I-Save-Rx program.”
Full text:

Author: John R. Graham
Source: The Fraser Institute, 04/05

The Canadian government’s policy of automatically banning new medicines could result in the deaths of hundreds of Canadians every year “while more continue to suffer needlessly because the government prevents them from taking the medicines they need,” writes John R. Graham, formerly an adjunct scholar at The Fraser Institute (and now with the Pacific Research Institute in San Francisco). When any new drug is invented and ready for distribution in Canada, the Canadian government responds by enforcing an automatic ban on its use which is lifted only after lengthy safety and efficacy studies. The time it takes Health Canada to remove the ban on new drugs has increased by 50% over five years, from just over 16 months in 1997 to an average two years in 2002, Graham writes. “Parliament should amend the Food and Drug Act to allow Canadians to use new medicines once a regulator in a comparable jurisdiction, such as the United States, European Union, or Australia, has removed its prohibition,” Graham concludes.
Full text:


Targeted Solutions for the Uninsured
Sponsored by the Galen Institute, the Council for Affordable Health Insurance, and the Center for Health Transformation
Tuesday, May 3, 2005, 9:30 a.m. – 11:30 a.m.
Washington, DC

For additional details and registration information, go to

HSAs: Empowering Texans, Controlling Costs – A Policy Primer
Texas Public Policy Foundation Event
Tuesday, May 3, 2005, 11:45 a.m. to 1:00 p.m.
Austin, TX
For additional details and registration information, go to:

Can Health Savings Accounts Cover the Uninsured?
Cato Institute Policy Forum
Tuesday, May 3, 2005, 12:00 PM (Luncheon to follow)
Washington, DC
For additional details and registration information, go to:

How Not to Cover the Uninsured
American Enterprise Institute Health Policy Discussion
Wednesday, May 4, 2005, 2:30-4:30 p.m.
Washington, DC

For additional details and registration information, go to:

Health Courts: Exploring the Concept
AEI-Brookings Joint Center Event
Thursday, May 5th, 2005, 8:30 a.m. – Noon
Washington, DC

For additional details and registration information, go to:

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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