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Health Care Common Sense from Professor Robert Frank

Updated on May 5, 2008

Health Care Issues

Robert H. Frank an economist at the Cornell Business School, in the article linked below, pokes holes in President Bush's recent health care proposal and points the way toward a more rational approach.

He points out, market incentives induce private insurere to spend vast sums to avoid people who may actually require health care.

Because Bush's proposal would steer people toward individual policies, it would strengthen the incentive for insurers to shun unhealthy people.

Far more troubling is that Bush's proposal embraces a system under which we spend more than twice as much on health care, on average, as the 21 countries in which life expectancy exceeds ours.

Our reliance on private insurance multiplies administrative expenses, currently about 31 percent of total outlays.

Annual health spending in the U.S. currently exceeds $2 trillion. A single-payer system that did nothing more than reduce administrative expenses would save roughly $300 billion annually.


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