WASHINGTON -- In 1986, Ronald Reagan and Bill Bradley created a legislative miracle. They fashioned a tax reform that stripped loopholes, political favors, payoffs, patronage and other corruptions out of the tax system. With the resulting savings, they lowered tax rates across the board. Those reductions, combined with the elimination of the enormous inefficiencies and perverse incentives that go into tax sheltering, helped propel a 20-year economic boom.
In overhauling any segment of our economy, the 1986 tax reform should be the model. Yet today's ruling Democrats propose to fix our extremely high quality (but inefficient and therefore expensive) health care system with 1,000 pages of additional curlicued complexity -- employer mandates, individual mandates, insurance company mandates, allocation formulas, political payoffs and myriad other conjured regulations and interventions -- with the promise that this massive concoction will lower costs.
This is all quite mad. It creates a Rube Goldberg system that simply multiplies the current inefficiencies and arbitrariness, thus producing staggering deficits with less choice and lower-quality care. That's why the administration can't sell Obamacare.
The administration's defense is to accuse critics of being for the status quo. Nonsense. Candidate John McCain and a host of other Republicans since have offered alternatives. Let me offer mine: Strip away current inefficiencies before remaking one-sixth of the U.S. economy. The plan is so simple it doesn't even have the requisite three parts. Just two: radical tort reform and radically severing the link between health insurance and employment.
(1) Tort reform: As I wrote recently, our crazy system of casino malpractice suits results in massive and random settlements that raise everyone's insurance premiums and creates an epidemic of defensive medicine that does no medical good, yet costs a fortune.
An authoritative Massachusetts Medical Society study found that five out of six doctors admitted they order tests, procedures and referrals -- amounting to about 25 percent of the total -- solely as protection from lawsuits. Defensive medicine, estimates the libertarian/conservative Pacific Research Institute, wastes more than $200 billion a year. Just half that sum could provide a $5,000 health insurance grant -- $20,000 for a family of four -- to the uninsured poor (U.S. citizens ineligible for other government health assistance).
What to do? Abolish the entire medical-malpractice system. Create a new social pool from which people injured in medical errors or accidents can draw. The adjudication would be done by medical experts, not lay juries giving away lottery prizes at the behest of the liquid-tongued John Edwardses who pocket a third of the proceeds.
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