Staying Focused

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Through a coincidence of good timing, I am in San Francisco, where it is 65 degrees, clear, and absolutely beautiful while Washington is in a deep freeze. This was a long-planned trip, however, and the highlight was a meeting I had yesterday with Nobel-laureate Milton Friedman. Professor Friedman has long been interested in health policy and the importance of changes that will promote greater individual freedom.

I wrote to him and asked to meet to get his guidance on carrying
free-market ideas forward in what should be the best climate for
progress in well over a decade.


Professor Friedman invited me to meet in his spectacular condominium atop one of the tallest buildings on the highest hills in San Francisco. His view has to be one of the best on the planet, with a panoramic view that extends from the Bay Bridge to the Golden Gate. Magnificent! He reinforced his concern, detailed in an article he wrote in the Winter 2001 issue of The Public Interest, about government expenditures accounting for 45 percent of total health spending in the United States. “We are headed toward completely socialized medicine and are already halfway there, if in addition to direct costs, we include indirect tax subsidies.”

He insists it is important to stay focused on the big picture but admits that his policy prescriptions may not be politically feasible. He advocates repealing the tax exemption of employer-provided medical care; terminating the existing Medicare and Medicaid programs; deregulating most insurance; and restricting the role of government, preferably state and local rather than federal, to financing care for the hard cases.

He believes that realistic first steps should focus on liberalizing the
rules governing medical savings accounts, and allowing Medicare
beneficiaries to have access to the funds allocated on their behalf,
first to protect against catastrophic medical expenses, then to have
freedom in spending for routine care.

A strong advocate of MSAs, Professor Friedman was very interested to learn about the new Health Reimbursement Arrangements authorized by the IRS last summer to essentially give medium-sized and large companies the opportunity to offer MSA-like products to their employees. We discussed the need for either legislation or a new ruling that will allow employee ownership of the money they save in their HRA accounts.

Professor Friedman’s vision is as sweeping as the view from his balcony. Those of us who slog in the trenches of public policy details every day do well to be reminded of the goal: Individual control over health spending decisions in a free and competitive marketplace that responds to empowered consumers.

”’Grace-Marie Turner is founder and president of the Galen Institute in Alexandria, Va., which was started in 1995 to promote a more informed public debate over individual freedom, consumer choice, competition and diversity in the health sector. The Institute’s primary focus is sponsoring research and educational programs on the crucial intersection of health and tax policy. For more information, go to:”’ ”’To reach Grace Marie Turner, send email”’