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Surprising Science

American Health Care Costs

Ronald Reagan’s tax simplification measures in the 1980s are to blame for America’s high healthcare costs, says The Atlantic’s Megan McArdle. Especially the employer tax credit.

The problem is that Medicare can’t control costs too much better than private insurers or, as you see from the article above, doctors will simply abandon Medicare. In a world where there’s only Medicare and Medicare decides to control costs, doctors can either take the pay cut or stop being doctors. And as we see from other countries, lots of people want to be doctors, even if being a doctor doesn’t make you particularly wealthy. But in a world where Medicare is just one of many payers and Medicare decides to control costs, doctors can simply stop taking Medicare patients and a lot of legislators will lose their jobs.


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Our idea offers a solution for how the for-profit health insurance provider business model can be innovated on to not only allow for active participation and collaboration by policyholders in the creation of value, generate additional revenue and help finance the cost of health plans, but also provide for the realization of an improved, and invariably more productive alignment of interests and strategies across the entire healthcare value network.

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