The government is beginning again on its long and to date ill-fated trek into the world of healthcare. We have all heard the cries about rising costs, the aging population and millions of uninsured. The task is daunting and I like the consensus building that President Obama is beginning prior to crafting an ultimate strategy.
Competition has a bad name these days, but it is what drives efficiencies and costs reductions more aggressively than any other factor. Right now, State by State regulation of health insurers prevents open competition in many parts of our country.
These regulations require separate corporate entities in each state, differing reuired coverages, and layers of fees, costs, rules and regulations. Each State adds layers of costs to every insurer. Most important, however, State regulations help prevent smaller players with innovative ideas from getting started. The State-by-State regulatory gauntlet is too great a barrier to entry into the markets.
Unlike the past, nearly all companies are multi-state. Most, even the smallest producers and service providers, are national or international in scope. State control is no longer relevant.
If we want to really make headway in crafting a strategy, we should take baby steps.
Step One should be to nationalize regulation of the health insurance industry, pre-empting the separate regulations of the States. This would open competition, reduce costs and expand options for everyone.
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