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American Focus > Blog > Health and Wellness > Central Planning vs. Centering On Patients
Health and Wellness

Central Planning vs. Centering On Patients

Last updated: November 6, 2024 8:25 am
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Central Planning vs. Centering On Patients
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The US Capitol stands tall in the early morning light, a symbol of American democracy and governance. However, recent major healthcare legislation has taken a different path, one that detaches consumers from their healthcare dollars and relies on central planning rather than market forces. The latest example of this approach is the Inflation Reduction Act (IRA).

The IRA introduced price controls for prescription drugs under Medicare, with the promise of saving taxpayers $160 billion over a decade. However, this move has had unintended consequences, impacting new drug development and leading to underestimations of the true cost of the reforms. The projected savings were used to fund green energy initiatives, but recent reports have shown that these savings were never realized.

One of the key changes brought about by the IRA was the implementation of lower caps on out-of-pocket spending and premium growth rates. While this was meant to benefit consumers, it has actually led to increased premiums and reduced choices for Medicare Part D plans. The Biden Administration has had to step in with multi-billion-dollar bailouts to cover the financial gaps created by the IRA.

Furthermore, the IRA has had a detrimental effect on Medicare Advantage plans, with regulatory constraints and increased compliance costs leading to access barriers for patients with chronic conditions. Average out-of-pocket caps have increased, popular supplemental benefits have been cut, and utilization management has become more stringent, making the program less patient-friendly.

The Affordable Care Act (ACA) is another example of failed central planning in healthcare. Premiums surged after its implementation, leading to massive taxpayer subsidies. The law’s perverse incentives and regulatory burdens have made healthcare unaffordable for many Americans, with prices and premiums rising and life expectancy decreasing.

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Central planning in healthcare is counterproductive because it hinders market dynamics and prevents insurers and providers from offering the care that patients truly need. Instead of relying on central planning, Congress should focus on empowering patients and innovators, allowing for competition and innovation to drive improvements in healthcare delivery.

In conclusion, it is time for a shift in healthcare policy towards patient-centered care. By addressing policy failures, empowering healthcare players to compete for patients, and prioritizing the needs of individuals, we can work towards restoring health and hope for all Americans.

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