Book Review: “The Cure: How Capitalism Can Save American Health Care,” By David Gratzer, 325 pages, $25.95

IF you find yourself in a room with 10 people this holiday season, eight of them will think the United States health-care system is riddled with problems, according to a recent survey in Health Affairs. If you're lucky enough to be at a party with physician, author and policy analyst David Gratzer, you can be certain that he's among the eight.

But a little perspective on health care is in order, perspective that Gratzer's "The Cure" thankfully provides.

Today, 93 percent of Americans, according to Gratzer, have health insurance or can afford to purchase it. And as he points out, the other 7 percent receive plenty of care, as being uninsured is not the same as going without health care.

There is also a serious paradox at the center of U.S. health care. Although the vast majority of us tell pollsters we want a different system, popular opposition kills any prospect for major changes when people discover they will lose their current insurance coverage.

People complain about the expense, but the reality is that Americans spend very little out of pocket for health care. The reason that's it's so expensive is because it's nearly free.

Although we call it insurance, what most of us have is employer-supplied prepaid medicine. This, as Gratzer notes, is a relic of government wage and price controls during World War II, and the IRS's blessing of medical insurance as non-taxed compensation. Insurance, after all, pays for things that are unlikely to occur, but have serious financial consequences when they do. Think auto, home, liability, life, disability and long-term care insurance.

Consider the consequences of acquiring other necessities of life the way we do health care. Would we want our employer providing our housing, clothes, transportation and food? The results would be familiar, a frustrating and expensive mess that, nonetheless, few would want to abandon.

Yet abandoning employer-provided insurance is exactly the cure that Gratzer prescribes. Citing the late Nobel laureate economist Milton Friedman, he calls for jettisoning the employer tax break and moving to individual insurance. (If politically impractical, which this is, then allowing all individuals to deduct health-care premiums is a second-best step.) This move would cause most people to logically conclude that it makes sense to purchase health insurance like they do other insurance, with significant deductibles.

To ensure competition, insurance companies should be allowed to market and sell plans in any state, thereby allowing someone in New York, for example, to purchase a plan from another state and thus save significant money on premiums.

Gratzer recommends diffusing the fiscal time bomb of Medicare by moving to a partially prefunded, competitive system based on health-savings accounts and the successful model of the Federal Employees Health Benefits Program. This system controls costs while improving quality by having private plans compete for a captive customer base.

When it comes to the pharmacy, he doesn't scapegoat one of the United States' most innovative industries. Instead, he calls for the Food and Drug Administration to return to its original mission of declaring drugs safe, rather than wasting millions of dollars and months of delay to determine whether they are efficient. That, reasons Gratzer, can be determined by consumers.

Gratzer prescribes the right medicine. Anyone interested in understanding the current state of U.S. health care - or taking an active role in the emerging health-care debate - ought to head to Amazon and acquire the Gratzer two pack - "The Cure" and his earlier work "Code Blue." Then they'll be well equipped to understand and add to the emerging debate.