Providence Journal (RI), February 22, 2008

THE CAMPAIGN TRAIL is awash with promises to make universal health care a reality in the next presidential term. Candidates from both parties claim they can lower costs — and insure everyone — through legislative mandates and increased government intervention in the health-care market.

But they’re wrong. Only with a freer market can we improve America’s health-care system.

For evidence, just look at Lasik corrective eye surgery. Because most insurance providers (including government programs like Medicaid) won’t cover the procedure, the market operates as it does for nearly everything else — through advertising, competition and consumer satisfaction.

In the past decade, over 3 million Lasik procedures have been performed.

During that time, the average price of Lasik eye surgery has dropped nearly 40 percent, from $2,200 per eye to $1,350.

Unfortunately, Lasik is a rare exception to the general rule. In most of health care, the government is far too heavily involved. In fact, the government now pays over 60 cents of every dollar spent on health care.

The key to lowering costs is to expand the Lasik model. That means encouraging competition by decreasing government’s role in the health-care marketplace.

Lawmakers could start by letting Americans buy insurance plans from out-of-state providers. Right now, insurance is regulated on a state-by-state basis. And most states force residents to buy one-size-fits-all insurance packages that include all sorts of services that only a small slice of the population needs, like chiropractics and in-vitro fertilization.

These extraneous “mandates” increase the price of basic insurance by as much as 50 percent.

If people could simply buy plans from anywhere in the country, states and private insurers would be forced to compete. This would result in lower premiums and a reduction in overall health-care costs. It would also let people buy insurance policies custom-tailored to their individual needs.

Politicians could also drive down prices by loosening restrictions on prescription drugs.

Prescription-drug spending accounts for just 11 percent of total health-care spending. But it plays a huge role in holding down overall medical costs.

By keeping us out of the hospital, prescription drugs save our health-care system a fortune. After all, a daily dose of Lipitor is far cheaper than heart surgery. Medicare saves over $2 for every $1 increase in prescription-drug spending, according to the National Bureau for Economic Research.

On average today, it takes nearly a billion dollars to bring a new drug to market. Much of that expense is a result of excessive government regulations and would be much better spent on developing new cures. Our elected representatives should strive to reduce those regulations and make it less expensive to bring life-saving cures to people dying of AIDS, heart disease and cancer.

For more-common health issues, our leaders should work to increase over-the-counter availability of drugs that have been proven to be safe and effective. This would dramatically lower costs for ordinary consumers.

Consider birth control. Is it really necessary for a woman who has been taking the same pill for 15 years to visit her ob-gyn every year to get a refill?

Or look at Mevacor. This popular cholesterol drug has been sold safely over-the-counter for years in Europe, but it still requires a prescription in the United States. That might be a good deal for the doctors who are paid to write prescriptions, but it’s incredibly expensive for the patients.

Doctors who think they can profit from an overly regulated system are kidding themselves. In the United States, the average annual income for a doctor is more than $200,000. In Europe, many doctors make less than $60,000 a year because the government, not the market, sets their salaries. In other words, Europe’s so-called “universal care” has led to a 70-percent pay cut for doctors.

In short, our politicians should work to improve the health of patients, not special-interest groups. That starts with acknowledging a simple fact:

What the American health-care system needs most is more freedom, not less.

Candidates who can’t see that clearly should go get Lasik.

Sally C. Pipes is the president and chief executive of the Pacific Research Institute and author of Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer.