Another solution to the problem would be to make health care function more like a market. An approach favored by Budget Director, Darman, would overhaul the current system, under which 70 percent of Americans below 65 get health coverage as a tax-free benefit. Instead, most consumers would receive fixed tax credits from the government based on income, using their proceeds to buy health insurance through companies or on their own. Forced to make decisions about spending their own tax dollars, shoppers might think a little, settling for a good value from the Wal-mart health care instead of buying from Tiffany. There are clearly limits to how well these charges would work.
Consumers are ignorant of medicine and can be influenced by doctors and hospitals.
On the other hand, regulators lack perfection in setting prices and shrewd providers can find their way around. The problem with health care is that there are no foolproof ways to rationalize the use of resources or control costs. In health care, there are plenty of precious commodities, ranging from public education to careful testing of new medical technologies. Our responsibility is to make certain that every American understands his own personal role in solving this crisis. We have direct evidence that promoting good self-care can be cost effective.