America’s health care and education systems have failed the American people. Health care costs only go up, always at a faster rate than inflation. Outcomes across a variety of measures – prevalence of chronic disease, life expectancy, doctor and patient satisfaction, physical and mental fitness – are deteriorating. No one is happy and no one thinks that the American people’s health status is getting better.

The same is true for education. The United States spends more per pupil on education by far than any other country yet American children chronically rank near the bottom of international rankings in terms of knowledge and reasoning proficiency.

Why?

Health care and education share three inter-related characteristics: lack of application of the latest and best technology, grotesque over-regulation, and capture of pertinent government policy by the soft totalitarians of the neo-Marxist left. Leftists, who dominate the universities, the legacy media, the entertainment business, the foundations, and most government bureaucracies, apparently feel that by virtue of their presumed intellectual and moral superiority, they should be entitled to dictate to the rest of us what we should think, how we should think , and what we must or must not say or do. They themselves, however, do not evince any obligation to be held accountable for chronic failure. Regulation, controlled by utopian power-seekers, inhibits technological innovation, our best hope for radical improvement in the ability of our health and education systems to deliver world class results at declining cost. No progress will occur until technology can be freely and thoroughly applied, and these sectors are freed of the shackles imposed by authoritarian ideologues.

The problem is not that we don’t know what to do. The problem is that we lack the political will to dethrone entrenched interests whose power, wealth, and prestige are threatened by doable, necessary changes.

What is to be done? The first step is to answer two questions:

1. Who gets to control the money?
2. What are the incentives?

Right now, government bureaucracies and powerful suppliers control the flow of resources in health care and education (think teachers’ unions and huge health care companies spending hundreds of millions on lobbying) . Just like any human organization with too much power, largely unchecked by countervailing forces, their primary focus is to please themselves; the interests of the customer are secondary, even a nuisance. No wonder performance has been so abysmal.

For reforms to be effective and enduring, they must be built on principles designed to transfer power away from centralized bureaucracies back to the people:

1. Just as for any product or service available on a free market, individual consumers and/or their families, should control the money.
2. Buyers need incentives to get the best value as they define it per dollar spent and sellers need an incentive to supply the best value. In short, the foundational policy issue is how to make the health care and education sectors perform like well-functioning free markets that maximize choice and value.

What follows is a bare bones description of specific measures that would have the desired effects:

Health care

• Require that all citizens have health insurance.
• Eliminate the exclusion from taxation of employer-paid health insurance. This is a relic of a World War II effort to offset the impact of wage controls; its effect is to insulate patients from having to consider the cost of health insurance as well as its benefits.
• Eliminate government sponsored health care payment systems, i.e., Medicare and Medicaid.
• Create what in essence is a voucher system for health insurance with graduated taxpayer support for low income people. So long as the income tax is in effect, an individual or family would be able to claim an income-related tax credit applicable against a qualified health plan. Low income people not paying taxes would receive a voucher for a fixed dollar amount usable only for the purchase of health insurance. If the US government were to get rid of the income tax and adopt some sort of national sales tax, the tax credit would go away, but health insurance payment support for the poor should remain.
• Limit the scope of government regulation to providing protection against misrepresentation and fraud.

Well-reasoned technical details are described in the link below to a paper by Mark Pauly and John Hoff.

https://www.aei.org/research-products/book/responsible-tax-credits-for-health-insurance/

Were the choice and payment for health insurance decentralized down to the individual and family unit; were they motivated to seek out the best value for their money by having a fixed tax credit or payment voucher; and were providers left free to compete and innovate, Americans would be giving themselves the best possible chance for better health care, based on their preferences.

As Thomas Sowell reminds us, “There are no solutions, only tradeoffs”, so we must examine the drawbacks to a health insurance payment system that devolves decision making power and responsibility to the lowest possible level:

• People are too stupid to make wise decisions regarding such a complex subject as their own health care. I was involved in health policy in the 1980’s and frequently heard this objection among Ph.D. health economists. They are partially, right, but only partially. Some people will make dumb decisions and the leftist legacy media will take great delight in showcasing what happens when decisions are not left to the experts. They miss the main point. The right question is on balance for the great mass of people, what will work better? The system we have now, designed and controlled by experts, is an abomination. Markets work better than dirigisme. No policy can be perfect; the best we can hope for is one that works better than alternatives for most people most of the time.
• The proposed changes are radical and disruptive. Yes they are, but continuation of the status quo guarantees financial and eventually human disaster. The combination of innovation-strangling regulation and lack of cost consciousness by patients and providers alike inevitably leads to brutal, arbitrary rationing of health care by remote bureaucrats. In a centralized, bureaucratically controlled system, the wealthy and well-connected do just fine, but the rest of us get worse care – if it is available at all. The relevant basis for comparison is not an unsustainable status quo but what happens if America does not implement some sort of market-based health insurance reform.

It may be naïve to think effective reform can happen. Nonetheless, one must hope and try. Never give in.

Education

The same design principles apply to education as to health care. Shift control over the money from bureaucrats and activists to parents. Create incentives for parents and students to seek out and differentially reward the best performers at teaching what students must learn.

The two biggest impediments to providing American children with a first rate education are the Department of Education and the repulsive teachers’ unions. The former should be eliminated and the latter banned. While siphoning off hundreds of billions of dollars from taxpayers, they have presided over a collapse in educational attainment and have replaced education with indoctrination in a sick, delusional ideology deeply destructive of the country, e.g., America is inherently racist; raising consciousness of one’s victim status should be emphasized over achievement and merit; a child can be any sex he or she wants; “experts” know better than parents how children should be taught and raised, etc. A prerequisite for improvement is widespread public recognition that the bureaucrats and unions have betrayed the nation’s children and must be utterly discredited and stripped of their power.

Children and the country would get the most educational bang for the buck with the implementation of a voucher system where parents (guardians) would receive a voucher for each child applicable against the cost of tuition at an educational institution of their choice. Every child , regardless of circumstances, would have the opportunity to get a good education, tailored to specific aptitudes, needs, and interests. Adoption of a voucher system would encourage innovation, specialization in serving particular needs, competition, and teacher rewards based on performance.

There would be a huge temptation to festoon a program that in essence gives money to parents for their child’s education with all sorts of regulations as to what should be taught, who should be allowed to teach, how it should be taught, etc. This would be a huge mistake. All a voucher does is to make everyone with a child rich in terms of ability to pay for the child’s education. Rich people – almost all of them — do not need to be told where and how to spend their money especially if their vital interests are concerned, and for almost everyone, a child is a vital interest. Aside from aggressive enforcement of laws against fraud and theft and the establishment of testing standards to demonstrate proficiency and knowledge, government regulation should be kept to a bare minimum. We the people can and must be trusted.

Undoubtedly there will be lot of mistakes. But, as markets for education evolve, the benefits to the public in terms of educational excellence, choice, and innovation will vastly exceed the costs. In particular, the opportunities to apply technology to lower the cost and improve the quality of education are breathtaking. They will not, however, be realized without the freedom to experiment.

While vouchers are the best policy instrument for improving educational performance, almost any measure, e.g., charter schools, that transfers power and money from a centralized system run by bureaucrats and left-wing ideologues to the people would be a step in the right direction. At the very least the federal government ‘s involvement in education should be eliminated with authority over educational system design and content devolved to the states.