LAWRENCE — Author and economist John Goodman is scheduled to talk about his ideas for reforming the U.S. health care system at an appearance next week at the University of Kansas Dole Institute of Politics.

Goodman sometimes is called "the father of health savings accounts," and has a new book: "Priceless: Curing the Healthcare Crisis." He co-wrote the 1992 book "Patient Power: Solving America's Healthcare Crisis."

He also developed the Health Care Contract with America, a five-point plan for reforming health care, which has been cited by the Congressional Health Care Caucus, a study group for Republican congresspersons and members of their staffs.

Health stamps

In his new book, among other things, Goodman calls for abolishing Medicaid and moving the program's beneficiaries into private insurance plans. Medicaid enrollees, under his plan, would instead get a $2,000 per person tax credit or refund that they could apply toward the purchase of private health insurance.

He also recommends replacing much of Medicaid outpatient spending for those who are not elderly or disabled with a "health stamp" system modeled on the food stamp program. Beneficiaries would be given the stamps and allowed to spend them as they saw fit for medical care. He also favors abolishing the Children's Health Insurance Program.

The main point of his book is that the current health system has neutered the function of pricing in the health care market, thereby driving up costs. Consumers, he argues, don't pay the real costs of medicine and largely are unaware of them. Providers aren't reimbursed for their true costs but instead take whatever the insurance companies and government are willing to pay.

'Perverse incentives'

"So, the overall conclusion of the book is that when we take prices out of the system we create perverse incentives," which have led to higher costs and inefficiencies, Goodman said in an interview with KHI News Service.

Most, if not all of his recommendations, are aimed at making the health care market more like the markets for other goods and services. Goodman, a champion of so-called "free market" solutions, is a critic of the Affordable Care Act and his ideas have been welcomed mostly in conservative policy circles.

"People often wonder — can markets work in heatlh care," Goodman said, offering the example of the MinuteClinics located in many CSV pharmacies. "They are working and people are turning to real markets more and more for problems that aren't being solved any other way."

The MinuteClinics specialize in basic primary care services such as immunizations, check-ups and other screenings and typically are staffed by a nurse practitioner or physician's assistant. Patients can stop in without an appointment.

HSAs

Goodman first came to prominence in the 1990s as an advocate of health savings accounts, in which people are allowed to deposit tax-free funds to defray medical expenses.

In 2003, HSAs became recognized in federal law for people enrolled in high-deductible health insurance plans as part of the Medicare Prescription Drug Improvement and Modernization Act signed into law by President George W. Bush.

Goodman calls for expanded use of health savings accounts and elimination of the current restrictions limiting how much tax-free contributions people or their employers are allowed to make to them. The current limit on contributions to the accounts is $3,100 per person or $6,250 per family.

HSAs are a cornerstone of what is referred to as the "consumer-driven health care" movement. But they remain a controversial idea and have been criticized by Consumers Union and the American Public Health Association. According to Consumers Union, the accounts "benefit the wealthy, who can afford to place money in these tax-sheltered accounts, and the healthy who seldom use health care services" while undermining health insurance for everyone else.

Goodman's appearance at the Dole Institute is a part of a tour promoting his book. He will be available for signings of the book at the event, which is scheduled to begin at 3 p.m. Oct. 16. The event is free and open to the public at the Dole Institute, which is in Lawrence on KU's west campus (map).