An effective solution to the mis-aligned incentives in the insured fee-for-service health system is to transfer the fiscal responsibility for the cost of treatment decisions from the patient (ie, insurance) to the physician. Its called an HMO. Research has clearly demonstrated the beneficial impact of 'capitated' financing on cost, quality, prevention and the implementation of state of the art information technologies, all of which everyone agrees are under-used in traditional fee-for-service medicine.

So, how do we get there? Government cannot run HMOs, but it can create a marketplace in which all citizens have access to health insurance and then let the various plans compete. This is essentially what the Heritage Foundation recommends, though the average citizens may not understand the reasons for this recommendation.

I do have one recommendation for change in the system proposed by the Heritage Foundation. We have to have a minimum coverage package for all plans. For example, if we allow plans to limit their maximum payout, then the young and healthy consumers attracted to these plans who have a serious accident will end up with no insurance and no resources. While flexibility of coverage is a good idea, such as large deductibles, we need to insure that all citizens who suffer a catestrophic event have coverage rather than falling back onto a societal safety net.

Provide the care, send 'em home and take the expenses out of the Foreign Aid we glibly pass out to the parent country.

So if we are going to improve the health care we need to involve a reform of those giving the care.