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Jane Norton on health care

If you’re looking for the latest drama in Colorado politics, or a accusations that Jane Norton is a liar, you have the wrong post.  This post is about what Norton says about health care policy.

Jane Norton is seeking the Republican Party’s nomination to run for U.S. Senate this Fall. The Denver Post’s eidtorial board interviewed her in July. Here’s the published section on health care:

Q: What about health care spending? What would you do there?

A: My first agenda . . . would be to repeal Obamacare. A $2.5 trillion proposal, the more and more we see what it does, the more onerous it is on our small businesses. We could pass substantive health care reform right now that would get at the goal of bringing the cost of health care down. You have to look at the drivers of health care costs. One of them is defensive medicine. So there’s a line or two [in the bill] but nothing substantive about tort reform so what we’ve done in Colorado was to put caps back on non-economic damages. We know that’s one of the drivers and that helps. So tort reform.

Tax liability. One of the fastest-growing areas if we have any job growth is with individuals who are setting out on their own. We need tax equity so that a person who purchases health care has the same tax benefit as somebody who purchases it in a group. Portability, so if you changed jobs you could take your health plan with you. The ability to purchase across state lines is another important one that I believe would bring the cost of health care down. If you inject choice and competition into the marketplace and don’t have so many market distortions, you can actually bring the cost down.

Comments:  She’s right about ObamaCare (HR 3590). Be careful about defensive medicine, and she’s right about the tax treatment of insurance and buying insurance across state lines. Though she should not conflate “health care” with “health insurance” as she does above, as they are quite different.


ObamaCare is HR 3590. For a detailed analysis of its harms, see Bad Medicine by Michael Tanner of the Cato Institute.

Defensive medicine: This looks like an easy target, and surely there’s room for improvement in how medical liability cases are decided. But there’s reason to question how big a factor it is in increasing health care costs.  In Forbes, Shikha Dalmia wrote:

According to a 2007 study by McKinsey&Company, physician compensation bumps up health care spending in America by $58 billion annually,on average, because U.S. doctors make twice as much as their OECD peers. And even the poorest inspecializations like radiology and surgery routinely rake in around $400,000 annually.

Doctors–and many Republicans–constantly carp about the costs of “defensive medicine” because it forces providers to perform unnecessary procedures and tests to insulate them from potential lawsuits. But excessive physician salaries contribute nearly three times more to wasteful health care spending than the $20 billion or so that defensive medicine does. “While the U.S. malpractice system is extraordinary,” the study notes, “it is only a small contributor to the higher cost of health care in the United States.”

Also in Forbes, Shirly Svorny writes:

A new Congressional Budget Office report estimates that a set of tort reform measures — including caps on awards for non-economic and punitive damages — would have lowered total national health care spending in 2009 by $11 billion, largely by reducing so-called defensive medicine. Damage caps, though, would result in patients losing the benefit of the market oversight and penalties associated with malpractice underwriting. Capping liability could have the unintended consequence of reducing private market efforts to investigate the risk characteristics of the individuals they insure and of hurting patients.

Read the whole article.

Health care, health insurance, and health plans: Insurance is a way of paying for health care.  What we call health “insurance” often is not really insurance, but a prepaid health plan.  So “health plan” is the most general term. Some health plans are really insurance, in that they generally don’t pay for routine and predictable expenses.