Speaker examines the state of healthcare in the United States

Tyler Prochazka

As part of WKU’s constitution week, the WKU BB&T Center for Capitalism hosted a lecture featuring John Goodman, one of the “four most influential individuals” on health care in the United States.
Goodman spoke yesterday about the state of health care in the United States in light of the recent Supreme Court decision that upheld the Affordable Care Act.

Goodman, who has a PhD in economics from Columbia University, said he believes the current system of health care is unsustainable and will necessarily “collapse” unless reforms are put in place.


In the beginning of the presentation, Goodman took out his iPhone and said there are a wide variety of affordable stores to get his phone fixed, but there are only limited and expensive options for his own health.

“Why is the market so good to my iPhone, but so mean to me?” he said.

His theory was that the current health care market has been distorted with perverse incentives, largely from the federal government, that remove competition from the health sector.

Without this competition, Goodman said, prices go up and quality stagnates.

“When (companies) don’t compete on price, they don’t compete on quality either,” he said.

Specifically, Goodman said that third-party payers, such as insurers and the government, take away the consumers incentive to shop for the best deal in health care.

This has distanced doctors from their patients needs, he said.

“Doctors are slaves to the third-party system,” Goodman said.

Medicaid and Medicare, the health care program for the poor and elderly respectively, both have lists of procedures that are paid for. If something is not on the list, then it is typically not performed, which lowers innovation and quality, according to Goodman.

Goodman’s solution: Allow poor people to buy health care like they buy food.

In essence, Goodman recommended transitioning this aid out of these government programs and to the private market, much like how food stamps operate like cash at grocery stores.

Currently, it is often illegal to pay physicians on top of what government programs offer, which is what Goodman said can shut-out many poor people from the health care market.

“The big problem (for impoverished individuals) is finding a physician who will see Medicaid patients,” he said.

This could be done through a universal refundable tax credit that is only given to those who purchase health care. It would allow competition and access to health care for everyone.

According to Goodman, at the current rate the price of health care in the United States is rising twice as fast as wages. This means if nothing is done to remedy the situation, Goodman said, many Americans’ entire paycheck would be used for health care in a couple decades.

Goodman said that doctors are not currently encouraged to find the lowest-cost medication or the best deal for consumers, which is part of why costs keep rising so rapidly. He said this too is due to the lack of real market competition in health care.

While he acknowledged many are skeptical of a free-market in health care, Goodman offered examples of innovations in the health care sector that have worked outside of government intervention.

Walk-in clinics, which are paid for directly by the consumer, have low-cost high quality service outside of third-party payers, according to Goodman.
He also said lasik and cosmetic surgery, neither of which is covered by insurance, have gone substantially down in cost and increased in quality, while the rest of the health care market has done the opposite.
This, Goodman said, is due to the competition they face among consumers since they have to pay out of pocket.
“Instead of Washington telling doctors what they can do, lets let doctors tell Washington what they can do,” he said.

Goodman also outlined several possible issues with the Affordable Care Act, commonly referred to as “Obamacare.”

One of the issues Goodman outlined was the fine with the individual mandate, which requires all U.S. citizens purchase health insurance.

Goodman said the fine was too low to induce enough people to purchase healthcare. He said this means many people will wait until they are sick to buy health care which will cause the cost of insurance to increase rapidly.

When asked how to solve the issue, he said it will come by “liberating the system.”

However, Goodman said that the answer probably will not come from the federal government unless Americans put enough pressure on politicians.

“We won’t solve these problems if Washington dictates answers,” he said.