Avik Roy is the co-founder and president of the Foundation for Research on Equal Opportunity (FREEOP). Avik joins Policy@McCombs to make the conservative case for universal health insurance.<\/p>\n","protected":false},"excerpt":{"rendered":"Avik Roy is the co-founder and president of the Foundation for Research on Equal Opportunity (FREEOP). Avik joins Policy@McCombs to make the conservative case for universal health insurance.","protected":false},"author":13,"featured_media":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","episode_type":"audio","audio_file":"http:\/\/podcasts.la.utexas.edu\/cepa\/wp-content\/uploads\/sites\/21\/2019\/04\/Policy-at-McCombs-Avik-Roy-in-Studio.mp3","podmotor_file_id":"","podmotor_episode_id":"","cover_image":"","cover_image_id":"","duration":"","filesize":"45.96M","filesize_raw":"48197408","date_recorded":"18-04-2019","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":""},"tags":[18,13,12,20,15,17,16,14,19],"categories":[],"series":[2],"class_list":{"0":"post-14","1":"podcast","2":"type-podcast","3":"status-publish","5":"tag-austin","6":"tag-avik","7":"tag-avik-roy","8":"tag-business","9":"tag-cepa","10":"tag-mccombs","11":"tag-policy-at-mccombs","12":"tag-roy","13":"tag-texas","14":"series-policymccombs","15":"entry"},"acf":{"related_episodes":"","hosts":[{"ID":693,"post_author":"38","post_date":"2020-10-29 17:58:44","post_date_gmt":"2020-10-29 17:58:44","post_content":"\n
Carlos M. Carvalho is an associate professor of statistics at McCombs. Dr. Carvalho received his Ph.D. in Statistics from Duke University in 2006. His research focuses on Bayesian statistics in complex, high-dimensional problems with applications ranging from finance to genetics. Some of his current projects include work on large-scale factor models, graphical models, Bayesian model selection, particle filtering and stochastic volatility models.<\/p>\n\n\n\n
Before moving to Texas Dr. Carvalho was part of the faculty at The University of Chicago Booth School of Business and, in 2009, he was awarded The Donald D. Harrington Fellowship by The University of Texas, Austin.<\/p>\n\n\n\n
Dr. Carvalho is from Rio de Janeiro, Brazil and before coming to the U.S. he received his Bachelor's degree in Economics from IBMEC Business School (Rio de Janeiro) followed by a Masters's degree in Statistics from the Federal University of Rio de Janeiro (UFRJ).<\/p>\n","post_title":"Carlos Carvalho","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"carlos-carvalho","to_ping":"","pinged":"","post_modified":"2020-10-29 17:59:59","post_modified_gmt":"2020-10-29 17:59:59","post_content_filtered":"","post_parent":0,"guid":"http:\/\/podcasts.la.utexas.edu\/cepa\/?post_type=speaker&p=693","menu_order":0,"post_type":"speaker","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":580,"post_author":"42","post_date":"2020-07-03 19:53:40","post_date_gmt":"2020-07-03 19:53:40","post_content":"\n
Mario Villarreal-Diaz is CEPA\u2019s Managing Director and Senior Scholar. Mario joins CEPA from the University of Arizona where he was an Associate Professor at the Department of Political Economy and Moral Science and taught in the Philosophy, Politics, Economics, and Law undergraduate major.<\/p>\n","post_title":"Mario Villarreal-Diaz","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"mario-villarreal-diaz","to_ping":"","pinged":"","post_modified":"2020-07-03 19:53:41","post_modified_gmt":"2020-07-03 19:53:41","post_content_filtered":"","post_parent":0,"guid":"http:\/\/podcasts.la.utexas.edu\/cepa\/?post_type=speaker&p=580","menu_order":0,"post_type":"speaker","post_mime_type":"","comment_count":"0","filter":"raw"}],"guests":[{"ID":576,"post_author":"42","post_date":"2020-07-03 19:49:51","post_date_gmt":"2020-07-03 19:49:51","post_content":"\n
Avik Roy is the President of the Foundation for Research on Equal Opportunity (FREOPP.org), a non-partisan, non-profit think tank that conducts original research on expanding opportunity to those who least have it. Roy\u2019s work has been praised widely on both the right and the left.\u00a0National Review<\/em>\u00a0has called him one of the nation\u2019s \u201csharpest policy minds,\u201d while the\u00a0New York Times<\/em>\u2019 Paul Krugman described him as man of \u201cpersonal and moral courage.\u201d<\/p>\n\n\n\n Roy has advised three presidential candidates on policy, including Marco Rubio, Rick Perry, and Mitt Romney. As the Senior Advisor to Perry\u2019s campaign in 2015, Roy was also the lead author of Gov. Perry\u2019s major policy speeches. The Wall Street Journal<\/em> called Perry\u2019s address on intergenerational black poverty \u201cthe speech of the campaign so far.\u201d<\/p>\n\n\n\n Roy also serves as the Opinion Editor at Forbes<\/em>, where he writes on politics and policy, and manages The Apothecary, the influential Forbes<\/em> blog on health care policy and entitlement reform. Hugh Hewitt has called Roy \u201cthe most influential conservative analyst on health care.\u201d NBC\u2019s Chuck Todd, on Meet the Press<\/em>, said Roy was one \u201cof the most thoughtful guys [who has] been debating\u201d health care reform. MSNBC\u2019s Chris Hayes calls The Apothecary \u201cone of the best takes from conservatives on that set of issues.\u201d Ezra Klein, in the Washington Post<\/em>, called The Apothecary one of the few \u201cblogs I disagree with [that] I check daily.\u201d<\/p>\n\n\n\n Roy is the author of How Medicaid Fails the Poor<\/em>, published by Encounter Books in 2013, and Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency<\/em>, a second edition of which was published in 2016 by FREOPP. He serves on the advisory board of the National Institute for Health Care Management, is a Senior Advisor to the Bipartisan Policy Center, and co-chaired the Fixing Veterans Health Care Policy\u2008Taskforce.<\/p>\n\n\n\n Roy\u2019s writing has also appeared in The Wall<\/em>\u2008Street Journal<\/em>, The New York Times<\/em>, The Washington Post<\/em>, USA Today<\/em>, The Atlantic<\/em>, National Review<\/em>, The Weekly Standard<\/em>, and National Affairs<\/em>, among other publications.<\/p>\n\n\n\n He is a frequent guest on television news programs, including appearances on Fox News, Fox Business, NBC, MSNBC, CNBC, Bloomberg, CBS, PBS, and HBO.<\/p>\n\n\n\n From 2011 to 2016, Roy served as a Senior Fellow at the Manhattan Institute for Policy Research, where he conducted research on the Affordable Care Act, entitlement reform, universal coverage, international health systems, and FDA policy. Previously, he served as an analyst and portfolio manager at Bain Capital, J.P. Morgan, and other firms.<\/p>\n\n\n\n He was born and raised near Detroit, Michigan, and graduated from high school in San Antonio, Texas.\u00a0USA Today<\/em>\u00a0named him to its All-USA High School Academic First Team, honoring the top 20 high school seniors in the country. Roy was educated at the Massachusetts Institute of Technology, where he studied molecular biology, and the Yale University School of Medicine.<\/p>\n","post_title":"Avik Roy","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"avik-roy","to_ping":"","pinged":"","post_modified":"2020-07-03 19:49:52","post_modified_gmt":"2020-07-03 19:49:52","post_content_filtered":"","post_parent":0,"guid":"http:\/\/podcasts.la.utexas.edu\/cepa\/?post_type=speaker&p=576","menu_order":0,"post_type":"speaker","post_mime_type":"","comment_count":"0","filter":"raw"}],"transcript":" Welcome to the Policy of McCombs podcast, a data driven conversation on the economic
\nissues up today in this series. We invite guests into our studio to provide a highlight
\nof their work presented during a visit to the University of Texas at Austin Policy.
\nEmma Combs is produced by the Center for Enterprise and Policy Analytics at the McCombs School of Business.
\nI am your co-host, Carlos Carvalho, with my colleague Mario Villarreal.
\nOur guest today is over Roy overcash, a scientist, investment analyst, journalist and policy
\nadvisor. He co-founded the Foundation for Research on Equal Opportunity, a nonpartisan think tank
\nfocusing on expanding economic opportunities for those with these have over has been policy adviser
\nto three Republican Party presidential candidates and is also the policy editor for Forbes magazine over.
\nWelcome to Policy McCombs. It’s great to be here. I think this is the first podcast I’ve ever recorded in
\nthe presence of Steinway Piano. Oh, yes, we are in very fancy studio
\nhere at u._t. So let’s start by telling us. Tell us a little bit about
\nfree Opta. The foundation you started. Yeah. Thanks, Carlos. Good to be with you. So
\nthat free up or the Foundation for Research on Equal Opportunities, a new think tank. We found that it in 2016
\nis about two and a half years old and we founded it because we came away
\nfrom the 2016 election and a lot of things that have been building up in
\nour politics leading up to 2016. Concluding that our politics were broken,
\nand I don’t just mean that in the way that a lot of us mean it. You know, there’s
\na lot of yelling on cable news. We have the sense that that we’re hopelessly divided American.
\nIf you watch TV a lot, you you will be confused. You could conclude fairly that we’re hopelessly
\ndivided. But the thing is, I think what a lot of people out there in the country and in places like
\nAustin realize is that we’re not actually hopelessly divided, that if you look at public opinion
\nsurveys, if you look at political signs, if you talk to people, your neighbors, your family,
\nyour friends, your community, you realize that we’re actually almost entirely united
\non what America ought to stand for. And that is to say about 80 percent of Americas,
\nif you look at polls, agree with the principle that America should be a place
\nwhere there’s equal opportunity, not necessarily equal outcomes. You can’t guarantee equal outcomes.
\nBut we should be a country in which every American, regardless of where whether you came, where you came from,
\nwhere your parents came from, what side of the tracks you grew up on, how much
\nmoney your parents make, that you should have a fair shot at success in America, that those things
\nshould not be a barrier to you achieving your aspirations in your dreams,
\nand that 80 percent may have different views as to exactly how you define equal opportunity or what policies
\nyou might need to implement in order to achieve equal opportunity. But if we’re starting from the same principle,
\nthat’s 80 percent of the battle. I think, you know, again, those the conventional wisdom that we’re
\nhopelessly divided is that we can’t agree on the basic principles and therefore we’ll never agree on
\npolicies and we won’t agree on reforms. But have 80 percent of Americans agree on the principle of equal
\nopportunity, then what we’re really debating is evidence. We’re debating the evidence as to whether
\ncertain policies work better than others. And that is the perfect place for a think
\ntank to set itself up, to set up shop, to say, you know what? We don’t care if you’re a Democrat or Republican.
\nIf you believe that every American ought to have a fair shot at success, we’re going to try to do research
\non developing a set of policies that that both Republicans and
\nDemocrats can rally around because they both believe in equal opportunity. And
\nand that’s why we focus on, in particular, the way in which free enterprise and
\ntechnological innovation and individual individual initiative lead to equal opportunity,
\nbecause that to us is the true bipartisan consensus that the
\nyou get the Republicans on free enterprise and the Democrats on social mobility. And that’s how you get
\nget 60 votes for them and a lot of think tanks there. The while
\nthey are technically 5 or 1, see through your organizations that are nonpartizan de facto, they
\nend up being partisan and they rely on and wait for either the Democrats or the Republicans to have complete
\ncontrol of the government before they can actually hope that any of their ideas make it into legislation.
\nOur approach is the opposite. We’re actually trying to setup ideas and reforms and policies
\nthat can work and be enacted in any government, whether it’s Democrat or Republican
\nor where it’s split like it is today. So that’s what’s been one of the exciting things about working at FROMTHOSE. When
\nwe started it, this was a theory we had this theory that there was this massive gap we could
\ncall in the middle. But we’re talking about 80 percent between the between the 10 yard lines on the football
\nfield that others weren’t as as as as occupying with as much alacrity.
\nAnd two and half year, two and half years later, all I can say is that we’re we’re busier
\nthan ever that that everything we we thought and hoped for about our politics, as has
\nbeen reflected in how busy we are and how much traction our ideas are getting into today.
\nJoin us to talk about, I guess, an example of of this. Does being in the
\neight yards, eight yards between the middle of the field. You’re joining us to talk about the conservative
\ncase for universal health insurance. So so two sides of the discussion
\nin health care. So to make that case. Yeah. In fact, it’s
\napropos what we’re just talking about in that it was my experience writing about and studying
\nhealth care policy that led me to have this broader view of American politics.
\nThat is to say, our health care system is so messed up that conservatives
\nand progressives can win at the same time with the right reforms. You can have a health
\ncare system in America in which everyone has health insurance, something that progressives traditionally
\ncare about a lot, but also a system that’s more fiscally sustainable, that has
\nmore choice and less heavy handed intrusion in order to guarantee that
\nbasic financial security for every American. So there are things that we can do to make the health care system more
\nconservative in ways that also achieve outcomes that progressives care about. And as
\nI mentioned, that’s that’s that’s not just true in health care. That’s true in housing policy. That’s true in education
\nthat. True, when it comes to the cost of living, that is true when it comes to economic growth, there are lots of
\nareas where both progressives and and conservatives can win. But in health care specifically,
\nit’s especially true if you look around the world. I think something we actually don’t do enough in our health
\ncare debates. You know, you hear people say, well, the one thing you hear people say is, well, we spend more than every other country.
\nAnd we our health care outcomes are no different than other countries that you hear. But but if you’d just
\nif you go beyond that superficial description and really dig into how it
\nis that other countries have achieved universal coverage and how it is they’ve
\nachieved better outcomes than the United States. There’s actually a really broad diversity
\nof ways in which other countries have achieved that. It’s not just single payer. So there’s
\nthere’s actually this kind of stereotype on both the right and the left that the only way to achieve universal coverage
\nis through single payer healthcare in which the government is the only insurance company. But that’s not actually true.
\nThere are countries like Switzerland that have universal private health insurance systems
\nwhere in fact there is no public option or any government run health insurer. Then there are a lot
\nof countries, for example, like Germany, which are a hybrid, where there are public insurers and their private insurers
\nthat work in concert and compete against each other in the open market. So there are a lot of
\ndifferent ways to achieve universal coverage. And as a part of what we’ve been doing,
\nit free up is to try to bring some of those more market based models into focus in the United States
\npolicy discussion. Let’s try to clarify the role of markets where where would the market forces
\nbe playing a role in in the case that you’re putting forward here?
\nWell, let’s let’s step back a little bit again philosophically. So the there are I’d say there
\nare two coherent, economically coherent ways to run a health care system.
\nOne is to have a single payer system in which the government is subsidizing health insurance for everyone.
\nAnd in order to control the costs, if you make something free and you don’t have cost
\ncontrols and it’ll be like me in an open bar. People will consume the most expensive care at wasteful
\nrates and and that will lead to a lot of overspending. So single payer countries deal with
\nthis by regulating access to costly services and regulating the price
\nof health care services. So price controls, rationing are really a central features of a true single
\npayer system because that’s how you keep the costs down and that works. So contrary to what a lot
\nof conservatives believe, single payer systems like Canada, for example, or the
\nU.K. do actually spend a lot less than the U.S. and have universal
\nhealth insurance. There are a lot of drawbacks to those kind of system, but they do they are more fiscally rational
\nthan the U.S., where we actually subsidize health insurance for almost everybody. Not everybody would. Almost everybody
\nlet’s say 90 percent of the country has subsidized health insurance in one form or another. But we
\nhave no cost controls. And not only no cost controls, we actually reward
\nthe suppliers of health care services and products if they charge higher prices. We
\ndon’t reward them for competing and charging lower price. So we have an incredibly perverted system in the U.S.
\nThe single payer system can work. Now, the other the flip side of that is if you had a true market system,
\nwhat would that look like in a true market system? It would look more like the
\ncountries like Switzerland and Singapore, where every individual in the case
\nof Switzerland in particular chooses their own insurance plan. So in America, most
\nof us, half of us, more than half of Americans get their insurance through their employer. And in that context,
\nyou’re not choosing your plan. It’s chosen for you by some bureaucrat at the company you work for, and
\nit’s taken out. The premiums are taken out of your paycheck pretax. So you never actually see how
\nmuch is being taken out of your paycheck to spend it. That’s not a market based system. Again, it’s like me at the open
\nbar where I don’t know what, especially if it’s at an in-law’s wedding. I’m going over there and I’m getting the fanciest bourbon I
\ncan find on. And I don’t care what it costs because they could charge 200 bucks for the bourbon is all I care cause cause
\nI’m not paying for it. Right. And our health care system is basically a three trillion dollar open bar. So in a true market,
\nwhat we would do is we would say to people, buy your own insurance and we’ll have a safety net in which
\nif you’re really poor or really sick or really vulnerable, we’ll subsidize the cost of your insurance
\nup to a point. But we’ll also reward you if you shop intelligently and find a plan
\nthat is doing the best job of providing that range of services at the lowest possible price. And if you
\ndo that, then you can keep those savings yourself. Save them for in a health savings account
\nor use them for other non health care spending. So if you do that, broadly speaking, the way
\nto think about it is to move our system to a more market based system, because our system is not
\na market based system. You have to do two things. One, more people have to buy
\ntheir own insurance because today of the 90 percent of Americans who have health insurance,
\nabout 90 percent of those don’t shop for their own insurance. They get it handed to them. Either
\nby their employer or the government. So the more you move to a system in which people are shopping for their own insurance,
\nthe more you have a market that’s peace number one. And peace number two, which flows directly from
\nthat, is if people are shopping for their own insurance, you’re you’re going to organically
\nmove more to a system in which only the costliest things are insured.
\nSo if you think about insurance today, compare health insurance to auto insurance. Right. When we buy car
\ninsurance, the car insurance doesn’t pay for our gasoline at the Exxon
\nstation or a change for oil change. Right. The insurance pays what your car
\ngets totaled or your car gets stolen. So that thirty thousand bucks you’d have to spend replacing
\nyour car that’s covered by insurance. That’s how health insurance should
\nwork to and did work until we started subsidizing it and all the nontransparent ways
\nwe do. And if you had more of a market based system in which you as a patient control
\nthe dollars that were being spent on insurance on your behalf. If you’re spending those yourself, you know what you’re gonna do?
\nYou’re gonna move. Most people are gonna move to a model. It’s more like car insurance where, yes, I
\nwant to make sure if I’m 26 years old or 35 years old, I’m fine. Probably if I’m in good health, then
\nI’m protected. If I get hit by a bus or I’ll have a stroke or I get cancer. But from my everyday expenses,
\nall that money I’m not giving to the insurance company, I can save and then spend on other things.
\nAnd so naturally, if people are shopping for their own insurance in a market, in an individual market, not
\nan employer based system or a government based system, then people will naturally
\nsay, you know what, the things I really want to be protected against are these high costs. But for everyday
\nroutine costs, I’m more comfortable paying for that directly. And so
\nso that that’s a second step. So that’s the first step is buy insurance yourself because then
\nyou get the savings if you if insurance insurers are competing on cost. And then the second
\nbit of it is the more you’re buying insurance on your own. The more likely you’re incentivized
\nto insure a fewer things. And therefore more things are then paid for directly
\nby you rather than by a third party. And that’s once you get to that
\npoint, then health care really looks like a true market. Think about it. A great example. So you hear people say,
\nwell, if we want to have a market in health insurance or health care, we’ve got to have price transparency.
\nWe’ve got to require that hospitals and doctors post the prices of all their services.
\nWell, you know, it’s funny. Very few people stop to ask why is it that we don’t have to the law forcing BestBuy
\nto post their prices when you go to shop for a TV at Best Buy? No. There’s no law needed because
\nBest Buy knows that if you want to buy a TV, you’re not going to buy the TV if you don’t know how much it costs.
\nRight. So why does that system work? Because you, the consumer, are controlling
\nthe dollars. And in health care, if the consumer is controlling the dollars. Price
\ntransparency will naturally flow from that because the doctors are not going to get your business
\nunless you know ahead of time how much is coming out of your pocket to pay for that service. Now, again,
\nthere’s some subtleties and some asterisks that if you want to we can get into with all this, because health care has some quirks.
\nBut that’s the general principle. More people, if not everyone, shopping for their own health insurance
\nand then more and more things, more and more ways. Because of that, we move to a rational
\ninsurance model where health insurance looks more like car insurance. That sounds great. But I think that the piece
\nthat’s missing still and I am I understand is a how do we make it universal? What is that? So that’s the word,
\nthe role of the government to come in and subsidize the purchase. Is that correct assumption? Yeah. So one of
\nthe things that’s really amazing about American health care and this is one of the key
\nslides that I’ll present in the talk that that as accompanying this podcast at the University of Texas,
\nwhich which everyone can watch it later on in our website, is that the
\nthe per capita public spend on health care in America is higher than almost
\nevery other country in the world, despite the fact that we have 25, 30 million people uninsured.
\nOur health care system is so inefficient that we spend more on government spending than almost
\nevery other country in the world. And we still have so many uninsured people. Why is that? There are two key reasons
\nwhy we spend all this money, and yet we still have a problem with people struggling to afford health insurance.
\nThe first is what we’ve talked about already to a degree, which is that health care is so expensive in America. The unit price
\nof a day in the hospital or a prescription drug or a lab test is two to three
\nto five to 10x higher in the U.S. and in other countries. So we have to spend more subsidizing health
\ninsurance and health care because the unit prices of everything are so much higher. That’s problem number one.
\nBut problem number two, which is just as significant, if not more so.
\nIs that we subsidize almost everybody’s health insurance. So wealthy people get a massive
\nsubsidy to buy healthy, generous health and insurance benefits in the U.S., the
\nupper middle class people making two hundred three hundred thousand dollars a year get generous subsidies in the employer
\nbased system. Tax breaks to buy health insurance. So what’s the biggest difference between a country
\nlike Switzerland, say, which has a universal market-based system in America? The biggest
\ndifference is that in Switzerland, the government is only subsidizing the cost of health insurance
\nfor the bottom 30 percent of the population in wealth or health status.
\nWhereas in America, again, we’re actually we’re subsidizing coverage generously for very, very poor people,
\nfor the upper middle class and above. And it’s sort of the middle class and the lower middle class or people in that
\nrange of incomes who are the most the least subsidized relative to their costs in
\nincome and health status in America. So we have this upside down system where we over subsidized coverage
\nfor the wealthy and under subsidize it for the working poor and the lower middle class. So
\nall you have to do, if I can put it put it very simplistically, is to actually
\nend and curtail subsidies for the wealthy and rectify some of the inequities
\nin how we subsidize coverage for the working poor. And you can spend a lot less money than we spend
\nnow and cover everybody so you can have far less spending and universal
\ncoverage. If you if you move this, if you rationalize away, we subsidize coverage. And then if you tackle the high cost
\nof care with things we can we can talk about for ages, for hours,
\nyou can actually make the cost of health insurance overall less expensive, which also reduces the amount
\nof spending that covering the uninsured takes. All of you. You
\ndiscussed some of the drawbacks of the single payer system and you just elaborate
\na little bit on those. Now how about your proposal? Some argue
\nthat a consumer driven health care system may be problematic because
\nafter all, consumers do not have all the necessary information to make educated choices about
\nthings related to health care medicine. How would you respond to that criticism? Or do you
\nsee any order drawbacks on your proposal? Do you know what LTE stands for? No, but
\nI will guess that you are going to tell me. No, I’m not going to tell. I’m really going to leave it a secret for for
\nyou and our audience to look up. All right. But LTE is the protocol in which
\nmost cell phones in United States run on. Oh, yeah, right.
\nNow, you didn’t know what l.T stands for, and again, we’re gonna keep it a secret so people gonna look it up later.
\nBut you have a cell phone that uses LTE. Yeah. Just look at it. Not right now. And you’re you’re right. He says l.T.
\nRight. So, you know, isn’t it amazing that you’re able to buy a cell phone and use it every day and
\ncheck your email on it and not actually know how data is transmitted over the network and
\ngets to Carlos over here so you can tell him where to have dinner tonight. It’s amazing, right?
\nThere are a lot of things about our world that we don’t understand how they work, but we use them every
\nday. So it’s not actually necessary to know the intricacies
\nof how the met the practice of medicine happens or or the latest
\nin medical science or the way the details, the intricacies of how health economics works to
\nhave to have a user friendly system in which health insurance and the basic
\nutility of health insurance and health care is usable for you. So so
\nthat’s one that’s one element of this whole thing about, you know, people will say, well, you know, if consumers
\ndon’t really understand health care, therefore there’s an asymmetry of information and therefore,
\nthey should never be allowed to actually have any choices. Well, this is true of airlines, right? Like, I don’t know how
\nto fly a plane. I’m trusting that the you know, the mechanics fix that plane, that it works and that the pilot
\nknows how to fly it. And, yes, there are regulations that help govern that. But I still have an
\noption to fly on American Airlines or United Airlines or Delta or Allegiant or Southwest or whatever
\nI want to do. Right. So similarly, in health care, the asymmetry
\nof information is not unique to health care. So that, as you know and you’re alluding to, there was a Stanford economist
\nor is a Stanford economist named kenora Can\u00e2\u20act, who a little over 50 years ago made this
\nargument that, well, there’s this asymmetry of information and health care and therefore we should
\nremove people even more from the choices that they’re making. And that makes absolutely
\nno sense, because actually everything that we do, every choice we make, every day, every product or
\nservice that we consume contains some asymmetry of information. In fact, the original
\nlegal structure of asymmetry information or that description of it was in the real estate.
\nThe ancient Latin phrase caveat emptor comes from the idea that if I sell you
\na house, I know a lot more about whether that house is in good repair than you do. And yes, we try to
\naddress that through having an inspection in this and that. But there still may be something about that house that I’ve hidden
\nfrom you that you know, you’re not going to know about. That’s why that we say let the buyer beware. Right. It’s a buyer’s
\nresponsibility. No. There’s an asymmetry of information there. There’s an asymmetry of information with a car mechanic. You
\ntake your car to the mechanic and, you know, you’re trusting that he’s telling you what’s actually wrong with your car instead of selling
\nyou an extra set of services. You don’t really need. So we but we don’t yet have a single payer system
\nfor car mechanics. Maybe we ought to know where we really should have a single payer system is for league for lawyers,
\nbecause if there’s anything I don’t understand, it’s the law. And so I really do understand, given the asymmetry of
\ninformation with lawyers, that we don’t have a single payer system for law. But but by one, I don’t wanna get too
\nfar afield here. So so so what is it? But this is but this is an important part
\nof the debate, right. So that the people who are more market oriented philosophically and comes to health care, the market based advocates
\nlike myself have much more confidence in the consumer to make choices that maybe
\npeople on the other side of this debate don’t. But that isn’t to say that we shouldn’t
\nbe mindful of asymmetry of information. We should do it. We can do to solve it. Technology
\nallows us to do that more and more every day. Right. So think about the fact that, you know, until
\nabout 15 years ago, you couldn’t go online and look up diseases right the
\nway you can. Now with Web M.D. era, an infinite number of Web sites where, OK, I’ve got this weird kind of
\nred scratchy thing on my tummy and I don’t know what it is. And do I have eczema or not? I don’t know. I’m gonna
\nlook it up and see and see what what I should do about it. It’s like an instant second opinion. Any physician who
\nyou talk to, if you really want to, you can, of course, deliver, delve into the medical literature and find out what the latest
\ntreatments are. So all these opportunities are available and more available every day, particularly
\nas artificial intelligence and machine learning allow those kinds of technologies
\nto be more accessible to the everyday person. Think about this. There are apps. They’re not legal in the
\nU.S. because of our wonderful regulatory system, but in other countries, are there smartphone apps
\nthat allow you to take a photograph on your iPhone camera or smartphone camera of a little
\nsplotch you have on your skin? And the the camera sends the image
\nto a to a cloud based artificial intelligence
\nprogram that analyzes whether that lesion could be melanoma or whether it’s
\nharmless. And statistically speaking, that system is more accurate
\nthan your local dermatologist. Now, why do we have that system in the U.S.? Again, it’s because the FDA
\nhas been very cautious in entrusting patients with their smartphones to make
\nthese kinds of diagnoses themselves. Those, but more and more, the asymmetry of information
\nis going to go in the other direction where the patient actually has more accurate knowledge of his own medical
\ncondition than does his primary care physician, because the particuarly for rare diseases,
\nright. Because if you’ve got a rare disease and your primary care physician doesn’t see that often or ever, you’re gonna be
\nthe one who’s done all the research on that disease. Doctor’s not going have done it right. So you’re
\ngonna be able to go that doctors say, hey, I saw that there’s this new drug that just came out or there’s a drug in Phase 3 clinical
\ntrials. What do you think about the doctors not going to know. He’s going to have to kind of give you some, you know, kind
\nof superficial answer when he goes back to his computer and looks it up. So all this to say that asymmetry of
\ninformation is it goes in two directions in health care and we need to create
\nmore space for four patients and entrepreneurs to find
\nthose opportunities where the patient actually has more useful information
\nthan the physician does. We shouldn’t assume that the physician has this encyclopedia in his head
\nwith every piece of medical information in it. And so if anything, technology is going to move us more
\nin that direction are we ought allow that to happen. That’s a key part of where market based healthcare can be
\nbetter than single based single payer health care because it creates more opportunities for
\nconsumers and entrepreneurs and patients to think up ways to solve problems. Like the smartphone thing I
\nwas mentioning with the melanoma’s that a single payer system would never consider or invent.
\nSo let me let me turn to two winners and losers here. Right. If you’re able to get a proposal, all your ideas
\nthrough and, you know, into law, it sounds to me that at least in one component, when you mentioned that
\ncurrently we have a system that for a lot of services where two times three times up to 10 times more expensive then
\nthan other rich countries in the world who pay for it, fought for it for the same service
\nsomebody is going to lose if all of a sudden there’s a more competitive market that will bring those margins down.
\nRight. So who were the primary losers and winners of of of basically
\nwhat are the tradeoffs that we’re facing here? And who are the people that might resist this? Well, there’s basically
\ntwo. If you’ve really had a market based system in which there was real competition for health care
\nservices and fewer opportunities from monopolies and rent seeking,
\nwho would? Let’s talk about who would win first. The people would win. No. Above all else would be the patient,
\nright. The patient would have more choices. The patient would be spending less of his or her income
\non health care and less of his or her income on health insurance. So the patient would have a much greater
\namount of disposable income, which not only benefits that patient in terms of having money to
\nspend or save on other things. But if you think about it as a Keynesian stimulus, right, like think of
\nall the extra money that would flow to the rest of the economy, because instead of diverting all your money to
\nhealth insurance and health care, you’re spending that on a vacation or a new car or a new
\nTV, or maybe you’re getting a bigger apartment or you’re getting a new stove or you’re just able to
\nafford the everyday cost of living if you’re getting just to getting by now. So there’s an
\nenormous economic downstream stimulus that would lead to a lot of job growth, a lot of economic growth, not merely
\nthe fact that that you would have this this this increased disposable income at the
\npatient or household level. So that but but that’s like big winner number one.
\nBig winner number two is the taxpayer, because the taxpayer
\nwould have less pressure in terms of higher and higher tax bills if we’re spending less as a government
\nor at a federal, state and local level, governments plural on health care. So that
\nnot only means less of your tax dollars going to the government because we’re spending
\nless money in health care, which is the biggest driver of our deficits and debt. But think about all the
\nother public needs, whether we’re where we’re starving, the government of the resource needs to
\ndeal with other public challenges, whether it’s highways or schools or firemen
\nor anything else that you think is a is an important public priority that weren’t where we’re not spending money because
\nthe health care system is squeezing all that out. So the so the so there’s not only on the taxpayer
\nside, but also for other government priorities. The military is another great example is where the military budget is getting
\nsqueezed as a result of health care spending there. Whatever element of government spending
\nyou care about is going to be better off in a system in which we’re spending less on health care than we do today. So
\nthat that’s the kind of category number two of winners. Category number three of winners is people
\nwho are savers, people who’ve put away a little bit of money every year, every month, every paycheck
\nthroughout their lives and want that money to go farther in life, because the bigger our debts
\nand deficits get, what that does is that decreases the value of the U.S. dollar. And
\nas the U.S. dollar declines relative to the value of other currencies out there, then all that
\nmoney that you saved, it also decreases in value in terms of its purchasing power, particularly of
\ngoods that are manufactured elsewhere around the world. As you know, as we know, a lot of what we buy
\nis is made around the world. So. So those are the. Three categories of big winners,
\nI’d say extra. There’s a fourth category two entrepreneurs. The people who the innovators will be
\nunleashed in a system where they have an incentive to to provide health care service that consumers
\nactually want and drive higher quality and lower costs
\nfor the consumer using technology. The people who are able to do that, they’re going to be
\nbillionaires because they’re going to find ways to save everyday consumers and patients
\nmoney in ways that enrich consumers and enrich them, too, which is how capitals is supposed to work. So those are four
\ncategories of winners. So let’s not forget the currently uninsured. Oh, yeah, absolutely. So, yeah, I
\ncount them in the patient model, right. The people who are going to have lower health care expenditures and therefore have
\nmore are going to be able to afford their health care services. It’s not the uninsured is a big part
\nof the problem. But we should not forget the people who are just above being uninsured. Right. The people
\nwho are just getting by, who are who could be uninsured tomorrow if health care costs keep going
\nup and up and up and will be, in fact. So it’s not just the 25 million or uninsured. It’s I think
\nin the next 50 million or so of Americans, if not 100 million or so of Americans for whom
\nhealth care costs are putting a lot of pressure on their disposable income. So those are four categories of winners.
\nAnd then who are the losers? The losers are in part
\nvery the top seven executives at your at every hospital system in the country, because
\nright now those people are making enormous amounts of money, mainly because their monopoly powers that
\ncan that that can overcharge patients and that money flows somewhere, particularly in nonprofit hospitals.
\nThree quarters of American hospitals are non-profits. They don’t they don’t give that that money to shareholders. They
\ngive that money to themselves. And so senior management hospitals, that would be one
\narea, big losers, senior management and incumbent pharmaceutical and biotech companies similarly
\nwon’t be as as wealthy as they are today. And there are a lot of middlemen who
\nbenefit from the system as it is where there are people who you don’t see. You know, you know, they aren’t they aren’t the public
\nface of the system, but make a lot of money because there’s so much money sloshing around in the health care system
\nand so much regulation that the people who are administering the interstices
\nof that system collect a lot of dough. So there there will be there will certainly be compression
\nin in what we might call the income inequality of the health care system or the wealth inequality, the health
\ncare system, where if you’re at the very top of an established player in the health care system, particularly hospitals
\nand drug companies, you’re making enormous amounts of money now because
\nbecause of the prices you can charge. And as prices go down, those individuals may make less,
\nbut every other American will make more. Now, this is just a very interesting political
\neconomy issue, which is the winners you described, 10 for most
\npart being not that well organized, disperse
\ntheir abilities to actually make a compelling case collectively are not the
\nsame that these big potential losers. Right. That they are lobbying for
\nkeeping the system as it is that have many resources, they have a lot of stake. So how do you see this
\nunfolding? How do you see the political economy, the political process of the health care reform unfolding
\nor not in the near future, given this potential tension? Let me add to that. You
\nhave been working a couple bills, right? There are in Congress right now. So tell us a little bit about
\nthat as well. In the same context. Yeah, those are definitely related questions. So it’s it’s a
\ngeneral problem of political economy that policies in which the losers
\nare concentrated and the winners are diffuse are very difficult to enact.
\nA classic example, this is loopholes in the tax code, right, where we want to clean out the tax code, make it more fair.
\nBut the people who benefit from this particular obscure loophole fight like hell to
\nkeep it in there. And they often more often than not, when. And our health care system
\nis certainly a reflection of similar principles in that the beneficiaries of the high
\nunit prices in our health care system organize to defend
\nthat that entrenched system, the incumbents, rather than to protect
\nthe consumer. The the difference in health care is that
\nhealth care spending and the cost of health care is such a large percentage of not only our
\neconomy, but of the average American’s income that the the
\nthe losers are not. While they are diffuse in the sense that there are more of them for each
\nindividual American. The cost of health care is a deeply personal and stressful
\nissue. There is the risk of losing one’s health insurance in particular, and therefore the fear of going
\nbankrupt due to medical bills is pervasive. And even for those who have insurance,
\nyou know who. Let’s say you’re making thousand a year and you have a $6000 deductible and
\nyou use it because you. Tweaked your knee or something. You know, that’s a big chunk of your
\nincome that’s just gone, even though you theoretically have insurance. You like why would I have insurance for
\nif my deductible $6000 so. And because it’s not like the insurance is cheap. I mean, if the insurance was
\nactually cheap, if the insurer was costing you 10 bucks a month or something like that or 20 bucks a month. OK, fine.
\nBut if the insurance is costing you a thousand bucks a month and you have a $6000 deductible,
\nthat’s what people just just are exasperated by. I have another
\none of the charts that I’ll I’ll present at this talk I’m giving today at the University of
\nTexas is something that I actually had to recheck three times,
\nthat if you actually look at the average of the average American households tax rate, now that the after
\nthis most recent tips around a tax reform in late 2017, the average household in America has
\nan effective tax rate of about thirteen and a half percent. In other words, thirteen and a half percent of their income
\nis going to the IRS, the federal government. The average household
\nshare of national hospital spending is fourteen point eight percent.
\nAnd I talk about health care abroad, just talking hospitals. So if you add up what the average American household
\npays for health insurance, what they pay in out of pocket costs and what they pay in taxes
\nfor other people’s hospital costs, it’s actually more as a share of their income than
\nwhat they are spending, what they’re directly sending to the IRS, which is astounding.
\nRight. If you think about it like the. So so for the typical Republican who, you know, say
\njust pick on Republicans for saying typical Republican, you might say, well, you know, I’m not so I’m not a fan of Bernie’s system.
\nI don’t like price controls. So I’m going to I’m going to trust the status quo. I think that’s a free
\nmarket. And I’m going to listen to the hospital lobbyist who says don’t, don’t really mess with our income stream.
\nIt’s a market based system. You’re having your voters tell you every day
\nthat actually, you know, I don’t care about tax cuts anymore. You’ve cut my taxes. Thank you very much. But
\nyou know what? What’s really affecting me and what’s going to make my life meaningfully worse in the future is not my tax
\nrate. It’s the amount of money that hospitals are taken out of my paycheck. The hospitals
\nare more permanent for the average American family. Hospitals are more dangerous economically
\nthan the IRS, which is, you know, again, it’s an incredible fact, statistical fact.
\nBut it is. And this gets to the point, Carlos, that you were mentioning, which is that there
\nare now a number of bills that have been introduced in the Congress based on our work.
\nOne of them is a really ambitious, wide ranging bill that tries to tackle a broad range
\nof of these issues. It’s called the Fair Care Act by a congressman named Bruce Westerman, who tries to tackle
\nthe high cost of hospital care, the high cost of drugs. The problems around
\nthe regulatory regulations are on digital health that stymie entrepreneurs in the digital health space.
\nIt tries to tackle the regulatory problems in Obamacare and the employer based market reforms entitlement. So it’s doing
\na lot of different things to try to because it’s a big problem. You have to tack on a number of different ways. Bruce Westerman is Bill
\nthe Fair Care Act as is is I have to give all the credit to him for willing to take on
\nthese big challenges. And you can look up his bill online, which is the most the bill
\nthat most broadly reflects the broad range of principles that we’ve been developing and free up. But
\nlet me leave his bill aside for a second and talk about another congressman
\nnamed Jim Banks from Indiana who’s put out a bill called the Hospital Competition Act of Twenty.
\nIn fact, Hospital Competition Act of 2019 is largely incorporated into Bruce
\nWesterman Bill. It’s actually title four of Westermann Bill. But let’s just take the hospital piece specifically.
\nSo kind of like what we’re talking about before. The hospital lobby is very powerful
\nin every congressional district in America. The hospital sector is the second largest employer just behind
\nthe public schools. And they say that if you if you ask us to if you
\nspend less money on us, then we’re gonna close. Then you’re not can have a hospital in your district. And every congressman shakes
\nwith fear that this could happen to them. They get blamed for it. So so the hospital lobby is very powerful.
\nSo I you know, when this congressman told me, Jim Banks, he’s like, I want to work on a hospital bill with you. Let’s let’s do this together,
\nbecause you’ve got some ideas I like in there. And I said, well, you know, Congressman, just so you know,
\nthis is gonna be the hospital lobby is gonna fight you hard on this. And the year all the things are going to argue and they’re going to
\nassert and they’re going to claim and they’re going to say that you’re a really terrible guy. And he said, look,
\nyou know, there are more constituents in my district and there are hospital executives.
\nAnd I’m I’m here to serve them. And I think you’re seeing more and more of that attitude
\nthat for the average congressman, they’re hearing so many stories from their constituents,
\nfrom their voters about how people are struggling to afford their health care bills, how they’ve been laid low,
\nhow their entire economic future is being curtailed by the high cost of health
\ncare. That these handful of campaign contributions or lobbyists
\nor whatever it is from the industry are just not enough to outweigh that overwhelming
\nneed to serve your constituents and solve this problem. And so I think we’re close to
\na tipping point in that regard. If we aren’t already over it, which is to say that it used to be that only
\npeople on the left really cared about health care costs. People on the right would get defensive and say, no, everything’s fine.
\nWe don’t want price controls. We don’t want a government run system. And what we’ve tried to do it free up is to say
\nno, actually, that’s a false dichotomy. There is not you know, the only it’s not that the
\nonly two choices are not price controls, government run single payer versus the status
\nquo. There is a third option, which is actually a market based system in which people
\nactually control those health called care dollars for themselves, where it’s affordable for everybody, where people
\nhave the choice of multiple suppliers of any product or service, and where there’s more personal
\na more personal touch and a more a more service oriented culture to our health
\ncare system instead of a bureaucratic oriented culture. Well, Rick, thanks for. Work and
\nthanks for joining us at Policy McCombs. Hey, I appreciate it. Thanks for all you do.
\nBefore we wrap up, you can get more information in our medium page. Thanks for listening to Policy
\nMcCombs. See you next time.<\/p>\n"},"episode_featured_image":false,"episode_player_image":"https:\/\/podcasts.la.utexas.edu\/cepa\/wp-content\/uploads\/sites\/21\/2021\/05\/SC_PolicyMcCombs_Art-scaled.jpg","download_link":"https:\/\/podcasts.la.utexas.edu\/cepa\/podcast-download\/14\/policymccombs-avik-roy.mp3","player_link":"https:\/\/podcasts.la.utexas.edu\/cepa\/podcast-player\/14\/policymccombs-avik-roy.mp3","audio_player":null,"episode_data":{"playerMode":"light","subscribeUrls":{"apple_podcasts":{"key":"apple_podcasts","url":"","label":"Apple Podcasts","class":"apple_podcasts","icon":"apple-podcasts.png"},"google_play":{"key":"google_play","url":"","label":"Google Play","class":"google_play","icon":"google-play.png"},"google_podcasts":{"key":"google_podcasts","url":"","label":"Google Podcasts","class":"google_podcasts","icon":"google-podcasts.png"},"spotify":{"key":"spotify","url":"","label":"Spotify","class":"spotify","icon":"spotify.png"},"itunes":{"key":"itunes","url":"","label":"iTunes","class":"itunes","icon":"itunes.png"}},"rssFeedUrl":"https:\/\/podcasts.la.utexas.edu\/cepa\/feed\/podcast\/policymccombs","embedCode":"Avik Roy on the Conservative Case for Universal Health Coverage<\/a><\/blockquote>