Charles Silver, University of Texas at Austin School of Law – Put Consumers in Charge of Health Care

The Academic Minute

There are many nightmare stories about dealing with the healthcare system in the U.S.; so how do we change it?

Charles Silver, Roy W. and Eugenia C. McDonald endowed chair in civil procedure at the University of Texas at Austin School of Law, suggests a solution.

Charles Silver teaches courses on civil procedure, health law, and professional responsibility. His current research focuses on aggregate lawsuits, attorneys’ fees, professional responsibility, and health care law and policy. He previously worked with a group of empirical researchers on studies of medical malpractice litigation in Texas for over a decade. Professor Silver has authored several publications, including his most recent books “Medical Malpractice Litigation: How It Works, What It Does, And Why Tort Reform Hasn’t Helped” and “Overcharged: Why Americans Pay Too Much for Health Care.”

Put Consumers in Charge of Health Care

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America’s health care system costs too much, delivers too little, and can be a nightmare for patients.

These problems exist because Medicare, Medicaid, and private insurers pay patients’ bills, and their interests differ greatly from those of consumers.

The solution is to put consumers in charge. To accomplish that, my research indicates that Medicare and Medicaid should work like Social Security does. They should give people money and let them decide how to spend it.

This change would convert 149 million Medicare and Medicaid recipients into an army of price- and quality-conscious consumers with $1.8 trillion to spend.

The effects would be immediate and hugely beneficial.

Providers would advertise their prices instead of hiding them, and they’d compete on both price and quality, neither of which they currently do.

Surprise bills and phony charges, like facility fees, would vanish.

Prior authorization requirements would disappear.

So would fraud, which costs Medicare and Medicaid hundreds of billions of dollars a year. Consumers spending their own money won’t pay phony bills.

Honest health care providers would benefit too. They could charge market rates and be paid for services immediately, just like other businesses.

Inefficient providers—those whose services don’t work or cost more than they are worth—will be unhappy. They’ll have to do better or close their doors.

If we give consumers control of the dollars that pay providers’ bills, the American health care system will quickly become more consumer-friendly. If we don’t, we’ll have to put up with the existing, consumer-hostile system indefinitely.

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