David Cutler is a Harvard economist who was involved in the failed Clinton Administration initiative in the early 1990’s to reform America’s health care finance system. This NY Times Sunday Magazine article examines Professor Cutler’s evolving views on health care finance reform, and a number of them are quite interesting:

Cutler’s approach is radically different. He says that most health-care spending is actually good. Spending has been rising, he says, because it delivers positive, and measurable, economic value, and because it can do more things that Americans want. Therefore, Cutler says, we should focus on improving the quality of care rather than on reducing our consumption of it. Rather than pay less, he wants to pay more wisely — to encourage health-care providers to do more of what they should and less of what is wasteful.

A tweedy, self-effacing 39-year-old, Cutler is a seriously modified lefty. He envisions a system in which everyone could get insurance while free-market incentives would motivate health-care providers to be more effective as well as more efficient. Instead of suppressing the market by rationing care, restraining prices or regulating doctors, he wants to liberate it. It is neither Clinton nor Bush — but closer to Bill Bradley, whose 2000 campaign Cutler advised.

To make coverage universal, Cutler advocates a $6,000 credit for poor families (and less, on a sliding scale, for others, tapering off to a small credit for people earning $50,000 and up). The credits would be redeemable as a sort of health-insurance voucher. Significantly, Cutler would extend credits to everyone — even to people who are covered now. Many employers, for competitive reasons, would still offer coverage, but access to care would no longer depend on either employment status or age.

The problem is that most health care finance policy wonks believe that health care spending is “out of control” and, thus, Professor Cutler’s approach would make that spiral worse. However, the wonk solution — a single payor government system — simply creates even worse problems. Professor Cutler’s focus on the qualitative side of the problems is refreshing and merits serious consideration.
Finally, note that Professor Cutler’s ideas are similar in several ways to the ideas addressed in this previous post on business theorist Michael Porter‘s views on reforming the health care finance system.