Reducing
unnecessary regulations may help to the extent such regs are costly. Government regulating businesses that directly affect human life – food, drugs, health care, etc. – are necessary and expected by citizens in a free-market economy. Paradoxically, increasing some regulations such as tort reform to limit jury awards would lower health costs.
Increasing competition only reduces costs if the present providers either enjoy excess profits or use more resources than necessary. In an industry where future revenues are most likely seen to be falling and existing providers are already exiting is not an industry likely to attract new entries.
Innovation, like reducing fraud and waste, is always a possible cost cutter but cannot be predicted and, therefore, is a poor planning tool. Efforts to innovate in themselves add costs now in which hard pressed providers with thin margins are unlikely to invest in the hope of lowering costs in the future. For instance, the mandated digitizing of health records did not go as planned. See
chicagotribune.com/news/opinion/commentary/ct-obama-doctors-ehr-records-medicare-perspec-0529-20150528-story.html.
The old “doctor plumber” joke may come true.
*A pipe burst in a doctor’s house. He called a plumber. The plumber arrived, unpacked his tools, did mysterious plumber-type things for a while, and handed the doctor a bill for $600.
The doctor exclaimed, “This is ridiculous! I don’t even make that much as a doctor!.”
The plumber quietly answered, “Neither did I when I was a doctor.”*