John C. Goodman, Invaluable Conservative Free Market Economist
Last week I had the pleasure of attending a lecture on current health care economics and policy issues by economist Dr. John C. Goodman, (PhD Columbia), a legendary figure in conservative circles. Dr. Goodman first impressed me 30 plus years ago when he appeared on the scene as a celebrated and increasingly respected advocate of free market, not government, health care financing and sensible health care policy advocacy. He has enjoyed recognition and success from that time until today, providing sensible counsel on the economics of welfare programs—of course including healthcare welfare programs. There are 15 Republican physicians in congress, a much larger number than the 3 Democrat physicians. I will leave it to the reader to consider why.
Dr. Goodman has cut a wide and deep swath in the field of public welfare program policy economics. In 1980 he published a study of the British National Health Service and followed up with a 150 year study on efforts by organized medicine to protect the guild. In his career he has published more than 15 books and 50 studies on a wide variety of public policy/political/healthcare issues from welfare programs to government sponsored insurance all the way to school choice. In all cases Dr. Goodman focuses on sensible public policy that makes economic and policy sense rather than projects that pander to misguided political agendas. Dr. Goodman, to this day, briefs and educates political leaders on matters of economic and welfare policy and supports his positions with cogent arguments and theories backed by solid research evidence.
In 1983 Dr. Goodman founded the National Center for Policy Analysis and engaged the issues with sensible alternatives to government financed healthcare and welfare programs generally, to include insurance public assistance for varied risks. Dr. Goodman assessed public welfare programs and the problems that were created by Medicare and Medicaid and the misguided development of expanded managed care in the 1980s (HMOs). He asserted that public health insurance programs always fall victim to the problem of the healthcare insurance death spiral—adverse selection, fixed premiums with no actuarial basis and expanding utilization of an unrestrained population with no limits to their demands. Goodman pushes, invariably for programs that provide incentives and discourage “free riders” and give people “skin in the game.”
For decades until the present Dr. Goodman has participated in public and private forums debating the issues. He had many appearances on Firing Line with William F. Buckley and a series of TV debates with 3 partners including William F. Buckley arrayed against 4 leftist commentators that ranged far and wide on political and economic issues. Throughout his career Dr. Goodman has contributed to the public debates about many public issues, from School Choice to the flat tax—he is not a one trick pony.
Goodman formulated the Impossibility Theorem that is based on human behavior that makes well intentioned welfare programs predictably flawed in a political system where there are conflicting group attitudes about desired benefits and accepted costs. He has always been ahead of the curve in offering private sector and public policy solutions that avoid the problems of bureaucratic socialist government programs and what he describes as the “free rider” problem. Holding down costs in the face of demand that is unrestrained always creates a form of death spiral that makes government welfare programs a long-term untenable idea unless harsh price and utilization controls are implemented.
Dr. Goodman has never fallen down from his high perch as an analyst and remarkably insightful advocate for free market solutions to our community and national healthcare and other social welfare needs. He was instrumental in killing the Medicare Catastrophic Care proposal and stopping the “Hillarycare,” the socialized medical care for all project in the early 90s. He pushed tax credits (a much greater incentive than tax deductions) for medical and health expenses, Health Savings Accounts and Roth IRAs, expanding Social Security benefits to those who continue to work, and 401 K plans for employees that diversifies portfolios and provides more secure investment and returns. In all things Goodman has energetically promoted consumer/citizen welfare and greater security by enabling laws wisely chosen.
Dr. Goodman’s books include:
- Patient Power (Cato Institute, 1983), emphasizing patient participation and choice availability that create better decisions,
- Priceless: Curing the Healthcare Crisis (Independent Institute, 2012), emphasizing the intangible and complex nature of the healthcare system that requires sensible pricing of risk and recognition of the adage there is no free lunch, nature of healthcare financing and economics is not just about supply and demand economics and
- New Way to Care: Social Protections that Put Families First (Independent Institute 2021), that addresses the urgent demand that we assess safety net and welfare programs so that they are structured to be sustainable and sensible for addressing the various risks people face—illness, loss of a wage earner, disability, and inadequate retirement income. Goodman applies the tools of a scholar and policy expert in the thorough discussion on healthcare economics, welfare program and insurance, and healthcare financing and insurance policy making essentials.
I was interested in John Goodman’s work from his early days as a public policy doyen because I was attracted to -- and then disappointed with -- the 1970s magic cure for accessible, affordable care—managed care. I learned the hard way, first-hand as a physician/executive of HMO of Baton Rouge in 1981 and 82, so I paid attention to John Goodman’s alternative Health Insurance proposals that were articulated not long after. I became a steady and supportive fan of Goodman, who made sense of the hash that is public policy and particularly welfare program economics. Nothing is a better learning experience than trying to make a bad idea work and I still wanted to see a sensible and long range effective long-term healthcare and welfare strategy that would work and avoid the administrative state socialist default regime that was unsound economically and bound to be mediocre in performance and results. I hoped, still hope, to avoid the socialized medicine tyranny and mediocrity as exemplified by the British and Canadian systems.
Goodman was energetically opposed to Obamacare and proposed a replacement plan for Obamacare. The plan calls for a universal tax credit -- not just tax deduction --for health insurance, personal and portable health insurance for employees and a flexible Roth HSA that is not only better than Obamacare and would provide universal coverage.
Other areas of Advocacy
One of Goodman's major reform ideas is tax credits that shift incentives and financial burdens to reduce government program involvement and increase citizen choices for risk management and human services. Tax credits are a tremendous change in the incentive/burden equilibrium and favored by many across the spectrum of political ideology.
Goodman proposed the privatization of public programs at the federal/state and local level that Margaret Thatcher advocated.
He organized the first report card on public schools in the United States and flunked many based on performance of their students on standardized tests, resulting a growing campaign for vouchers to give parents a choice in education.
He provided the tax policy core promises of the Newt Gingrich 1994 “Contract with America” that resulted in a major upheaval in congressional election results. These ideas included the Roth IRA and allowing seniors to keep working beyond the retirement age without losing their Social Security benefits—ideas that later became law.
Goodman successfully worked on and advocated for reform of the 401(k) law so that employers could enroll employees in safer, more diversified investments.
Goodman's other contributions to public policy debates include tax credits, dollar for dollar for healthcare and school expenses, a progressive flat tax, reform of banking to assure 100% reserves for all credit transactions to prevent future meltdowns, privatizing Medicare, and enterprise programs to reduce regulatory and tax burdens for businesses that provide essential services to low income customers.
I am breathless just trying to capture the achievements of this extraordinary man and when I saw him 10 days ago, he looked good to continue his storied career and add to his many good works and accomplishments.
John Dale Dunn is a retired emergency physician and inactive attorney in Brownwood, Texas