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BLOG: Support policies that reduce federal spending


Leaders must take off the blinders and see the need for private sector jobs


Have you noticed almost constant claims by many healthcare leaders or the heads of their trade associations that any and all federal government cutbacks in spending for healthcare or other social programs must be prevented at all costs? Really?

McPhersonWith a current federal government deficit of over $17 trillion and still growing-which doesn't even include future Medicare, Social Security and other unfunded liabilities of the same size or more-our economy and the value of our dollar are on the path to collapse. Whether our federal officials will admit it or not. Such a catastrophe would essentially move all of the remaining middle class to the ranks of the poor.

What is at stake here is America as we have known and loved it.

Healthcare leaders must not only reform healthcare delivery and payment systems but also support federal policies that both reduce federal spending and increase revenues in ways that stimulate private sector jobs. Stimulation of private sector jobs is critical to enabling people to achieve decent food, shelter and healthcare coverage and to meet other personal needs and wants, in a dignified, uplifting manner.

What public policy changes should healthcare leaders support in this regard? Here’s my personal list:

  • Approving the Keystone Pipeline and taking advantage of all of America's energy resources to make us energy independent;

  • Bringing home most of our soldiers and securing our own borders;

  • Reforming Medicare, Medicaid and the Affordable Care Act to reduce the rate of increase in federal spending for these programs;

  • Reforming the federal tax code for all Americans and private corporations by: simplifying rules; eliminating most special tax breaks; and establishing one or two tax rates for all individuals/ families and one tax rate for private companies;

  • Eliminating all regulations that unnecessarily impede the establishment and operation of  businesses-especially small businesses, which typically produce over 70% of the private jobs in the U.S.;

  • Providing parents with choices for their children's elementary and high secondary education; and

  • Eliminating or substantially down-sizing all federal departments and agencies that add little or no value to our society or that perform functions better left to the individual states.

NEXT: Societal needs >>



A the same time, we must not forget the unique roles that private philanthropy and the nonprofit sector have played in meeting healthcare and other societal needs that the public and for-profit sectors cannot. Stimulating and focusing their efforts will be even more important in the years and decades ahead. What public policy changes are needed in this regard?

Here again I have my list:

  • Providing an interest income-tax exemption for all individuals and private corporations providing philanthropic support-but only to nonprofit organizations that provide direct services to individuals (healthcare, healthcare coverage, food, shelter, etc.) or that conduct scientific research;

  • Providing federal-income tax exemption to only those nonprofit organizations that provide direct services to individuals or that conduct scientific research and that can demonstrate that the costs of the special benefits/subsidies they provide equal or exceed the monetary value of their federal income-tax exemption. This would include both nonprofit healthcare providers and nonprofit health plans.

For those healthcare leaders who would say that many or all of such public policy changes are beyond their purview, I strongly disagree. They can all directly or indirectly improve "population health" and save our country.


Bruce McPherson is president of the Alliance for Advancing Nonprofit Healthcare based in Washington, DC, a former executive with the American Hospital Association and the National Rehabilitation Hospital, and a former senior manager with the Blue Cross Association. These views are his own and not any official position of the Alliance.



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