There is a lot of talk about the need for bipartisanship in Washington. I think health care reform would be a good place to start.
One of the most important issues facing the United States is its underperforming health care sector. There are three major problems. First, it costs too much. For the past three decades health care spending per person has grown roughly 2 percentage points faster every year than income per capita. That is, in the horse race between costs and resources, costs have been winning. The result is that health care spending right now exceeds 17 cents of every national dollar – and will rise to 20 percent by the end of the next decade. Within the federal budget, the rising cost of Medicare and Medicaid threatens a tsunami of red ink in the decades to come.
Second, because health care is getting more expensive, the cost of health insurance is skyrocketing. Over the last decade, insurance costs have increased by 120 percent – three times the growth of inflation and four times the growth of wages. With higher costs has come reduced insurance coverage – more than 45 million are uninsured. It is important to solve the first problem – rising costs – before committing to large-scale coverage expansions. Doing them in the wrong order will be prohibitively expensive, and likely cause the reform effort to unwind.
Finally, both the health insurance and health care systems under-perform. A job loss typically also means loss of health insurance. High spending has not yielded comparably high outcomes for infant mortality, longevity, or treatment of chronic disease.
In short, we really need reform.
We are also likely to get some action on reform. Among Democrats, there is a clear sentiment favoring reforms and a strong desire to deliver a crowning legislative triumph to Senator Kennedy. Interestingly, there is just as much desire for reform on the Republican side of the aisle. In the most recent Presidential race, every Republican candidate was compelled to deliver a health reform platform during the primary, and health care remained a leading domestic issue until high oil prices and financial market collapse drove their way to the top of the polling. So, there is a shared interest in reform.
There is also some bipartisan agreement on the outlines of reform. Democrats and Republicans alike agree that the delivery system must be reshaped to take better advantage of preventive care, the efficient treatment of chronic diseases, and to reward coordination of care across providers. Some areas of strong disagreement persist – notably the government’s role in providing insurance coverage – but there is at least a toehold for bipartisan work to start from.
Democrats could take some steps to improve the chance of a comprehensive, bi-partisan reform. Things got off on the wrong foot when the SCHIP bill was rammed through Congress on a purely Democratic basis. And it was disappointing to see the inclusion of big pieces of health care reform in the so-called “stimulus” bill. Large new government programs for insurance coverage like Medicaid expansions and COBRA subsidies, and important health information technology initiatives have nothing to do with stimulus (and as noted above, if not paired with delivery reforms will likely backfire). They properly belong as part of comprehensive health care reform. Democrats should have agreed to set these aside in conference in exchange for a full debate on their merits in health reform. Republicans could have reciprocated by actively engaging in the reform debate.
Americans seemingly want to see an end to partisan bickering and one-party legislating. They definitely want health care reform. Putting the two together is an opportunity.
9 responses so far
1 dstern // Feb 13, 2009 at 12:38 am
As you say the essential problem with health care is its cost. The Democrats solution to this problem is not necessarily to reduce the cost of health care, but rather to reduce the cost of health care to more than 50% of the voters so that they are inclined to vote for Democrats in future elections. The plan to do this requires a governmental take over of the health care system, i.e.socialized medicine, so that the government can: 1) Shift the cost of health care to upper income individuals who only form a minority and as such cannot outvote the redistributionist desires of the majority, and 2) Reduce the cost of the system by exerting the governments monopolistic ability to simply reduce reimbursement for medical supplies and services. This solution, by definition, is popular and will work, at least initially. Unfortunately, socialized medicine is not consistent with the principles of liberty and capitalism; thus, ultimately it will fail.
With respect to capitalism, it will fail because there are no proposals by the Democrats to limit the demand side of medical care. Given that there is essentially an unlimited amount of health care any single individual can have and the fact that the Democrats proposal has no limits on the amount of demand total demand will continue to rise. Secondly, a government-monopoly-produced reduction in reimbursement will ultimately will result in a greater shortage of services and supplies since there is less financial incentive to participate as a provider in the system. I am not an economist, however I have heard that more demand and less supply is not associated with lower costs.
With respect to liberty, socialized medicine will fail because it burdens the more highly productive, wealthier, individuals of society with the financial burdens of their less productive brethren which in turn reduces their productivity. As these more productive individuals become further weakened by the burden of the majority they can only become less productive and less in number, while in turn the number of those who are dependent upon them grow. It is not a sustainable system.
I dont know about you, but I dont think I want to be associated with this type of solution.
2 nealjking // Feb 13, 2009 at 2:02 am
Other countries have developed systems that work better than the US’s: Canada, UK, France, Germany. They control costs better, they provide universal access, and people do not live in fear of losing their jobs because of the healthcare insurance issue.
All of them also have components that depend on governmental management. Maybe we can learn something from them!
3 dstern // Feb 13, 2009 at 7:34 am
I believe that you are right in stating that the money spent per capita on health care is lower in other countries; however, I am not sure that you have demonstrated that better health care is provided at lower cost. Two key differences between fully socialized health care programs and that of the US are that the people of these countries are willing to deal with limited access to and limited amounts of health care (especially regarding end of life care and more expensive therapies like dialysis and transplants). This is where the key difference in systems lie. In our system, health care expenditures are limited by whether or not you have insurance, in other countries it is limited by government restrictions. Pick your poison. Health care is not cheaper per se in these countries because of some magic formula. Now we have the Democratic plan which proposes universal access and no overt limitations on the extent or availability of medical services. It will truly be the worst of both worlds from a financial point of view. There is no free lunch.
4 gblittle // Feb 13, 2009 at 8:19 am
Reforming healthcare should not be left up to politicians, either party. It is way too complex in other words if you want to really screw up the current system we should all be very wary of political designs. That does not mean however the overall system, related costs and coverage cannot be improved. I equate universal healthcare, as something Democrats want, as an all you can eat buffet. The price is the same for all, some individuals pig-out (abuse the system), some use it as designed and other eat like birds. You typically wait in line, you may have to wait around because one item is gone, and the overall quality is rather dreadful. Universal healthcare is not much different. There is no free lunch. And to nealjking, I have employees in Canada, UK and Germany — there system is not all that great, especially in the UK. My Canadian employee has shoulder surgery done here in the states and his wife breast cancer was too taken care of here, not Canada.
5 fact based // Feb 13, 2009 at 1:21 pm
as McCains advisor you advocated the view that the private market could provide health insurance.
I am self employed a former mayor of NYC in my 60s with a history of prostate cancer.
Could you refer me to a private insurer that will give me coverage at a reasonable price if at all ?
also same for someone in their early 70s with a history melanoma
I’m also amazed that you all talk of socialized medicing when obama has specifically said that people happy with their current insurance can keep it.
I’m also amazed that you folk write that under our insurance system people can make their own decisions on healthcare…..please forward the name of YOUR insurance company because mine must pre approve all but routine care. Insurance companies are in the business of denying claims and coverage and trying to insure those unlikely to make claims that’s how they make money.
simple economics and morality
health is distributed randomly
distributing healthcare based on wealth is immoral
it’s called a market failure there is no market price at which a profit making insurer would insure someone that has had a heart attack or a breast removed.
6 sinz54 // Feb 13, 2009 at 2:27 pm
McCain’s health care plan called for Americans to be able to purchase health care plans offered in other states, in hopes that competition would lower costs. What McCain forgot was that today, most health care plans are “managed care,” in which the plan comes with a network of preferred providers in that region of the country. Try to see a provider outside that network, and the insurer will either deny the claim or at least force you to pay a much higher copayment. For example, all of the doctors in Massachusetts’ Harvard-Pilgrim network are all in New England. How does that help someone living in, say, Ohio or New Mexico? They can’t easily go to any of the doctors in New England. So they have no reason to consider purchasing Harvard-Pilgrim insurance. McCain didn’t even seem to realize that this was a problem.
7 sinz54 // Feb 13, 2009 at 2:29 pm
fact based: McCain was aware of the pre-existing condition problem. He never quite figured it out, but he hinted at each state having a high-risk pool similar to the high-risk auto insurance pool for drivers with bad driving records. And yes, that high-risk pool would need to be subsidized.
8 sinz54 // Feb 13, 2009 at 2:35 pm
I favor the new Massachusetts health care system, signed into law by Governor Mitt Romney. It depends mostly on private insurance, but it expands the pool of insured by three methods: 1. A mandate–every Massachusetts citizen must get health insurance–from a private insurer if at all possible. 2. No insurer can turn down an applicant for a pre-existing condition. (And so, insurers have even stopped asking about pre-existing conditions on the application forms.) 3. For those who cannot afford insurance at any price, there are subsidies and a program run by the Commonwealth to provide last-resort insurance. That state-run insurance program is heavily means-tested; you really have to be poor to qualify for it. So far, “RomneyCare” is working, and it’s a relatively simple program to administer. Yes, health care costs are still rising, but they’re rising everywhere else too. Incredibly, when Romney ran for President, he had to run away from his own health care initiative–his signature achievement in Massachusetts–because the free-market purists in the GOP got hysterical at the thought of “mandating” health insurance. Someone should have reminded them that it is mandatory to have automobile insurance to drive on an Interstate highway. I tried to remind them myself, but all I got was the usual blank stare when you present an ideologue with inconvenient facts.
9 dstern // Feb 15, 2009 at 10:43 pm
The controversy over health care policy reflects the epic philosophical battle between individual freedoms and social obligations; are we our brothers keeper? My understanding was that this country was principally founded to protect our individual liberties or rights. One of the most important rights was the right to property. The institution of socialized medicine is not consistent with this right since it uses the authority of government to take property (aka stealing) from one individual (unwillingly if necessary) and give it to another for his benefit. Stealing, no matter what the rationale, is never ethically correct; thus the government should not be involved in the provision of healthcare. Indeed, it has been the intrusion of government and the legal system into the health care business which accounts for the high cost of medical care today. To illustrate this point I will tell you the story of my dog Blue. Blue had a bad fall and broke his hip. He required extensive surgery and hospitalization which included the placement of a rod in his femur, anesthesia, X-rays, 3 days hospitalization, antibiotics, pain medicine and follow up visits. Amazingly, Blue, after 4 months, is back to normal and is running down rabbits successfully again. Even more incredible, was that Blues care was provided for a total price of less than $1,000.00. The same care for a human would be close to $20,000.00 even though the essence of the care and services rendered would be little different, so why the difference in cost? Without going in to details, the difference is generated by the insurance system (which is promoted if not operated by the government) and the legal system (which generates huge numbers of regulations and makes the practice of medicine defensive). Eliminate these two forces and you will restore financial sanity to the medical system.
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