Universal Coverage: Treat Healthcare Like Other Commodities

Tens of millions of Americans lack health insurance. Extending coverage to them has been a core goal of health reform proposals since the 1960s. President Richard Nixon offered a universal health plan in his first administration, but since then Republicans have hesitated to commit the nation to so costly an undertaking. Is it time to rethink? Should Republicans accept universal coverage as a goal?  We posed this question to NewMajority’s contributors.

As someone who has lived with a physical disability for my entire life, and know other people like this (mainly from the special public school that I went to in Toronto for children with disabilities) I thought that I might have a unique perspective to offer.

Let me begin with a few general comments that I’ve gleaned from my reading and experience with healthcare systems both in Canada and in the United States.

While advocates of greater government intervention in healthcare say that healthcare should not be treated like an economic commodity, healthcare is an economic commodity because of nature, and not because of any policy. Because the demand for any commodity usually outstrips supply over the long-run, rationing is inevitable. The real question in the current debate is who does the rationing: government, insurance companies, consumers of healthcare, or someone else.

Monopolies are inherently bad for consumers. The lives of the people I know with severe disabilities demonstrate this. Unless they are independently wealthy, they live either in nursing homes, or in government subsidized housing, with government subsidized attendant care. They travel (in Toronto’s case) in government subsidized accessible vehicles (Wheel-Trans). This by necessity limits their choices and the control that they have over their own lives. For instance, it limits where they live. They have no control over the attendants who take care of them. The attendants are hired by the housing project in which they live. Invariably, they are low-skilled and low-wage workers. Their lives are, in many ways, controlled by those who provide them with life-essential services. For instance, when they get up, go to sleep, and eat is determined by the scheduling of attendants. Travel must be scheduled in advance with the booking of a ride on a government-subsidized van. There is no guarantee, even with advance booking, that transportation would be available at the precise time that the disabled person needs it.

I have always thought that the money that government uses to subsidize services (such as housing projects, attendant care, and accessible transportation) would be better used being put into the hands of the disabled consumers. Would giving disabled persons more purchasing power create a market for services that disabled people use? Might it create, for instance, an incentive for private developers to build apartments that are accessible, and compete for disabled consumers by the quality of the attendant care they offer? Or, alternatively might the extra income enable persons with disabilities to hire or fire the extra help that they needed? In transportation, raising the income of disabled persons might create a demand for private van services. (These now exist but the prices of rides are so high, that it is impossible for disabled persons to use them regularly.) Would greater demand introduce more price competition into the “private van” industry? Might it even enable a disabled person to purchase an accessible vehicle, possibly even with hand controls for persons who cannot use their legs, or hire a driver when they needed to travel?

I have always thought it would be better for government money to be moved from providing services for persons with disabilities to direct payments to consumers with disabilities. This rational for such subsidies is that at a given level of income, a person with a disability is poorer than an able-bodied person, simply because being disabled raises someone’s cost of living. The size of the income would be linked to the severity of disability (e.g. a quadriplegic would receive more than a paraplegic) because one’s cost of living rises with the severity of disability. I admit to having no idea of the fiscal implications in this change in the way government assists people with disabilities.

If this is a good idea, is it applicable to the provision of healthcare in general? It is somewhat deceptive for Republicans to claim that a government insurance plan would interfere in decisions that should be made only by patients. Private companies that provide insurance plans for employers already interfere in such decisions.I agree with Charles Krauthammer who argued in his column a few weeks ago that responsibility for the provision of health insurance should be taken out of the hands of employers and given to individuals. Wages of course would be increased to compensate for the loss of this benefit. With individuals buying their own insurance, the portability problem would be solved. With consumers of healthcare rather than employers buying insurance, competition would force insurance companies to devise plans that are more responsive to the needs and preferences of the consumers of healthcare. Low income individuals or families might still not be able to afford health insurance. This is where, and only where, government should become involved in healthcare, providing people cash subsidies to purchase healthcare. As with the disability subsidies that I recommended, government subsidies should be larger to individuals who have serious chronic illness, pre-existing conditions, or catastrophic illness.

To read other contributions to this symposium, click here.