A Conservative Take on Health Care Reform
I’ve told this story a few times, but I will tell it again:
In November of 1996, I fell ill. It started as a flu which became pnuemonia and then a massive infection. The end result was that I was in the hospital for two weeks as they tried to get the infection under control.
At the time, I didn’t have health insurance. I was 27 and working for a coffee chain that did provide health care, but when you are working for 6 bucks an hour, paying what seemed to be a large amount for health care seemed out of the question.
What I did have was a plucky nurse practictioner. I was going to a local clinic that worked with low-income communities worked on a sliding fee. The nurse practioner was saw that a I had an astronomical white blood cell count (which means I was fighting the mother of all infections) and decided I needed to be admitted to the hospital. My first thought was how I was going to pay for it. Not to worry, she said, a way would be found.
And a way was found. She was able to get me in contact the Minnesota Department of Human Services and was able to get Medicaid, the federal program for the poor, to pay for a chunk of my hospital stay. I could recover knowing that this was taken care of.
Even though as a Republican, I wince when people start talking about single-payer health care, my illness and how it was paid for taught me two things- that health care is an important issue and that government has to have some role.
The fact is, we (meaning Republicans) need to think seriously about reforming our health care system. Too often though, conservatives have tended to put their heads in the sand on this issue, talking about how we have the best system on earth and about fears of socialized medicine. But ignoring the problem is not an answer. As more and more Americans lose their jobs or see their premiums rise, they are looking for answers and if the GOP doesn’t have an answer, they will go to the people who have one-namely the left with its single-payer system.
So, Republicans need to come up with solutions. What are the options?
Jurgen Reinhoudt gives a fairly good rundown of several health care systems in Europe that might give conservatives ideas on how to reform our system. Contrary to popular opinion, not all Euro-health care is single-payer; some use a mixture of private and public incentives to achieve universal health care. It’s well worth the read, but I will jump ahead and tell you that the system he favors (as do I) is the Swiss health care system. That system is somewhat similar to what has been done in Massachusetts (which former Massachusetts Governor Mitt Romney, forgot to talk about in his Presidential campaign) in that the health care is more consumer-driven than what we have.
We come, then, to the Swiss system. It is a system that deserves the attention of every American interested in market-based health reform. Regina Herzlinger, McPherson Professor of Business Administration at Harvard and the “godmother of consumer-driven healthcare”, wrote in late 2008:
“The country of Switzerland has universal coverage, costs that are 40% lower than ours and that inflate at lower rates, and an excellent health care system in terms of outcomes and resources. The key to their success is that the Swiss system is consumer-driven: consumers buy their own health insurance from more than 90 private health insurance firms. If they cannot afford it, the cantons subsidize it. If they are sick, they pay no more for their health insurance than the well (the Swiss insurers risk-adjust each other). Consumer oversight insures value for the money better than oversight by governments and employers.”
For conservatives, who generally favor market-driven solutions, the Swiss system has achieved a great deal on the demand side, by placing the consumer front and center and getting employers out of the way. Whereas in the U.S., health insurance is commonly tied to employers, and whereas many Americans find it unaffordable to purchase individual health insurance policies (in part due to heavy state regulations), in Switzerland the whole health insurance market revolves around individual insurance policies. Swiss citizens can choose from one of hundreds of reasonably priced, competing insurance plans from dozens of competing health insurers. They may choose a high-deductible plan, a low-deductible plan, or an HMO plan.
In a way, health care is purchased in Switzerland like we purchase auto insurance in the US. People have to buy an isurance plan and if they are not able to afford one, then the state steps in with a subsidy.
Reinhoudt thinks there are drawbacks, namely regulation that requires a basic benefits package and lack of information on doctors and clincs vis a vis performance. While one can frown on regulation (and I do), I think there has to be some regulation in order to help control cost and ensure coverage. I do consider health care to be a business, but in someways it isn’t like buying say, auto insurance, but somewhat like a public utility like light and gas. There are publicly traded companies that are providing light and keeping us warm, but they are subject to certain regulations because they are vital to human life. Same goes for health care; it can be a business and it should be, but it is also a common good vital for human life and cant’ be totally subjected to the whims of the marketplace.
That said, this was a worthy article and I hope more Republicans read it. We have to come up with a conservative solution to health care or else get ready for single-payer, US-style.
6 Responses to “A Conservative Take on Health Care Reform”
My preference has been for the creation of a non-profit, government subsidized corporation that provides services/coverage for a sliding fee scale depending on income. Anyone at all can choose to have their coverage go through this organization no matter what their income or employment status. This avoids hassles when changing jobs or losing jobs. Employers can choose to subsidize even this expense for employees with no tax penalty to either employee or employer. Yes, they can negotiate with drug companies just like any private insurer. Consolidate all other government health care programs into this system. Eliminate the state role in Medicaid, which they can't afford anyway.
No, Dennis, I can't agree with you that keeping the system dominated exclusively by publicly held companies would be a good idea. One thing that must be recognized is the differences between someplace like Switzerland and the U.S. I think it comes down to culture. Where are the Swiss versions of Enron and all of the other corporate scandals of the U.S. private sector? Are their levels of executive and board compensation anything similar to ours? The more I see of how things are going with Wall Street I think there is a very basic problem with our system of publicly held companies. And leaving that system in charge of our citizen's health care seems like a bad idea.
[...] (Hat tip: DS) [...]
Here's the thing I don't understand. The system you described–”people have to buy an insurance plan and if they are not able to afford one, then the state steps in with a subsidy”–sounds very similar to what Obama was proposing during the campaign and what will likely come out of Congress. No one has proposed single payer recently, and even Democrats will tell you that it isn't feasible anytime soon. So why keep battling that straw man? Do conservatives just not want to give Democrats the credit? Or is this a case, as you said, of people putting their heads in the sand?
The problem with the subsidy idea is that it closely resembles the first phase of the TARP bailout where you have money shoveled into private corporations with absolutely no accountability or effort to make those corporations work better to provide a vital service. My prediction is that if you just subsidize the existing system you'll just see executive salaries and bonuses at insurance companies go up while actual health care continues to decline.
I doubt that this administration will simply throw un-regulated money at the problem the way the Republicans have done. Rather I think that they will do two things: Simplify the administrative aspect of healthcare insurance which will cut costs considerably and have a mix of governmental and private companies that offer various plans that are not tied to employment.
A significant portion of health insurance now is self-insurance plans that are administered by outside organinzations. When a company switches plans, it really only switches the administration from one set of providers/administrators to another. The money still comes from the companies.
As a result, healthcare is an important cost of business and it puts US business at a disadvantage in the global market. The trick will be to find a way to get around all the regulation/de-regulation (which has a lot of regulation on its own) problems that have caused the cost of administration to sky-rocket and to free the businesses that want to be freed from the burden of health care costs.
As businesses cut costs, their employees lose because in this economic environment significant savings can be had by not offering insurance, especially if employees are unable to find other jobs. This leaves a lot of earners in the lurch if a medical problem occurs. Businesses have the choice of to insure or not to insure. I don't think that most of us want our health care to be a business decision, but right now it is for a lot of us.
The politics of this kind of move will be massive and the lobbyists will have a field day (Daschle will make much more money!) until the situation becomes so bad that even the Republicans will see the advantages of setting our businesses free from this burden. The issues of state autonomy and regulation will have to be solved and the specter of a two tier (or twenty tier) health care system will have to be addressed. This will be a difficult if not impossible undertaking, but it has to be done.
Health care is 17% (or whatever the latest figure is) of our GDP which means that there is a lot of money out there to be made by someone unless there are good workable regulations to deter the crooks. And the crooks have been at it since about 1975, they have a lot of experience at gaming the system and taking over the system. (Just ask the Frist family.)
Our present schemes of Medicare and Medicaid have some advantages (a single short paperwork trail is very possible, for example) but are far from perfect for a variety of reasons in this regard. They will most likely be the starting point of any set of rules.
In a country as large as ours with so many factions and critical masses of interest groups, there will not be a simple straight forward answer to a question that is so vital to our economic future (not to mention the moral and public health issues driving this debate.) There will have to be a lot of give and take but what is happening in Congress right now is any indication, it will be a long process with only moderate results. No one plan will fit all no matter how successful it is in a smaller Western country.
But we can look at other schemes and see what works. Our advantages are that we have a superb medical establishment that has made a significant difference in health care (I know there those who will dispute this but that is for another forum), a large pool of participants to spread out costs, and a fairly decent infrastructure of hospitals, clinics, etc. Whatever happens will change this, no question, but medicine has changed significantly in the past 30 years and will continue to change no matter what we do.
The answers will have to be worked out now that we have someone in the President's office wwho is willing to try and not just put band-aids on every thing or just want to help their buddies out with large amounts of money and not worry about the consequences. I know that none of the pie in the sky stuff will ever come true (universal health care for very little money, total access for all, etc.) but we can come closer than we are now.
“I think it comes down to culture. Where are the Swiss versions of Enron and all of the other corporate scandals of the U.S. private sector?”
Uh, UBS? And is the Swiss corporate intransigence on Holocaust survivors and tax evasion such an advertisement for their corporate culture? This “small-European-countries-have-a-better-model” point of view would, I should also note, also have supported the idea of Iceland's banking model being ideal. Before it imploded, that is.
The problem, Jim, is that it's a serious structural flaw to tie prosperity directly to votes, as we've seen in the looming bankruptcy of social security. It's like a populist version of corporations using their power to acquire more power. People will always vote themselves more benefits, which provides a serious disincentive for politicians to do the wise thing and stand up for unpopular positions like “we can't afford it.” (My home city, Philadelphia, has been struggling with the economic populism of union-catering politicians for decades, which simultaneously gives a bigger share of the pie to single-issue voters at the cost of shrinking the pie overall.) If we're going to do this, it cannot be as simple, structurally speaking, as you appear to me to be suggesting.