An Effective Health Care Plan

Those of you who listen to the show know that for several weeks Bruno and I have been discussing why we believe that health care deserves to be the number one domestic policy issue in the coming presidential race.

As part of our series, we examined what we think a good and successful effort to reform the American health care system would involve. [For full detail, see the show in which we discussed our reasoning in depth.] Since Hillary Clinton finally announced the details of her plan, I thought it would be useful to list our points here.

A word of caution. It is possible to define a requirement for something before you really know how you’re going to accomplish it. For example, you can say “we’re going to put a man on the moon by the end of this decade” even if it’s uncertain if you’re going to build a rocket or fly there on the back of a mystical winged beast. Thus, you won’t find specifics in our requirements; we aim only to call to your attention what we think the hallmarks of a successful system will be. Of course, the devil is in the details … but we leave those to people far smarter than we are.

Also, it goes without saying that Bruno and I seek universal coverage of all Americans at the lowest possible cost. You’d know that if you’d listened to our first show on health care.

Finally, Bruno and I take a couple of things as given — e.g., there’s currently no magic bullet cure for cancer — but unlike most of the presidential candidates, we otherwise won’t let ourselves be constrained by certain “realities”. Like, so what if the insurance and pharma industries don’t like our ideas? [And if you’re actually a “leader”, why are you letting your funding sources dictate your policy prescriptions in the first place?] Sadly, even the Center for American Progress, an organization I generally admire, won’t let itself get too far away from the funding exigencies of modern campaigning in constructing its own policy proposals.

What Constitutes a Good Health Care Plan?

* Include choice — people are not forced to choose a certain doctor or plan.

Clinton learned to her peril in 1993 and 1994 that Americans will not tolerate any plan that does not give them some element of choice. PR considerations aside, it’s simply good practice to maintain some competitive elements in the system, and so that’s critical. However, consider the irony that all of the leading Democrats’ plans (and Mitt Romney’s) FORCE people to buy insurance. Methinks the pols are more concerned about voters’ worries over the burden of payment than they are with the true goal of universal coverage. In any case whether people are “forced” to buy insurance, or whether they pay a tax that funds their insurance coverage, the cost to consumers are about the same, albeit “forced” coverage is regressive.

* The doctor is the patient’s advocate in the system, not an agent of cost control

My own personal experiences with a particular HMO have convinced me that it’s critical to change doctor’s incentives in the system. One of those changes must be that the doctor has no responsibility other than a patient’s well being. If the doctor recommends an expensive treatment that the cost control authority (and there must be a cost control authority) denies a patient, well, that’s maybe not a great outcome, but at least the doctor is on the patient’s side. I think if you start to dive into people’s fears about single payer-type systems, at the core you’ll find some anxiety about how they’ll be treated within a massive bureaucracy, so this is critical to any system change — whether the final product is a single-payer system or not.

* The individual is responsible for his or her own health, and should be incentivized to take that responsibility

Too often, Americans tend to view health care as a solution to a discreet, digital problem. “I was healthy, now I’m sick, I’ll go to the doctor and I will be better.” Our payments system reflects this — doctors are generally paid for the number of procedures they perform, rather than being paid a salary, for example. But for any health care reform to be successful, that has to change, and the change needs to start with individual consumers. Health is a lifelong effort, a holistic process that touches on more than just your visits to a doctor’s office. Bruno and I believe that this change in attitudes can be incentivized. For example, say you’re overweight and you lose 20 pounds — you should get a lower premium. At the same time, individuals, even the poorest, must make some per use contribution to their health care costs, such as via a copay.

* Use market power to lower costs of meds and other supplies

Like, duh. Only the Worst President Ever could envision a system in which the largest buyer refuses to use its market power to negotiate lower costs. Econ 101.

* NOT employer-paid

It’s a ridiculous legacy of the American economy that we look at health care as something that should be paid by employers. It might have made sense in an era of wage controls, when non-wage benefits were the only way employers could compete for talent, and when the only real health care available was for things like workplace trauma and basic, easily treatable (or non-treatable) ailments. But as the range of health care services available has expanded, and as American business now competes globally with businesses in countries where health care is the responsibility of the government, it makes no sense whatsoever for employer-provision — effectively, an extremely inefficient payroll tax — to continue. Even if you needed to raise taxes to cover the costs currently taken on by employers, I am certain that the resulting benefits to the businesses would be superior. Likewise, the improved efficiency and reduced information asymmetry would only improve health care for individuals. Not to mention that health care would be a lot more portable, and individuals would not be forced to remain in particular jobs if we could get rid of employer funding. It’s very sad and troubling that no candidate has the courage or vision to propose this one simple change.

I wish I had some hope that any of this would come to pass in the near future. I guess the best we’re going to get is some expansion of Medicare and maybe a few more federal subsidies for the poorest. Ah, well. The system is so broken, it’s definitely better than nothing.