Back in September during the Presidential campaign (and early in OS’s post-beta life), I arrogantly and naively did a post which attempted to bridge a compromise on health care reform between me, a free market conservative, and folks here at OS who tend to be pseudo-socialist liberals.
The approach was to set-up some guiding principles that balanced the liberal desire for universal coverage with a conservative desire to avoid national risk and threats to personal freedom from nationalizing a huge portion of the economy.
I decided to revisit the principles that got created over those two days to see if they still made sense to me and (if so) to use them as a measuring stick for evaluating what Congress proposes. These are presented as originally written with only some grammar and spelling corrections. I have inserted new comments as updates.
For those liking multi-media affairs, here is some musical accompaniment from Iron Maiden: Blood Brothers from the 2001 album Brave New World (recommend to open in separate window so you don't have to stop reading)
Guiding Principles
1. As Americans, we recognize that individual needs vary and that choice is the best way to empower the individual against institutions. Therefore, the healthcare plan will not be a single, nationalized structure.
Bumpersticker version...One size does not fit all.
New comment: This is a huge point of contention. My argument for this continues to be that a large, centralized healthcare structure will severely reduce choice (e.g. no alternative medicine for the old hippies) and create another “too big too fail” institution that can be dangerous to our nation.
2. As Americans, we value choice. But, we also value responsibility. Whoever is making choices that benefit them must share in the costs of their choices. Therefore, we agree that regulation focused on how choices are made is necessary. Our goal is not to limit what people choose so that different service levels and associated costs will exist.
Bumpersticker version...Referee the game; don't pick winners.
New comment: Reading this now, I think it is too abstract. The basic idea was that people should not be able to “free-ride” on the system by making one choice when their needs were little and another choice when their needs are high. I think what I was thinking at the time was that this did lead to some form of universality that liberals wanted while still limiting the role of government to governing (rather than providing) in a way that conservatives could support.
3. As Americans, we care about all our citizens. We will provide a minimum level of access to healthcare plans. However, resources are not unlimited. While we wish otherwise, we accept that differences in level of care will exist. The minimum care will never be best and, in fact, will be below average because our goal is for few to need the minimum and most to choose to bear costs themselves to achieve better care. We will always seek to improve the minimum but will always measure the costs of doing so because a bankrupt system cannot care for anyone.
Bumpersticker version...It's like Little League Baseball, everyone plays some but some kids play more.
New comment: In effect, this is how rationing gets built into the system. One layer of rationing is that the minimum plan does not provide all levels of service (e.g. it might not pay for a heart transplant past a certain age). But, for anyone willing to pay for a better plan, they can do so which results in normal market-based price rationing.
4. As Americans, we embrace our unique culture of individualism, entrepreneurship, and free markets AND our commitment to shared sacrifice and cooperation. States will be required to offer non-profit healthcare plans that will compete in the marketplace. Private insurers will be required to offer minimum plans in addition to higher service plans so that all Americans, rich and poor, have a choice between for-profit and non-for-profit plans.
Bumpersticker version...Game on, let's experiment and find out what works.
New comment: Reading this now, I see this as a potentially large area of contention given the current debate about whether the Federal government should offer a government option. However, I think I am still comfortable with this because it uses the states in a decentralized structure and I know that Principle #7 below regarding incremental implementation reduces the risk of unintentional consequences.
5. As Americans, we value our freedom of movement, whether it be simply changing jobs or moving across the country. We recognize that there is potential for inefficiencies from this freedom that would reduce the overall effectiveness of our healthcare system. We believe that efficiencies can be gained by enrolling all Americans at birth and maintaining enrollment until death. The national government is an institution well suited to support this role, up to becoming the primary payer for minimum plans for all Americans. All Americans will always have access. Where Americans choose access levels above the minimum plan, the individual is responsible.
Bumpsticker version..."No cover charge" (kind of), but cash bar.
New comment: Again, this is where liberals get the universality they desire and conservatives get more built in competition and choice. If structured properly, insurers could get guaranteed premium payments for all plans (minimum and above) with consumers personally paying for all plans and services above the minimum. With the minimum plan by definition being below average, competition for consumers would allow free market forces to operate.
6. As Americans, we value transparency and accountability. The national government method to collect revenue to pay for healthcare access will be separate from general revenues. Specific debate of benefit and cost trade-offs will be required as adjustments are made to ensure long term solvency of the system.
Bumpersticker version...If costs go up, people should see it.
New comment: I would generally favor doing this as a consumption tax so that everyone pays (including illegal aliens and criminals with non-payroll income). I would want payroll taxes for Medicare eliminated since the new plans would be cradle to grave.
7. As Americans, we are a pragmatic people. We seek change to improve our lives but are cautious of large changes that may have unintended consequences. To learn by doing, we will ask all state governors to submit proposals on how and why their states should be the first to implement a new healthcare structure. The national government, both the Congress and the President, will select a small number of state proposals, passing legislation necessary to fund the efforts but not prescribing the structure of the plans.
Bumpersticker version...Try a little, you might like it, then order a lot.
New comment: Given all we have seen with government bailouts and huge federal deficits, I am more convinced that we need to try this on a smaller scale before creating a budget-busting entitlement.
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So, any takers this time on this kind of compromise?
We're blood brothers.
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Comments
Now, certainly we are a nation that values entrepreneurships and free markets; there just isn't all that much evidence of either in the current system. In fact, it is entrepreneurial start ups that have the most trouble providing health care to the people they employ. (Leaving out completely the problem of providing care for the unemployed.)
I think you have to take into account that we may not be talking about all that much new money here. The costs for national health insurance might mostly be covered by inflows from current employer-based systems. In my mind, the biggest downside would be the dislocations in existing industries--insurers in particular, but also for-profit hospitals and other providers--as a single-payer will change the balance of power in the economic relationship. In the same way that Blue Cross can negotiate large discounts in the amount its subscribers pay for hospital costs, relative to individuals who pay for the same service out of pocket, the federal government, even without supporting legislation, would have the upper hand in any negotiations over the pricing for services. But I think that is a small price to pay, for making basic health services available to everyone in our society.
In terms of your comments, you seem more focused on costs and not on service. As an extreme example, the easiest way to lower cost would be to cap Medicare expenditures for individuals. Given a fixed set of resources, each person would decide which services to take and when until they run out. I doubt many people favor that.
But, looked at another way, we do have plenty of examples of where competing businesses have lowered costs. Getting drugs approved as over the counter and then moving to generics as the patent expires is one example. Without multiple drug providers, there would not even be price competition among generics (e.g. Walmart OTC generics tend to be cheaper than their competitors). So, the "dislocation" you foresee of losing for-profit hospitals to me would be a severe impact not just to them, but to me as a consumer. I want choices and I want competition so that I am not stuck accepting service from just one provider with no alternative.
In terms of entrepreneurship, maybe I should have used the word innovation. I would posit that there have been enormous amounts of innovation in medical care (AIDS drugs are one example).
So, the choice we have before us is complex. The compromise I have outlined here is designed to allow solutions to emerge dynamically rather than sweep aside everything to replace it with something that may not work. And, given the Federal government's track record, I don't think it is easy to argue that they will get this right.
We can agree the Feds don't always do a stellar job, though my experience with them is that they're pretty efficient at providing commoditized services; they just aren't very nimble, so they have trouble reacting to changing conditions. They're pretty good (i.e., efficient) at cutting Social Security checks and other administrative matters, but their processes are antiquated and political gridlock prevents them from quickly promulgating and disseminating changes in policy. So, for my money I would favor a system where the Feds pay, but where services continue to be provided by the current, or a modified, health care network. Certainly, the program should be rolled out/piloted on a small scale first, as you suggest.
Where I see a problem is in the idea that we have meaningful choice now. Now, I am a state government retiree (returned to work at another agency) and my annuity with the retirement system includes continuing coverage under Blue Cross, which is about as much choice that anyone has who isn't independently wealthy. But even at that, anything beyond basic health care (surgical procedures, for example) requires approvals under my plan. When I went in for some major emergency surgery awhile back, I got into a big fight later on with the insurer, who didn't want to pay my surgeon because the surgeon was "out of network" and my surgery was scheduled just beyond the 48 hour period recognized by the insurer for out-of-network emergency surgery. Similarly, my wife works for a large computer manufacturer. Our primary care physician of many years recently informed her that he will no longer honor the computer manufacturer's insurance, meaning that she will have to find a new doctor or pay for his services out of pocket. So, I suppose I'm arguing that when you suggest the argument is about "choice", then my response is "choice, compared to what?"
Anyway, I think this is a good discussion to have. One question: where's the music?
The who question is important to, as in who do we want to benefit the most?
Those with money, the young, the old,,,
As further agreement, I think your observation that the current employer based system does not provide real competition is valid. That is one thing I like about this compromise because it essentially gets consumers into a free insurance/service market where the minimum plan is a massive pool and then the better plans that most of us would buy can have highly varied approaches and offerings. I would hope that some are actually from hospital systems themselves as "maintenance plans" rather than insurance. For the first time, you would have the ability to shop around yourself with plans with lots of choice on doctors likely costing more and those with limited choice costing less. You choose which constraint you want to live with.
As to the music, the fourth paragraph in, there is some smaller type just above the bold, centered "Guiding Principles" with a link to an Iron Maiden song... yes, Maiden as accompaniment.
Given that the minimum plan is not supposed to even be average, I think the existing kinds of analyses that judge value of procedure against cost would be put into play. Therefore, the answer people fear would be true: if all you have is the minimum plan, either private or government bureaucrats have some control over how quickly and how much care you get.
However, off the top of my head, I would hope we could look for some sort of standard that caps costs but leaves flexibility to states and providers to create different approaches. Maybe there is a formula for a rolling cap on costs for designated periods (say five years) and this forces a minimum plan consumer to make treatment choices without going over the cap. Since the cap would roll, then new money would become available as each year passes.
However, back to the big picture, most consumers would buy into a better plan than the minimum and I would hope that the market would create different options where people can choose between different trade-offs. So, only a minority would be subjected to the rationing forced from the minimum plan. But, at least they would be covered and partially paying for it themselves through (presumably) consumption taxes.
"My argument for this continues to be that a large, centralized healthcare structure will severely reduce choice (e.g. no alternative medicine for the old hippies) and create another “too big too fail” institution that can be dangerous to our nation."
this implies we have choice now, but i think that's disingenuous. i can't choose which healthcare provider my employer will want to select (if my healthcare comes through my job). and securing coverage as an individual results in higher costs and worse coverage. this is a huge disincentive for people to exercise their "choice" and inverts the usual pressures of the free market.
you also might want to read this article.
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande
The case of this post, the minimum plan creates a pool with everybody in and paid for. There are no free-riders. Then, service providers and insurers can compete to provide access above the minimum in a market where the individual is not restricted to their employer's plan.
So, the desired result is universality and competition... which gives both liberals and conservatives something they want.
As to the link to the New Yorker article, it was cut-off in comments so it doens't work. If you PM me the link, I will read the article.
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande
i did notice that others had commented similarly. i commented because i can't tell if you've changed your stance or not. this doesn't make sense to me:
"Then, service providers and insurers can compete to provide access above the minimum in a market where the individual is not restricted to their employer's plan."
why are we catering to insurers? this is a choice too. if their industry was financially viable we wouldn't be having this conversation. creating a solution that still guarantees them a market isn't particularly free market, is it?
Not to be contentious, but your plan seems like more of a mission statement. Ahh, but as I look at the title of this post, I see that this was originally intended as more of a debate. I came over from the comment link on your July 17 post, where you stated that you did have a better plan. I'm still going to comment though.
1) You say that a huge government healthcare institution will reduce choice, won't allow for alternative medicine and will become "too big to fail".
Medicare is a huge government healthcare institution. Seniors can choose one of over 300 prescription plans; this indicates that we can have some degree of choice with regard to prescriptions. A single-payer universal healthcare system gives Americans access to every healthcare provider and facility in the nation; no more "participating providers".
I am unaware of a plethora of insurance plans that allow much in the way of alternative medicine. Please enlighten me. It would not be difficult to implement and fund alternative medical treatments into my healthcare proposal (I would need some numbers to work with). Alternative therapies are an excellent way to reduce medical costs, particularly with persistant symptoms such as low back pain.
As for the healthcare system being "too big to fail": the "too big to fail" label is reserved for institutions which would severely affect both the US and global economies in the event of failure. The US healthcare system would not be directly intertwined with the global economy and in the event of "failure" would have minimal effect if any. I'm not sure what would count as "failure" for the system in terms of potential to affect the US economy. If you would elaborate a scenario in which the single payer system failed, I could counter this point. I will say that all funding for the system would go directly into a secure trust to protect it from raiding politicians.
2) In a single-payer system, everyone has access to the same care, so this point does not apply.
3) If we accept that healthcare is a fundamental human right, then everyone deserves equal care and equal access to care. Healthcare should not be a for-profit venture. Allowing some people to purchase life-saving care that is not accessible to others is saying that the wealthy are more deserving of a healthy life than the poor, because they can afford to purchase better care. This isn't "rationing"; it's creating a caste system for life itself, based on one's net worth.
4) Not applicable in a single-payer system
5) Single-payer universal healthcare would allow free movement throughout the country, access to any provider and equal healthcare for all with no premiums or copays.
6) My plan utilizes Medicare, Medicaid and private insurance (government-paid private insurance for public employees, teachers, cops etc.) fundsto pay for single-payer. These funds are already separately collected, for the most part, which could easily change to all. Funds would go directly into a trust to prevent them from being used for anything else.
7) Reform at the state level is only going to cost more money and cause confusion, and we'd have to spend more money to change it later to be compatible with other states. And how does that work with your "enrollment at birth" plan? If sustainable healthcare reform cannot be passed at the federal level, states should consider passing reform at the state level. However, states should make every effort to implement reforms that are compatible with that of other states to address portability and billing issues.