With the opening of the new Congressional session, the latest health care reform effort is off and
running, with HHS Secretary-designate Tom Daschle telling senators at his confirmation hearings of his desire to work collaboratively and listen to diverse ideas.
One thing about Washington DC, there’s never a shortage of diverse ideas, and with the possibility of passage of some version of reform, there’s an especially impressive number. Daschle’s problem is going to be how to pick and choose among them.
Every reform plan—whether from Baucus, McCain, Obama, Clinton, Wyden-and-Bennett, Kennedy, Stark, Dingell, or elsewhere—comes with its own strengths and weaknesses, and cross-aisle consensus is certainly missing. But maybe it’s possible to take a little of this plan, a little of that, and so on, to create the magic mixture that can reform our system and achieve the critical sixty vote support in the Senate.
Perhaps it’s time to consider a recipe from Macbeth:
Eye of newt, and toe of frog, Wool of bat, and tongue of dog, Adder’s fork, and blind-worm’s sting, Lizard’s leg, and howlet’s wing…
Shakespeare’s witches didn’t provide precise measures, and we may have to substitute for some of the ingredients, but we’ll go ahead and start adding items to our cook pot anyway…
Eye of Newt—
Well, it’s more like website of Newt. Former Speaker Gingrich is promising a reform plan by March, but we can’t wait, so in our magical broth we’ll use his statements supporting an individual mandate and the development of a national electronic medical record system.
We’ll take a large cupful of individual mandate, since it’s hard to see how reform can succeed without it. No mandate means some non-covered population, and experience shows such a population can only grow as health care costs increase. However, we’ll use just a tiny amount of EMR, because although we want to include it in our broth, it’s a very, very expensive ingredient. Even in systems with centralized management and direction, like Kaiser and Britain’s National Health Service, the costs can be sky-high and success uncertain. Kaiser’s costs are currently estimated at over $4 billion, while the NHS system, already four years late, is now budgeted at over $20 billion.
Toe of Frog—
There was always something tentative—a toe in the water?—about Senator’s McCain’s reform plan, but his proposal to eliminate the tax deduction for employer health care payments earns a big tablespoon’s worth in our broth. The present deduction creates a huge inequality among large and small employers and individuals, while a play-or-pay alternative is likely to result in an employer coverage death spiral as current players rush to the less costly payer option.
Wool of Bat—
It’s really wiles of Baucus, with our ingredient taken from the Senate Finance Chair’s recent carefully-crafted policy paper. Because the flavor is so much like that of our next ingredient, we’ll use only a few teaspoonfuls, to include the Health Coverage Council that would set minimal coverage levels, the prohibition on pre-existing condition exclusions, and increased funding for primary care and chronic care management. We’ll make sure that our teaspoon avoids the proposal to allow buy-in to Medicare, since this would add adverse selection to a program that is already a fiscal disaster.
Tongue of Dog—
Or, at least, the tongue of Daschle, in his book Critical. Our spoonful will avoid his proposals for play-or-pay and the expansion of Medicare, but we’ll make sure our broth includes turning FEHBP into a health insurance marketplace. FEHBP has political credibility, an existing administrative mechanism, and the appeal of a program that is offered to members of Congress.
Bennett added to Wyden has produced a particularly well-flavored ingredient, so we’ll take a large forkful of their Healthy Americans Act, including replacing the employee health care tax deduction with employer contributions tied to business size and payroll, establishing a basic set of benefits but allowing insurers to offer separately-priced additional benefits, and rolling much of Medicaid preventive and acute care into the overall system—a big help to cash-strapped state governments in a recession. However, we’ll make sure that our fork avoids their proposed establishment of fifty-plus new state agencies to help individuals select insurance.
We’ll stir the contents of our pot at this point, since the most flavorful ingredients have been added.
Lower-income people might well feel stung by Ezekiel Emanuel’s proposal to fund health care through the inherently regressive and recession-vulnerable mechanism of a VAT, but we’ll take a teaspoonful from his plan for a voucher system. With our national emphasis on buying things, a tax-funded voucher that forces a deliberate choice among carriers and coverage is likely to be a more effective tool for informed purchase of individual insurance than alternatives like tax deductions and tax credits.
With lizard’s legs unavailable, even via the internet, we must make a complete substitution, and use instead a slice from Elizabeth Swartz’s book, Reinsuring Health. Reinsurance is unlikely to make any significant difference to total costs, but it is less complex than risk-adjustment and could be funded through a separate catastrophic coverage program to reduce insurer premiums.
Our final ingredient, (h)owlet’s wing, turns out to have flown a long distance, from the Netherlands, where we’ll take a pinch of the recent Dutch reforms. Since they have the experience and the purchasing power to demand lower premium rates, large employers are allowed to negotiate with insurers in order to offer discounts to their employees of no more than ten percent off regular individual rates, thereby providing continuity from the prior system and reducing the administrative burden on the individual marketplace.
So, how does our magical broth taste?
It’s one that could appeal to both liberal and conservative palates. It establishes an individual mandate but guarantees issue and portability of coverage, shares responsibility more equitably among all employers and all individuals, encourages price competition by requiring insurers to offer a basic set of benefits but allows them to offer additional coverage, and eliminates the Medicaid “second class care” that is bankrupting state governments, while building on the strengths of the present administrative capabilities of FEHBP and large employers.
Will everyone love the result of our classic cookery? It should please many diners, but there will be some who will resist such a recipe. No matter how good the final mixture, Shakespeare also anticipated the political stewing process of the congressional debates:
“…For a charm of powerful trouble, Like a hell-broth boil and bubble.”