The current congressional approach
to health care reform of adding ever more fixes without changing the
underlying system looks increasingly shaky.
What are the some of the indications?
- The public plan has generated
enormous opposition—and not just from insurers. Whether anyone believes
that a Medicare clone would reduce under-65 health care costs or not,
it is unlikely that a final reform bill will include anything other
than a weak compromise.
“promise” of $2 trillion in savings was withdrawn almost as soon
as it was made. Only the truly naïve believe that the industry would
willingly reduce its revenues.
“heads we lose, tails they win” dilemma. Mandating that every employer
pay a substantial part of employee premiums won’t fly, but imposing
only a nominal levy on non-payers will result in many employers abandoning
the same problem as for employers. They may work where pre-reform uninsured
numbers are low, but imposing them on states like Texas and Florida
with more than 20 percent uninsured looks overwhelmingly difficult.
Office analysis of the draft Senate Health, Education, Labor, and Pensions
Committee bill estimates that it would cost more than a trillion dollars
over ten years and still leave 37 million Americans uninsured.
The shakiness of the present congressional
approach was underlined this week by CBO Director Doug Elmendorf. In
a letter to Senators Conrad and Gregg, Elmendorf emphasized: “large
reductions in spending will not be achieved without fundamental changes
in the financing and delivery of health care.”
And that’s exactly the issue.
If we want to achieve something close
to universal coverage without bankrupting the nation (although this
may happen anyway, without health care reform), we have to rethink our
So here are seven principles to consider:
- Affordable basic
benefits – Everyone should be guaranteed basic coverage, but we
can’t afford Cadillac-level (or possibly even FEHBP-level) insurance.
Ultimately, funding availability must dictate basic benefits, not the
- Fairness of tax treatment
– Employers should have the option of providing supplemental coverage,
but this should not be subject to an unfair tax exemption.
- Price competition
without “cherry picking” – As in other industries, competition
should be fostered by transparent pricing of basic benefits (e.g. through
an insurance exchange), with supplemental benefits separately priced.
Insurers should be restricted from selling directly to employers whose
employees are able to buy coverage through an exchange.
- Individual choice, individual
payment responsibility – With the exception of existing government
programs and self-insured groups (which, with no insurer risk or profit
involved, are assumed to provide better value), individuals should have
the responsibility for choosing coverage that best meets their needs
and, subject to subsidies for the lower-income, their budgets.
- Restrictions on monopolies
– There should be effective constraints on insurer monopolies, as
well as on provider monopolies in which specialists in an area group
together to control prices.
- Funding – Just
as with Medicare and Social Security, there should be specific guaranteed
sources of funding for basic benefits, rather than continuing to rely
on the goodwill of employers and the financial abilities of individuals.
- Freedom from politics
– As proposed by Tom Daschle and others, health care policy should
be set by an independent board. Consideration should also be given to
moving Medicare payment policy to the same board.
The Senate Finance Committee’s decision
this week to delay reform bill markup until after the July Fourth recess
is a strong indication of their own unease with the current direction
of reform. Perhaps they could use the holiday to consider these principles.
Roger Collier was formerly
CEO of a national health care consulting firm. His experience includes
the design and implementation of innovative health care programs for
HMOs, health insurers, and state and federal agencies.
He is editor of Health
Care REFORM UPDATE