Healthcare Reform Part 5: A Rational Bipartisan Approach
By Roger A. Forsyth, MDNovember 16, 2009
Instead of proposing a 2000 page all-inclusive bill, Congress should craft legislation that encompasses the most important aspects of healthcare reform and can be agreed on by both parties. Each political party will be less likely to object to the changes proposed by the opposing party if the extreme components of proposals are removed, the best of the ideas from both parties are incorporated into the bills, and the concerns of the various stakeholders are addressed.
For example, many Republicans object to making healthcare policies mandatory and universal because they feel that this is too coercive. However, if insurance is not mandatory, many individuals will withhold participation until they have need of coverage then cancel their enrollment when services are no longer needed. That would transfer the cost of their care to others, would raise the cost of premiums, and would be grossly unfair. Hence, Republicans should be willing to accept that participation must be mandatory. Their efforts should be directed at achieving limits on the level of mandatory participation, not on attacking the whole concept.
Democrats object to reform that does not require everyone to have a ‘qualified’ policy that is highly comprehensive and covers non-catastrophic costs. However, if coverage is highly comprehensive, this raises the cost of insurance, requires taxpayers to pay higher subsidies to cover the uninsured, and aggravates rather than alleviates the high cost of care. Hence Democrats should recognize the need to have limits on the extent of the mandatory coverage.
A rational compromise would have Republicans accepting that some coverage should be mandatory and Democrats agreeing that some healthcare expenses should be left to the individual. Mandatory coverage should include public healthcare (maternal and infant care, vaccinations), and a limited level of catastrophic care because these items involve every individual. When any one individual receives sub-standard public healthcare or is driven into bankruptcy by medical bills, the entire public is negatively affected.
Moreover, it is fair for all of us to share equally in these costs since we all will require pre-natal, early infancy, and vaccination services and almost of us will be subject to catastrophic costs at some time in our life. Insurance allows us to spread these costs over an extended period so that they are affordable instead of having to cope with them over a short time period.
Creating a new universal public health policy would not generate new expenditures but would provide needed protection for those who are currently without insurance. The cost of this insurance can be easily calculated. There are about four million children born each year. The total cost for delivery, infant care and vaccinations for each child will be under $10,000 for a total cost of less than 40 billion. If there are 200 million adults aged 18-64 and they each paid an easily affordable $200 each year, we could provide total coverage for every birth, every early infancy visit, and all vaccinations without any increase in overall cost or the need for additional taxes. Those getting care through Medicaid would pay using current Medicaid expenditures. The uninsured would use the funds that they now pay out directly. Those with employer-paid insurance would pay using their current insurance premiums. If we extend public healthcare to the entire population, we will have eliminated the primary factor that causes the U.S. to lag the industrialized world in longevity.
The parties also differ on the extent to which insurance should cover routine costs and catastrophic costs. Democrats want to create subsidies for those making up to three or four times more than the poverty level so that they will have the same comprehensive coverage enjoyed by those with employer-paid insurance. However, that will aggravate the over-utilization that currently exists and will be very expensive. Republicans object to most subsidies and advocate self-reliance using tax-deductible Health Savings Accounts (HSA). However, tax deductibility is of no value to those of low income. Again, there should be a compromise.
Instead of simply subsidizing the purchase of comprehensive coverage, reform should create subsidized HSA’s that low-income individuals would then use to purchase both routine and catastrophic care. Participants would have an incentive to use their HSA wisely if they were eligible for a small year-end rebates on any unused funds in their HSA and could apply the remaining balance to their next year’s policy. This compromise would combine the best aspects of both party’s positions—subsidies to guarantee access to low-income groups and HSA’s to encourage the efficient use of healthcare dollars.
Another area of contention involves deductibles and co-pays. Insurers and employers instituted high deductibles plus co-pays in order to discourage over-utilization. Congress advocates low deductibles and low co-pays in order to avoid discouraging needed care. Again, these positions are not mutually exclusive. Co-pays should be high when costs are affordable and low or zero when costs become unaffordable. Politicians can argue about the dividing lines, but they should accept the concept of graduated co-pays that start at 100% (a deductible) and continue at levels that are high enough to deter unproductive utilization, are not so high that they deter necessary care, and will not result in under-utilization because they are paid from pre-positioned funds in the individual’s HSA.
Reform should not try to encompass every theory that currently has popularity in the medical community. Convincing the two parties to adopt some ideas from the other is a challenge in itself. Tort reform has merits, but states can do this on their own. There is no need to create a national confrontation with the legal profession at this time. Computerization of medical records will take place without government subsidies where it is economically feasible but it will be an expensive mistake if the government tries to pay medical offices to install inefficient programs. Comparative effectiveness may have worked in controlled settings, but will be expensive to implement nationwide and therefore unlikely to reduce cost as proponents have claimed. Reform should be simple and cheap not complicated and expensive.
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Reply #1 on : Tue November 17, 2009, 00:49:46
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