Better to reform the system than try to build a new one

Although we were promised a robust and “bipartisan” debate on every issue, the advocates of more government control of health care have decided that reform has to take place now and on their own terms. While President Barack Obama is insisting that universal health care must be passed as quickly as possible, the Senate Democrats are doing his bidding by threatening to bring the debate to an abrupt close.

The supposed defenders of minority rights are talking about using a procedure known as “reconciliation” to shove their poor excuse for health care reform down the throats of Republicans who are reluctant to vote for it.

Under the rules of reconciliation, they can choose to pass their bill with a simple majority (instead of the usual 60 votes) and preclude a Republican filibuster.

Faced with the very real possibility that their objections may be futile, many Republicans have been justifiably slow to offer alternatives.

This has to change. Everybody who isn’t in complete denial knows that our health care system is a headache: Costs are increasing, quality care is spread unevenly among rich and poor, and coverage is declining. Given this, opposing responses have to focus not only on the detriments of the rival plan but also on creative ways to improve on the status quo, which we all agree is not up-to-speed.

The preservation of a patient-centered model of health care should be part of any renovation. As I stated in my last column, the Democrats are pushing a “public plan” predicated on a combination of private and public insurance. They say they will allow people to retain their private plan if they so choose, but it will almost certainly lead to price-fixing that heralds the death of privatized health insurance.

While they may not have the same ring as the phrase “universal health care,” there are many ways to universalize insurance that do not involve the total shifting of it from private to public control. It would be better to reform the current system before trying to build a new one from the ground up.

The first way to do this is to improve the situation of people who already have access to health insurance. These days, most people get their insurance through their place of work. The problem is that most companies who pay for their employees’ insurance can’t afford to offer a choice of carrier, so they supply everyone with the same plan (usually the cheapest available). Since they almost all choose from one of the big insurance carriers, these carriers have essentially formed a monopoly on health care.

With this kind of power, the big carriers can charge higher prices and supply inferior quality ““ and they have. What is most off-putting is that many people who get their insurance this way don’t even know they’re getting substandard treatment until it’s too late.

To enable people to have more choices in health care and make room for other carriers to join the market and develop economies of scale, the federal government should subsidize (with tax incentives, etc.) what are called “insurance exchanges.” This is a market-based approach that brings together employers and insurance companies with the goal of setting up multiple options of carrier for the employee.

Under such a system, the employer would be required to provide a baseline of coverage ““ that is, to pay for the lowest-cost carrier. If he or she is not satisfied, the employee can choose to upgrade to a higher-cost carrier and pay for the difference. This in turn generates cost-conscious consumers (rather than third-party-payers) who take their health into their own hands.

For those who don’t work or work at jobs that don’t come with insurance, a tax deduction or refundable tax credit should be extended to anyone who independently purchases health insurance. Vouchers are another great idea. These would not only give people the ability to afford insurance; it would also rally different insurers to compete for their business.

One other idea that has attracted far too little attention is that of a medical “savings account” in which people (or their employers) who take out a high-deductible insurance policy would be able to deposit tax-free funds in an account to be used exclusively for medical expenses. Once again, this puts more of the decisions in the hands of individuals, which is always preferable to third-party payment.

Hence, there is no need for a government-run surrogate to private health insurance.

If competition enters into the market, complaints about the excessive costs of health care will gradually disappear or be drastically reduced. Nor will there be a need to worry about the bureaucratic mess, long lines, shoddy care, trillions of dollars of wasteful spending and everything else inherent in a public plan.

If it were possible to get rid of Medicare and Medicaid, we should do that too and relieve the elderly and poor of their reliance on second-rate care and clean up our federal debt in the bargain.

In the meantime, though, it might be just as well to live with these monuments and try to make private insurance competitive again.

If you want to stick with the old ways but upgrade them, then e-mail Pherson at [email protected]. Send general comments to [email protected].