Wednesday, February 04, 2009

A Conservative Take on Health Care Reform

I've told this story a few times, but I will tell it again:

In November of 1996, I fell ill. It started as a flu which became pnuemonia and then a massive infection. The end result was that I was in the hospital for two weeks as they tried to get the infection under control.

At the time, I didn't have health insurance. I was 27 and working for a coffee chain that did provide health care, but when you are working for 6 bucks an hour, paying what seemed to be a large amount for health care seemed out of the question.

What I did have was a plucky nurse practictioner. I was going to a local clinic that worked with low-income communities worked on a sliding fee. The nurse practioner was saw that a I had an astronomical white blood cell count (which means I was fighting the mother of all infections) and decided I needed to be admitted to the hospital. My first thought was how I was going to pay for it. Not to worry, she said, a way would be found.

And a way was found. She was able to get me in contact the Minnesota Department of Human Services and was able to get Medicaid, the federal program for the poor, to pay for a chunk of my hospital stay. I could recover knowing that this was taken care of.

Even though as a Republican, I wince when people start talking about single-payer health care, my illness and how it was paid for taught me two things- that health care is an important issue and that government has to have some role.

The fact is, we need to think about reforming our health care system. Too often though, conservatives have tended to put their heads in the sand on this issue, talking about how we have the best system on earth and about fears of socialized medicine. But ignoring the problem is not an answer. As more and more Americans lose their jobs or see their premiums rise, they are looking for answers and if the GOP doesn't have an answer, they will go to the people who have one-namely the left with its single-payer system.

So, Republicans need to come up with solutions. What are the options?

Jurgen Reinhoudt gives a fairly good rundown of several health care systems in Europe that might give conservatives ideas on how to reform our system. Contrary to popular opinion, not all Euro-health care is single-payer; some use a mixture of private and public incentives to achieve universal health care. It's well worth the read, but I will jump ahead and tell you that the system he favors (as do I) is the Swiss health care system. That system is somewhat similar to what has been done in Massachusetts in that the health care is more consumer-driven than what we have.

We come, then, to the Swiss system. It is a system that deserves the attention of every American interested in market-based health reform. Regina Herzlinger, McPherson Professor of Business Administration at Harvard and the “godmother of consumer-driven healthcare”, wrote in late 2008:

“The country of Switzerland has universal coverage, costs that are 40% lower than ours and that inflate at lower rates, and an excellent health care system in terms of outcomes and resources. The key to their success is that the Swiss system is consumer-driven: consumers buy their own health insurance from more than 90 private health insurance firms. If they cannot afford it, the cantons subsidize it. If they are sick, they pay no more for their health insurance than the well (the Swiss insurers risk-adjust each other). Consumer oversight insures value for the money better than oversight by governments and employers.”

For conservatives, who generally favor market-driven solutions, the Swiss system has achieved a great deal on the demand side, by placing the consumer front and center and getting employers out of the way. Whereas in the U.S., health insurance is commonly tied to employers, and whereas many Americans find it unaffordable to purchase individual health insurance policies (in part due to heavy state regulations), in Switzerland the whole health insurance market revolves around individual insurance policies. Swiss citizens can choose from one of hundreds of reasonably priced, competing insurance plans from dozens of competing health insurers. They may choose a high-deductible plan, a low-deductible plan, or an HMO plan.

In a way, health care is purchased in Switzerland like we purchase auto insurance in the US. People have to buy an isurance plan and if they are not able to afford one, then the state steps in with a subsidy.

Reinhoudt thinks there are drawbacks, namely regulation that requires a basic benefits package and lack of information on doctors and clincs vis a vis performance. While one can frown on regulation (and I do), I think there has to be some regulation in order to help control cost and ensure coverage. I do consider health care to be a business, but in someways it isn't like buying say, auto insurance, but somewhat like a public utility like light and gas. There are publicly traded companies that are providing light and keeping us warm, but they are subject to certain regulations because they are vital to human life. Same goes for health care; it can be a business and it should be, but it is also a common good vital for human life and cant' be totally subjected to the whims of the marketplace.

That said, this was a worthy article and I hope more Republicans read it. We have to come up with a conservative solution to health care or else get ready for single-payer, US-style.


David Adesnik said...

Thanks for pointing out Reinhoudt's article. I linked to the article with a hat tip to you on Conventional Folly, where I moved from OxBlog. Link here.

Dustin said...

I always find it interesting that opponents to health care reform argue that it will be the "death to all of us" or "it will restrict our choices" or "medical decisions will be made by bureaucrats".

It is the current unregulated capitalistic private insurance companies who are actually fulfilling their worst nightmare right now. "Death to us all" - private insurance companies are literally killing patients right now by denying lifesaving care like in the case of Cigna's denial of Natalie Sarkisyan's care.

"It will restrict our choices" which is exactly what our private insurers are doing. I have private coverage myself as a medical professional through my hospital who employs me. I'm restricted to a list of doctors I can see and also to only 4 hospitals in the local Tampa Bay area and if I seek medical care outside of this my insurer will put a majority of the financial cost on me so if I want somewhat affordable medical care I'm forced into their restrictive measures.

"Medical decisions will be made by bureaucrats" - in the private insurance market medical decisions aren't made by myself or my doctor but rather by bureaucrats (executives and internal business analysts) from my private insurers when they decide what is covered and what is not.

Healthcare reform would put a stop to all this and I've actually researched for hours on what the best way to achieve this is. Here's my solutions -