Monday, August 24, 2009

Two Health Care Plans Republicans Should Support

Whenever health care reform is talked about, Republicans respond in an almost Pavlov-style manner. Immediately we start talking about the evils of the Canadian and British healthcare systems and about the loss of American freedoms. Some even go a step further and claim as blogger John Vecchione writes in a recent post, that there is no health care crisis and when nations make universal health care a goal it also makes conservative parties unconservative.

Such claims amount to sticking one's head in the sand and defending a system that really is undefendable. As I have shared in a recent blog posting as well as in the past, the American health care system is broken. That is not some liberal scheme, this is a plain fact. As some conservative bloggers have noted in the past, the current system keeps people tied to jobs they may not want simply to have health insurance benefits. The other problem is that when one loses their job, they also lose their health benefits. People are also faced with rules like pre-exisiting conditions and recission.

Conservatives are not crazy about having a government-run system for many reasons. One big reason is that such systems tend to be unsustainable. For example, Travis Frey noted in a recent blog post that France is faced with a healthcare system that is cracking under the strain on rising costs:
France claims it long ago achieved much of what today's U.S. health-care overhaul is seeking: It covers everyone, and provides what supporters say is high-quality care. But soaring costs are pushing the system into crisis. The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics.

In recent months, France imposed American-style "co-pays" on patients to try to throttle back prescription-drug costs and forced state hospitals to crack down on expenses. "A hospital doesn't need to be money-losing to provide good-quality treatment," President Nicolas Sarkozy thundered in a recent speech to doctors.

And service cuts - such as the closure of a maternity ward near Ms. Cuccarolo's home - are prompting complaints from patients, doctors and nurses that care is being rationed. That concern echos worries among some Americans that the U.S. changes could lead to rationing.

The French system's fragile solvency shows how tough it is to provide universal coverage while controlling costs, the professed twin goals of President Barack Obama's proposed overhaul.

Conservatives rightly point out the problems in health care systems that have a high amount of government control. But the problems is that we stop there. We pretend there is no problem and maybe offer a few sops to change the system.

But the fact is, as more and more people lose their health care or face problems with the insurance that they have, people are looking more and more to Washington to help solve the problem. If Republicans decide to take John Vecchione's advice, we can expect the public will look towards those who are providing solutions, namely the Democrats. The best way to assure that we have single payer is for Republicans to simply ignore the issue and not care.

But the fact is there are two plans that offer some real change without creating a large new governmental program. If the GOP really cared about offering solutions and not just political one-upsmanship, they could really make a difference.

The first plan is the Healthy Americans Act supported by Democratic Senator Ron Wyden of Oregon and Bill Bennett, the Republican Senator from Utah. Their plan basically is a grand compromise that achieves universal coverage and fulfills the aims of both Democrats and Republicans: it allows for the universal coverage that Democrats want and it also injects market forces into the system, something that Republicans would like to see.

The other option is modifying the model that is used by the nation of Singapore. The plan basically is basically as follows:

Singapore’s system requires individuals to take responsibility for their own health, and for much of their own spending on medical care. As the Health Ministry puts it, “Patients are expected to co-pay part of their medical expenses and to pay more when they demand a higher level of service. At the same time, government subsidies help to keep basic healthcare affordable.”

The reason the system works so well is that it puts decisions in the hands of patients and doctors rather than of government bureaucrats and insurers. The state’s role is to provide a safety net for the few people unable to save enough to pay their way, to subsidize public hospitals, and to fund preventative health campaigns. (emphasis mine)

Medisave, which covers about 85 percent of all Singaporeans, is a component of a mandatory pension program. Employees typically pay 20 percent of their wages into the Central Provident Fund (CPF), while employers pay 13 percent. (Since 1992, the self-employed have also participated.) At the beginning of 2007, CPF had over $1 billion in surpluses.

In Singapore’s system, the primary role of government is to require people to save in order to meet medical expenses they don’t expect.Medisave accounts can be used to pay directly for hospital expenses incurred by an individual or his immediate family. Limits are in place on the extent of Medisave funds that can be used for daily hospital charges, physicians’ fees, and surgical fees. The idea is to cover fully the bills of most patients in state-subsidized wards of public hospitals. Beyond that, individuals dip into their own pockets or use benefits from insurance plans (see more on this below). Medisave can also be used for expensive outpatient treatments such as chemotherapy, renal dialysis, or HIV drugs.

Medishield, the second part of the program, is a national insurance plan that covers the higher cost of especially serious illness or accident, which in Singapore’s system is described as “catastrophic.” Singaporeans can choose Medishield or several private alternatives, some offered by firms listed on the Singaporean stock exchange. Premiums for the insurance plans, including Medishield, can be paid using Medisave accounts.

Medifund, the third part, was established by the government for the roughly 10 percent of Singaporeans who don’t have the means to pay for their medical needs, despite the government’s subsidy of hospital and outpatient costs. The fund was set up in 1993 with $150 million, with the budget surplus providing additional contributions since then. Only interest income, not capital, may be disbursed.

Finally, there’s Eldershield, an addition to the 3M structure that offers private insurance for disability as a result of old age. It pays a monthly cash allowance to those unable to perform three or more basic activities of daily living.

The Singapore plan is not a plan that would please liberals, but it would please those who think government should have a minimal role in providing a safety net and putting the power in the lap of the consumer.

Of course, there are those who will say that any government intervention is an anathema. Such a view is not only cold hearted, but will not help the GOP in the long run. The average American isn't looking for a womb-to-tomb welfare state, but they do want help. Most Americans might not like the Obama plan, but they still fear losing their health care or getting sick and finding out that their insurance company will not help them.

It's way past time for Republicans to be truly concerned with health care. Let's stop sticking our heads in the sand and offer real practical solutions.

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