Wednesday, February 07, 2007

Universal Health Care

Health care seems to be on everyone's minds right now, and it will clearly be a top issue in the presidential elections next year. President Bush recently came out with a proposal to increase access to healthcare and lower expenses through a system of tax breaks. Wal-Mart went on the record yesterday, with various labor unions, setting a goal of universal health insurance coverage by 2012. Massachusetts and California have now instituted state-wide plans to provide universal coverage (though the Massachusetts plan is having problems, and the California plan is still in the formative stages). Many other states, like my own state of Washington, are pushing for similar legislation.

Back in 2005, I started a discussion on my Xanga blog about entitlements, primarily universal healthcare. I also posted my thoughts on the Massachusetts plan in April 2006.

On Monday, I came across a post on the John Edwards '08 blog touting Edwards' health care proposal. He claimed the support of "the blog world's health care policy expert", Ezra Klein (I've never heard of him, but that's no surprise). Following the link to Ezra Klein's writings led to a very thought-provoking discussion about universal health care on the American Prospect website.

The discussion aims to answer the question: "When it comes to comprehensive health care, what are progressives' core demands?" So, it is explicitly from a progressive-liberal point of view. But, because it is a discussion of "core demands", the discussion is one that all of us can relate to in some way.

Ezra Klein starts it off by laying out four non-negotiables:
* An End to Employer-Based Healthcare. He doesn't specify alternatives, but presumably publicly-funded insurance, tax breaks for individuals for private healthcare, and other systems would be options for him.
* Insurance that Insures. Meaning insurance that has to insure anyone without discrimination. Klein suggests regulation to force the insurance industry to set rates for whole communities as a group, and to accept anybody who applies for insurance.
* Progressive Universality. Everyone should be able to be insured. Everyone should be required to purchase insurance. Insurance costs must not be an unreasonable burden on anybody.
* Scalability. Basically, Klein is saying that whatever we accept now should be able to transition into a full-blown government-mandated income-redistributing social insurance policy in the near future without too much hassle.

Next, Merrill Goozner adds his thoughts to the discussion. He agrees with Klein that insurance must be universal and mandated. However, he disagrees with Klein about the possibility of a good compromise between employer-funded insurance and a full-blown government-run healthcare system. He points out that employer-paid insurance provides income redistribution on a small scale (because all employees pay the same for their insurance, regardless of their income level), a state which would not be likely to carry over to a private-coverage, tax-break system. That's an interesting observation I hadn't considered. Goozner's prescription is to simply go whole-hog to a government-run health system, and accept no substitutes.

He also suggests mandating some amount of spending on "preventive care and public health campaigns" as a way of "effectively controlling costs". I don't think we can count on such basic measures to realistically provide much of the significant cost-control that is going to be necessary. He also says that "[w]e should demand that the health care system stop draining the rest of the economy." I'm not sure, thought, how he proposes to make that happen. His third point, Quality, is the most confusing to me. He advocates offering everyone "high quality care that is the best that medical science has to offer", but says that "[w]hat it doesn't mean is offering everyone Cadillac care", meaning care options that are overly expensive for the benefit they provide. Of course, the huge question of who (presumably some government agency in a government-run system) would make such weighty decisions is left unanswered.

Jonathan Cohn joins the discussion next. He believes that some version of an employer-based system could be workable as part of a universal healthcare solution. He also adds one significant item that Klein didn't mention, and that Goozner glazed over... cost control. However, he doesn't have any substantive recommendations on that very important aspect of the discussion.

Maggie Mahar is the last participant (for now, at least). She focuses straight in on the cost-control side of the question, and frames the issue in terms of sustainability:

Today we need to launch a public debate that tackles a very sensitive question: how do we create a sustainable health care system that offers high-quality, necessary care to all Americans?

Ezra's proposal focuses on the second half of the equation -- universal coverage -- and, on that score, I agree with virtually all of his points. But I would add that we can't talk about covering the uninsured without addressing the next question: How do we pay for quality care, this year, next year, and the year after? How do we create a sustainable system?

Mahar goes on to face the cost issue head-on. She suggests that the source of the problem is in the nature of how we consume health products.
The health care industry is different from other industries because consumers rarely put a lid on pricing -- even if they have "skin" in the game. Everyone is ready to pay more for the newest medical technology because we have been trained to believe that the newest is best. And when it comes to preventing disease, who wants anything less?
She elaborates on this theme in great detail, and (in my opinion) convincingly. She finishes her thought by arguing that if we could cut out the wasteful use of healthcare that has become prominent in our society, that funding universal healthcare would no longer be an issue.

I agree with most of the goals laid out by these authors. I am not optimistic, though, that any effective solutions will be as readily available as they have proposed.

I agree with the authors above that everyone should have a health safety net. I'm not sure I agree with them about specifically what that means, or how much would be included in that safety net.

I am pretty well convinced by this point that, for an insurance system to function, there must be mandatory buy-in. This system will, of necessity, be some form of income redistribution system. Mandatory buy-in is a more free-market way of doing that redistribution than taxation, and I tend strongly toward support of free-market solutions.

I can see the flaws in an employer-run system, but I can also see that it might be the most workable solution, so I am ambivalent on that point (for now).

I am not interested in Klein's view of "scalability", since I am not convinced as he is that full-out government-run health care is the best end result. In fact, I have a strong suspicion it would not be a good way for this process to end. So, while he is willing to aim for a potentially interim transitional phase, I am much more interested in finding a solution that is, as Mahar put it, sustainable, and intended to be sustained.

I agree with Mahar that the cost issue is unavoidable, and is a key to solving our healthcare problems. I'm not sure exactly how to approach the cost issue, but I think the blame falls very widely, on nearly all the participants in our healthcare system.

I've got much more to think through on this, but this post has gotten long enough. In another post soon I'll go into more detail about the problems I perceive on the cost side of the healthcare system. I'm hoping that the comments here will generate other lines of thought and discussion as well.

So, what are your thoughts? Which of the above writers do you relate to the best, and why? What do you think are the most important goals we should set as we work to rework our health care system? Do you think our health care system even needs to be reworked? What other aspects of the problem should we be considering?



bcongdon said...

This news item just came across our internal net here at Intel:

Intel joins Wal-Mart in push for affordable health insurance.

Intel Chairman Craig Barrett joined executives from Wal-Mart, AT&T, Kelly Services, and two major labor unions on Wednesday to call for “quality, affordable” health care for every U.S. citizen within five years.

“The U.S. health care system delivers results below international norms at high cost, and consumers and industry suffer the consequences,” Barrett said in a statement, according to the San Jose Mercury News.

The group didn’t offer a specific plan, but issued a set of “common sense principles”:

- Every person in America must have quality, affordable health insurance coverage.

-Individuals have a responsibility to maintain and protect their health.

-America must dramatically improve the value it receives for every health care dollar.

-Businesses, governments, and individuals all should contribute to managing and financing a new American health care system.

Barrett said, “The simple principles and the diverse champions announced today will create a framework to develop workable approaches to the problems.” The principles were quickly supported by politicians such as New York Senator Hilary Rodham Clinton.

William Custer, an economist and professor of health administration at Georgia State University, told the Wall Street Journal , “I'm skeptical that they at this point agree on anything other than broad general principles.”

Nonetheless, he said, "I do think it's going to have an effect because it's another fairly weighty voice entering the debate and pushing for something to be done."

bcongdon said...

One interesting fact in this debate is the astounding lack of interest in the experience of other countries.

To the point: exactly WHICH country with socialized medicine has better health care than the U.S.?

And that leads to the follow-on question: Why would we want to destroy the (imperfect, but) best health care system in the world?

I'm open to ideas to improve our system. But removing incentives for private investment while giving more control to government is not the answer. Exhibit A: the public schools.


Mark Congdon said...


Thanks for the Intel news... I hadn't heard about that. The theoretical goal-oriented momentum is very strong... whether it will translate into real agreement on solutions or not remains to be seen.

You wrote: One interesting fact in this debate is the astounding lack of interest in the experience of other countries.

Actually, Craig Barrett said in the news you cited: "The U.S. health care system delivers results below international norms at high cost". And Merrill Goozner on the American Prospect site wrote: "spending 40 percent more than any other advanced industrial nation, yet delivering results that rank us 22nd out of 30 countries in the OECD". The OECD is the Organisation for Economic Co-operation and Development... but I don't know much more about it. I looked up the stats, and in the OECD's 2006 Factbook it does show that the US is 22nd out of the 30 nations for life expectancy. We're also relatively high on the per capita infant mortality rates. But, in both cases we are very close to the average.


bcongdon said...

American big business likes the idea of socialized medicine because they can pay the same salaries while savings billions of dollars transferring the cost of health care from themselves to the government (i.e., the taxpayer).

So when big business, including Intel, sides with the socialists using bogus statements about how badly our medical care compares with other countries, I don't believe them. They have a dog in this hunt, so to speak.

A good summary of how we compare with other countries, and what we might expect with socialized medicine, was written by Walter Williams. Please read it.


MarkC said...


Very interesting article... thanks! Sounds like if one measures by wait times for service, America probably has vastly better health care results than nations with socialized care. If one measures by infant mortality rates or life expectancy, America has slightly worse health care results than nations with socialized care.

Also, I agree with you that the business community has a strong motivation to get out of the health care business. It is a huge hassle for them to be in the business of finding healthcare options for their employees, and they'd love to pass that off to anyone else.


Douglas_Coombs said...

Not that I am convinced socialized medicine is the way to go, but the health care crisis in this country has had a huge effect on companies bottom lines. Health care costs have gone up so rapidly that it is starting to be a huge portion of a persons salary, even at a company like my own in which over 90% of the employees have at least a BS degree and most have an MS or PhD. I can't imagine what it must be like for small businesses in more service or production oriented fields.


MarkC said...


That's an excellent point. However, I would state the problem more generally... health care is too expensive. If it wasn't companies putting out that much money (money which is, eventually, provided by consumers through increased purchase prices), it would be someone else who was required to manage the income redistribution inherent in an insurance system. And, in the end, that money will inevitably come from the individuals that make up our society.

So, yes, I agree that we should add to my list that healthcare is simply too expensive. I am very interested in exploring why that is, and what the options are for resolving the problem. I have some ideas, but if you have any, feel free to start a post introducing your thoughts so we can discuss them. *end of not-so-subtle hint* :)


Douglas_Coombs said...


Regarding your not so subtle hint, I was just thinking about that an hour ago. Unfortunately, I haven't seen any good reports or articles on why health care is so expensive. I've heard several people suggest that it is the fault of malpractice insurance, but I haven't read anything comprehensive to back that up. Usually, that is suggested by someone in the medical field, so they might just be trying to point the finger somewhere else. On the other hand, when I hear a doctor say the cost of his malpractice insurance rivals his own salary, that starts to get my attention. I really wonder how true that is across the spectrum or whether that doctor was exaggerating.