Now that Democrats won back the U.S. House of Representatives, they’ve wasted little time shining a spotlight back on health care reform. That’s an important development, and I applaud them for doing so in the face of Republican inaction since Donald Trump began occupying the White House.
But a leading proposed solution from the party’s progressive wing takes us in the wrong direction, at least for the time being. I’ll elaborate a bit later as to what I mean.
Knowing the Affordable Care Act (ACA) is on life support, several high-profile members or leaders of the party are supporting a Medicare-for-all proposal. The moniker replaces calls for a “single-payer” system, whose wonky jargon always sounded as opaque as the perverse system that both parties agree needs fixing.
Not surprisingly, Republicans are scoffing at such an idea. Even former Starbucks CEO Howard Schultz, whose potential 2020 presidential run would be as an independent, has dismissed the Medicare-for-all plan as unrealistic and financially unfeasible.
The ACA’s irony is that it rendered health care unaffordable for many American citizens who don’t qualify for federal subsidies. A new analysis by economist Robert Genetski, for example, found that health insurance premiums soared by 84% for individuals and 126% for families last year above what would have been expected without the landmark legislation.
Here’s my bottom line assessment: Let’s not decimate or eliminate choices for Americans who want to keep their doctor or health insurance plan, or employers who have the option to fully insure or self-insure health benefits as a recruitment and retention tool, earmark dollars for them to shop for coverage in the individual insurance market or not provide anything at all. To do so would be downright un-American, especially considering how choice drives the U.S. economy. Look no further than the Amazon platform. People are used to shopping this way for everything.
Democratic candidates running for president in 2020 who have called on dismantling the entire private insurance model are promoting a concept that would toss the proverbial baby out with the bathwater. While removing options that place profit ahead of people is desired by policymakers, business people and consumers, let’s instead breathe enough life into the free market to render inferior plans obsolete.
The best solution is to preserve and promote parts of the private system that are working. Examples include self-insured and pooled health plans offered by employers or organizations comprised of like-minded individuals with innovative approaches to containing costs and improving outcomes.
These entities, which provide coverage for roughly half of all Americans, are employing a number of strategies that include reference-based pricing, patient advocacy, direct primary care, value-based purchasing, fiduciary pharmacy benefit management and more.
Health care is now teeming with disruptors that are entering the field at a frenetic pace with an emphasis on technology that includes medical applications for artificial intelligence, software, data analytics, telemedicine, etc., along with the emergence of electronic medical records that vastly improve efficiency. Also look at Amazon’s partnership with Berkshire Hathaway and JPMorgan Chase, which has led some insiders to speculate that the largest online retailer intends to test market health care cost containment strategies on its own workforce that it hopes to turn into a profit center. Let’s give these innovators a chance to revolutionize the industry and not reinvent the wheel.
I’d also like to see so-called skinny plans added to the legislative mix across all states so that people at least have the option of buying affordable catastrophic coverage while self-insuring routine doctor visits. The rap on these products is that they provide inadequate benefits, but there are many people like myself who are healthy and/or self-employed, and we don’t need all the bells and whistles. Again, let’s expand choice.
But make no mistake: The status quo is unacceptable. So let’s reform parts of the system that aren’t working. Those efforts largely revolve around reducing the sky-high cost of prescription drugs, particularly specialty scripts, by importing more medicine from so-called tier-one nations whose quality control standards mirror those in the U.S.
Another area that’s ripe for massive improvement is to manage the wild cost variation of inpatient and outpatient services by requiring transparent pricing and credible quality standards, as well as tying physician compensation to outcomes vs. volume, known as value-based purchasing.
The same thinking applies to a handful of large insurance companies (Blue Cross and Blue Shield, UnitedHealthcare, Cigna, Aetna and Humana), whose costs are also soaring each year. If the pharmaceutical industry and health insurance carriers keep jacking up their prices with no end in sight and little to show for it in terms of better outcomes, then they’ll at least face price controls somewhere down the line.
We need to pass legislation that introduces more competition in these areas. One idea has been to allow insurers to sell plans across state lines, though how such a move would be regulated with 50 different insurance commissioners is scary to ponder.
There’s one area, however, where I think the federal government can continue to play a role as it has under the ACA. In a nutshell, the focus clearly should be on widening access to affordable health insurance through Medicaid expansion. Block grants allow states to cover uninsured populations as they see fit in keeping with the spirit of an old industry expression suggesting that all health care is local. This approach is far preferable to stretching one or more entitlement programs across the entire population, and I think it’s a fair compromise between liberal and conservative proposals.
But if these incremental steps fail to expand access to health insurance, tame rising costs and improve health outcomes, then I think the U.S. will need to re-examine its options and give serious consideration to government-run universal health care or in partnership with the private sector. Ultimately, the voters will have their say on this at the ballot box in 2024 or 2028. But let’s at least try to give the free market a fighting chance to resolve these systemic problems.
In the end, we must be realistic about the prospect of government intervention. The federal bureaucracy cannot be trusted to do an efficient job paying the nation’s health care bills or managing the system. Look no further than the disastrous website rollout of the ACA, as well as countless other examples of wasted and inefficient use of hard-earned taxpayer dollars. Health care is complicated, and thus, I believe it’s best fixed by industry experts vs. policymakers and bureaucrats who don’t fully grasp its complexity.
We’re taxed enough. Can the public really stomach even higher taxes to pay for everyone’s health care? I think not based on how unhealthy a country the U.S. is, which would make for a steeper financial commitment than people expect. Howard Schultz is right. A government-run solution would be unrealistic and financially unfeasible. The ACA offers a glimpse of how government intervention has struggled to contain health care costs. Then again, we have to figure out a way to reverse course because we can no longer sustain rising costs and poor health outcomes.
Whatever happens, it’s plain to see that we need a bipartisan fix, not one-sided solutions like the ACA, which passed without a single Republican vote, or any repeal-and-replace scenario that doesn’t appeal to Democrats. Common ground can be easily found in efforts to protect patients with pre-existing medical conditions and rein in the high cost of prescription drugs, which are low-hanging fruit on the money saving tree. I believe there could be many more modest reforms enacted that please both political parties if only our elected leaders would put aside the partisan rancor for the good of the country.
Health care reform is critically important to the health of our nation, which spends nearly one-fifth of its gross domestic product on medical products and services, but trails in health outcomes relative to other developed nations. Lives literally hang in the balance, so it’s vital that we make it a top priority.
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