the Next Right - Health Care Challenge: Eliminate the Government as a Stakeholder

The Next Right posted on health care, and how conservative feelings/actions can be classified. Of course, this prompted discussion in comments section about what health care changes should be pursued.

I thought I would include my two cents.

To me it seems that there are a few problems with our health care system that need to be tweaked. However, coverage is not one of them. Anyone who has a problem can walk into any emergency room and receive care.

The real problems are ones of cost, portability, and choice.

Anyone who has followed the growth of Medicare knows that the government is not very good at containing costs. Politicians want to get re-elected, and want to play to their respective constituent's interests. One example: If a politician has pharmaceutical companies in their district, then they are less likely to prefer changes to the system that encourage the use of generics in formularies.

The current employer based system involves companies who choose health care for their employees based on the plan that fits their business model, as opposed to what fits an individual employee's needs.

Also, the current employer based system means that care is based on continued employment with that employer (less a brief overhang via COBRA - which can be expensive in it's own right).

Holland has revamped their health care system to go from a hybrid private pay - single pay (single pay for the lower wage earners, private for everyone else). The problems that they had were a lack of efficiency at the single payer level, and general lack of control over costs. In 2006, they went to an all private payer system. From a growth rate of costs at 4.5% above inflation the last year under the old system, the Dutch dropped to about 3% above inflation during the first year in implementation.

Besides containing costs, the Dutch system allows portability.

They have the same pool of patients as they had before the change. They have the same pool of doctors. In fact, if you want to break the changes down to the most fundamental level, what they have done is eliminate the government as a stakeholder.

I thought that the McCain plan addressed many of those issues. The household credit of $5,000.00 could be used to buy coverage for a family of five through Kaiser for $4,560.00, with a $1,700.00 deductible. This is a total cost of $6,260.00 (less co-pays). The annual out of pocket costs would be $1,260.00 (again - less co-pays), or a monthly cost of $105.00 per month. This is a lot less expensive than most family's of five pay through their mandatory contribution (read: deduction) out of their paycheck.

Of course, this isn't free, nor do we want it to be. Many economists believe that services are rendered more efficiently if the recipient is involved in the cost.

Libertarians among us may ask what do we do with the segment of the public that desires to opt out and not carry coverage. The simple answer is that person does not get the tax deduction. The more complicated situation is when that person shows up with their five year old son at the emergency room, and that son has a serious illness and - due to dad's choice - no coverage.

In a perfectly libertarian society, we would say "cash on the barrel head, or no services". In our real world society, we have to ask ourselves if we want to deny health care due to the father's choices. The answer, on a practical level, is probably not. We would need a mechanism to allow health care, as well as allow the provider to collect.


Then final question, then, is enrollment. Right now, most employer based systems offer periodic open enrollment. We could do the same for this system: once a year, people may enroll regardless of preexisting conditions.

It is not a perfect system that I propose, but then again, we are not proposing government involvement in gold plated health care. Nor should we.

If individuals desire the gold plated plan, they can purchase it on the open market. Rather, I am proposing a more cost efficient way to deliver the fundamentals, while leaving open the option of extra care for those who wish to pay for it.

I think this is important to pursue, because the single payer fans not only operate on the misguided idea that the government can deliver care cheaper than the private markets (and the private market profit margins), they also believe that a single payer system can rid health care of inequities such as gold plated plans. If you want them, you will still be forced to pay into the single payer system, and then you will have to buy your gold plated coverage fully above and beyond that.

Under the plan I have discussed, individuals can use the tax credit towards the gold plated plan, and then make up the difference themselves.

I believe that something will be done on health care, and that the type of system I have proposed gives the best possibility of using market forces to control costs, as well as giving choice about health care to the consumer. if we do not have our own proposal available as an alternative, we will be stuck with the Democrat's solution.