Thoughts on Health Care

Yesterday President Obama and the representatives of six major health industry interests stood together at the White House and proclaimed their determination to rein in the industry's rising costs and produce reform this year. In terms of tone and a photo op, it was big news. As a matter of substance, it left more than a little to be desired.

Voluntary targets; where have we heard that before? The conventional wisdom is that the HMOs are making nice in order to avoid stringent regulation. Reducing the growth rate of increase by 1.5%, even if achieved, would leave that rate of increase above inflation, and thus still unsustainable.

For a new system to be credible it must first be universal. People cannot be left without access to coverage because they are not well and thus unprofitable for someone to insure. Three things are needed in whatever plan emerges. One is that there must be a public component in the mix. Another is that outcomes rather than just treatments must be incentivized. Finally, people must have a choice of physicians.

From his days as a candidate Obama spoke of a system in which people could join a public-sponsored plan or keep private insurance. Powerful interests will try to scuttle the public provision. They must be resisted if the new system is to accomplish much. On the surface one would think their belief in the innate superiority of privatism should make them welcome and even relish competition with a government-paid program. The fact they are so afraid of it and will try to kill it is clear evidence of their belief in the contrary. They know a system like medicare will save consumers, be they the public as an entity, individuals or business. Once in place such a system will likely gain the majority of the national business. If such is not included in the overall plan it will be clear evidence that business as usual has won the day.

Enormous improvements in cost and public health can be achieved by incentivizing outcomes rather than tests and treatments. For instance, British doctors get a bonus when a patient stops smoking. There could be similar incentives for when patients lower their cholesterol or reach or maintain a healthy weight for their height. These are the kinds of intelligent ideas that will cost a little up front but save much larger sums down the road in treatments for serious diseases and conditions.

These, then, will be the hallmarks of a plan that brings America into the modern world. No first-world nation should have one-sixth of its citizens uncovered for medical care or have medical expenses as its second leading cause of bankruptcy. Former Vermont Governor Howard Dean's organization, Democracy for America, is leading the campaign to make sure a public component is included in the new health care mix. To register your support click here.