My bipartisan health care solution

Buddhists steer toward the middle path. They are convinced that more harmony is found in the center than at the extremes. Today, particularly when it comes to the current health care debate, there is virtually no middle ground. Partisanship has reached such extremes that only a couple brave members of Congress will cross the aisle. Even within a party, there are ideological splits, such as between Blue Dog Democrats and The Progressive Caucus.

It may not be obvious, but I am a moderate, or at least what a moderate was before hyper-polarization began during the Gingrich revolution. Now my moderate stances are characterized as liberal. For example, I am a fiscal conservative. Lately a fiscal conservative is seen as someone in favor of restraining the size of government. I am less concerned about how big or small government should be (although I suspect we need big government because of the complexity of the problems that must be managed today), than we should fully fund the government that we have. To start, we should put our federal tax rates back to where they were in the mid 1990s. In case you forgot, our country enjoyed tremendous prosperity during those years. This was in part because we seemed to have found the right middle fiscal path. Lowering tax rates and cutting capital-gains taxes have resulted in less prosperity and huge budget deficits. Reverting to 1990s tax rates would not immediately close our deficit but it would be a step in the right direction. It was a moderate middle path, asking the rich to give proportionately more of their income, but not at the top tax rates of eighty or ninety percent that we had in the 1950s and 1960s. The rich got much richer, so they had little reason to complain but of course, they yowled anyhow.

Through all the smoke and haze on health care reform, there is a pragmatic middle ground if both sides would get off the high horses and act in the best interest of the country. (I know, what an idea!) Unfortunately, no one is really sincere about bipartisanship, including our president. All of Obama’s talk about bipartisanship is mostly for his political advantage. It’s important for him to be seen making the effort to be bipartisan because it improves his street credentials, particularly with independents. However, he knows at this moment that if meaningful health care reform is to happen it does not exist. There is bipartisan consensus on health insurance reform (for example, denying insurance companies the right to exclude people based on preexisting conditions) but this reform does nothing to solve the affordability issue or to restrain long term costs. If we don’t solve the latter real soon we could end up a second world country.

Unfortunately, we are up to our eyeballs with disinformation at this point. One example is that the claim that a “government run health care” plan to compete with private health plans will be subsidized, thus adding trillions to the deficit. As currently envisioned, this plan (which would only affect the uninsured middle class) would be deficit neutral. It would be funded through premiums and cuts/efficiencies in Medicare. Moreover, it would be required to remain deficit neutral. If costs go up then annually either premiums would rise, or benefits or payments would be changed to make sure it remains deficit neutral. On the surface, you would think that a “deficit neutral” plan would be acceptable to Republicans, who ironically now see themselves as fiscal conservatives. Yet currently all Republicans in Congress are planning to vote against it, because they say it is “socialism”. (It is curious that Medicare Part D was not considered socialism.) They also believe that some murky future Congress will lose nerve and start subsidizing the program in the order of trillions of dollars.

Republicans are correct that our government has a poor track record at controlling costs of our existing public health care plans. This lack of control is causing the deficit to explode. Granted, there are departments like Defense which are growing at very large rates. However, most of other federal agencies have been growing with inflation, if that. It’s lack of controls on entitlement problems that are driving deficits into the stratosphere. Medicaid (the health plan for the poor) was never designed to be self-solvent. After all, by definition you cannot expect poor people to pay their own health insurance premiums. So the federal government and the states jointly contribute monies, and states have some say on the services allowed in their states. Doctors already complain bitterly about inadequate reimbursement rates for both Medicare and Medicaid. In the case of Medicare, every year there is bipartisan agreement to postpone fiscal responsibility another year. In short, costs are going up in part of bipartisan Congressional spinelessness. You didn’t think all that money that AMA members contribute to their campaigns was going to buy nothing, did you?

Unquestionably, both Medicare and Medicaid are rife with abuse. Much of the abuse has to do with the fee for service model of both programs. Certainly some of the failure can be placed on administrators overseeing these systems, although in most cases it is federal contractors checking the paperwork, not federal employees. Who is committing the actual fraud? Clearly, those billing for services never rendered are breaking the law. Arguably, the whole fee for service model invites abuse because there are no constraints on doctors to limit tests, many of which are marginal value, and which are performed in their own office and push up their profits. These problems too are well documented but Congress seems loath to change it. This problem could be fixed if Medicare and Medicaid were to change and payment was based on successful outcomes for a given condition. Naturally doctors are not too happy with that approach either, as they have invested huge amounts of money in equipment on the assumption that a fee for service model will endure forever.

What I would like to see on this debate is a grand bipartisan compromise, essentially a middle path solution that, at least twenty years ago, would not have been the least bit controversial. Republicans are skeptical about the government’s ability to competently administer another health care plan. So make the government prove they can, by making approval conditional and by rolling out the program slowly. Essentially the government would have to demonstrate that it can administer a deficit-neutral health care plan that is affordable, outcome-based and that constrains costs on a small scale and then can successfully scale it up incrementally. It would be rolled out in stages over a period, say three to five years. The states picked to participate would be chosen by a lottery. Initially it would start with a handful of states, and then it would be assessed for effectiveness. If it were staying on track, it would be expanded to include more states. If not there would be opportunities to kill or fix it before it gets out of hand. A set of independent auditors would determine whether benchmarks and quality standards had been met or not. This would make us fiscal conservatives happy plus it would demonstrate the government can competently run a large and solvent health care plan that meets the needs of the insured. If the government cannot, at least we cut our losses.

In the interim, open up the Federal Employees Health Benefits Plan to those who would not qualify under the planned expansion of Medicaid. The FEHBP is definitely not socialized health care. Every member of Congress knows he can choose from a large exchange of health insurers and cannot be denied based on preexisting conditions. It won’t solve the long term cost problem of health care costs, but it could allow many more people who now need health insurance to get it while the longer cost issue gets addressed.

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