President Barack Obama has said repeatedly that he wants "ideas that work." In spite of this, leading Democrats are working assiduously on plans for health care reform that manifestly will fail.
These plans, pushed by Sen. Max Baucus of Montana and others, seek to extend coverage to everyone by mandating the purchase of private insurance, with perhaps an option to buy into a public plan. They would facilitate this purchase through an "insurance exchange," while subsidizing insurance premiums for those with low incomes.
Advocates of such plans readily acknowledge some of the key problems the country faces: the large number of uninsured, now approaching 50 million; the high cost of health insurance, with the average annual premium for an employer-purchased family policy now above $12,500, fully one-fourth of the median family income; and the continuing rise in the cost of health care itself, at two to three times the rate of general inflation.
Yet their proposed solution – a multi-payer mix of private and public plans – won't get us the health care we need. Here's why.
Mandates cannot possibly assure that everyone is covered. A recent report by the Congressional Budget Office (CBO) shows that no existing government mandate, whether to purchase auto insurance, pay income taxes or immunize children, achieves more than 85 percent success.
In Massachusetts, where a state mandate supposedly delivers "universal health care," many thousands remain uninsured. And more than a third of those with insurance are avoiding treatment because of the cost. Insurance co-pays, deductibles, and limits on coverage still keep them from the care they need.
Multi-payer financing systems involve high marketing and administrative costs. These wasteful costs presently consume nearly one-third of every U.S. health care dollar. Baucus' plan would do nothing to ameliorate this problem, and would likely worsen it because of its added complexity. In fact, advocates of this approach acknowledge it will cost us additional tens of billions more than what we spend now.
Multi-payer systems are unable to control costs. The only way to assure cost containment is to adopt a unified financing mechanism that has the leverage to negotiate lower prices (with the pharmaceutical companies, for example) and provide the necessary budgeting and planning tools needed to save money over the long haul.
Some Democrats tout the cost-saving potential of better medical information technology and better management of chronic illness. But the CBO finds that these measures are as likely to increase costs as to reduce them.
Others point to the Federal Employees Health Benefit Program as a model, but this program is merely a menu of private insurance plans. Federal employees who get sick enough to use their plans face huge co-pays in even the best plan, often leaving them owing thousands of dollars to doctors and hospitals.
Moreover, such incremental reforms would do nothing to help the growing number of Americans who are underinsured. Recent studies show that 40 percent or more of us, including those with insurance, are having difficulties paying our medical bills.
And yet most leading Democrats would have us cling to our failing private health insurance system. "You can keep what you have" is the mantra, ignoring that "what we have" is continually deteriorating or, in the current economic downturn, even disappearing.
The bottom line: these piecemeal health proposals don't really reform the system, they just add to it. They will not work. As long as our nation continues to rely on a private multi-payer insurance system, universal coverage will be unachievable and costs will remain uncontrollable.
In contrast, a unified plan modeled on our successful experience with Medicare would effectively address our problems, including containing costs. It would automatically enroll everyone. Patients would go to the doctor or hospital of their choice.
The administrative cost savings of a single-payer system would amount to over $350 billion annually, enough to cover all the uninsured and to eliminate all co-pays and deductibles. Everyone would be guaranteed the same high-quality care.
Polls show that such an approach – an improved and expanded Medicare-for-All – has wide support, including among physicians. But Baucus and others dismiss such talk, saying the time's not right.
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