Grand strategy on health care

Robert W. Patterson.
Robert W. Patterson.
Posted: April 04, 2013

When the Supreme Court upheld the Affordable Care Act and President Obama won reelection last year, the die was cast: "Obamacare" became the law of the land. While Republican players want to re-litigate the issue, the new federal guarantee of health-care insurance for every American family is here to stay.

Until Republicans embrace this reality - and persuade the voters that they can deliver universal coverage on far better terms - the Party of Lincoln will never sustain a comeback. In implementing insurance exchanges and expanding Medicaid, many Republican governors have come to terms with the new normal. Yet GOP members of Congress, pushed by conservative think tanks, continue to mount a rearguard action against Obamacare while advancing the notion that nothing is broken in the health-care system that free-market reforms cannot fix.

The president's health-care plan is flawed, to be sure. It imposes huge costs on employers and insurers without achieving uniform health-care pricing. It will almost certainly lead to price inflation and rationing of care, as well as many low-wage workers declining their employer's coverage because of the costs.

But that's because Obamacare is not actually about what Americans want: better and more affordable health care. Instead, it's a lot of social engineering, mandating that the public pick up the tab for personal choices like "free" birth control and abortion on demand.

Discarding Obamacare's regulatory baggage and delinking insurance from employment would be well and good, but Republican policy experts are under the delusion that the health-care sector can function as a competitive market, as if consumers can bargain with insurance carriers, mega-hospitals, pharmaceutical giants, and medical specialists. Good luck with that.

Meanwhile, retirees and near-retirees express no enthusiasm for the designs of House Budget Committee Chairman Paul Ryan (R., Wis.) to turn Medicare into a "premium-support" system, especially when such downgrading is couched as budget-cutting.

It's time for Republicans to dump their policy advisers, start thinking about the anxieties of ordinary Americans, and construct a viable health system that beats Obama at his game.

First, congressionally charter Blue Cross-Blue Shield as a monopoly to provide basic coverage to all Americans, except retirees. And grant the regulated nonprofit authority to impose payer-fee schedules on providers of routine care and services, much as Medicare does.

A utility-style Blue Cross-Blue Shield covering all working-age Americans and their dependents would offer enormous administrative economies of scale and an insurance pool of unprecedented size. By trumping state regulations, the plan would be relieved from paying for luxuries like aromatherapy, Viagra, sex-change operations, hair implants, birth control, or elective abortion. Nothing would preclude other carriers from selling supplemental insurance for medical non-necessities, purchased by individuals at after-tax rates.

Jointly funded by a modest payroll tax and shale-oil severance fees, this utility would not only replace all nonsupplemental health-care plans, but also Obamacare, state exchanges, much of Medicaid, and the State Children's Health Insurance Plan. Medicare - and Medicaid for the severely disabled - would remain in place.

Next, Republicans should transform the health-care debate by championing strategic cures to make Americans healthier and as disease-free as possible. As the polio vaccine did in the 1950s, we can bend the long-term cost curve via technological breakthroughs.

"Because Jonas Salk developed the vaccine," notes former White House policy staffer James P. Pinkerton, "we no longer worry about rationing care for people in wheelchairs or iron lungs because virtually nobody needs them, at least not for polio. That's finding savings the smart way - and in political terms, the easy way." He continues: "We should be doing the same thing to maladies like Alzheimer's, diabetes, and cancer, and delink these diseases from aging. After all, it's far cheaper to beat than to treat."

A "cure strategy" would carve out an unregulated sector of medicine, an enterprise zone shielded from trial lawyers that would unleash prevention-and-cures research with rapidity and effectiveness. And such research could generate bipartisan support. As Pinkerton writes: "Good science is the basis of great economy policy."

This threefold platform - universal coverage through a Blue Cross-Blue Shield monopoly, regulating health-care pricing, and a cure strategy - would offer a needed shot in the arm for the GOP, but even better medicine for America.


Robert W. Patterson served as a welfare adviser in the Corbett administration. Follow him on Twitter @RWPatterson or e-mail him at rwpatterson79@verizon.net.

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