Plans for Healthcare Reform, by People Not Running for President

October 24, 2008

images3.jpgCommentary by Zackary Berger MD PhD, PGY-3, Health Care Policy Section Editor 

Even in the midst of the presidential campaign, we should remember that there are a number of health care plans other than those proposed by McCain or Obama. Given the vagaries of politics, any given plan is very unlikely to be passed. Thus we should become familiar with the details of a variety of them, since any compromise will look like a hybrid of them. What follows is a subjective summary.

Ezekiel Emanuel, in his Healthcare, Guaranteed, proposes a complete reworking of the healthcare system, starting with vouchers. The voucher, provided to every American, would be redeemable for a private- or government-sponsored insurance plan whose coverage would be equal to that now received by members of Congress. This would be all paid for by a national Value Added Tax (VAT) on goods and services which would be dedicated to the health plan. Folded into this new plan would be a National Health Care board, which would implement principles of evidence-based and cost-effective medicine.

While Emanuel presents this plan as a clean slate, it suffers from the same problems as some other proposals. The cost-saving mechanisms outlined by Emanuel in his book – idenitification by an independent agency of those treatments and procedures which are most cost-effective; incentive for individuals to get the most value from the use of their voucher; inherent tax-aversion by the American public making it unlikely that the VAT would be increased, thus controlling costs; administrative savings through elimination of multiple Federal and state plans, and through competition by private insurers – are untested. For example, a number of independent observers doubt (and the literature has not borne out) that private individuals with “skin in the game” (i.e. financial incentives) do act to reduce cost. Even if cost-effective medical interventions are identified, incentive is lacking unless cost controls are mandated. It is true that the American public is loath to approve tax increases, but will they countenance a reduction in services as a result?

Another plan is the Wyden-Bennett Healthy Americans Act, a compromise with features of both the Democratic (universal coverage) and Republican (free market) approaches. The centerpiece of this plan is a tax on employers, based on a sliding scale, which would contribute a certain percentage of the cost of “basic” health coverage. This coverage would be universal, and provided to individuals (not predominantly through employers, as is now the case). People making less than 400% of the poverty level would be eligible for subsidies, and (as in Hillary Clinton’s plan) there would be an individual mandate: everyone would have to buy into the system. Robert Laszewski (of the Health Care Policy and Marketplace Blog, to whom this discussion of the Wyden-Bennett plan is indebted) says that this plan has something for everyone to like and dislike – a “common ground on health care policy.”

There are a number of other proposed solutions, from the single-payer plan based on Medicare, sponsored by Representatives Conyers and Kucinich, and supported (among others) by the Physicians for a National Health Plan, to the patchwork of health-care systems in effect in various states, from Massachusetts to California.

Any health care plan, whatever its political pedigree or theoretical foundations (market-based or single-payer) needs to meet a certain set of criteria. In 2004, the National Coalition on Health Care (a broad grouping supported by former presidents Carter, George H.W. Bush, and Ford, as well as organizations including the American Academy of Family Practice – though not apparently the AMA or ACP) published “Building a Better Health Care System: Specifications for Reform.” The document lays out a systematic approach to fixing health-care: coverage for all, cost management, improvement of quality and safety, equitable financing, and simplified administration. It is worth pointing out that all the plans mentioned in this post recognize (and, to some extent at least, deliver on) these principles – except for one. None of these plans advocates cost containment in the hard-nosed, concrete way advocated by the Coalition: “an independent board, chartered and overseen by Congress … responsible for calibrating [insurance] rates and [reimbursement] limitations that keep increases in costs and premiums in line with defined annual targets.”

It’s this last principle which might be the hardest for any plan to meet without torpedoing its chances in the real political world.

One comment on “Plans for Healthcare Reform, by People Not Running for President

  • Avatar of Eddie
    Eddie on

    A major challenge towards cost containment policies is its challenge to the market-based model of healthcare coverage. Price controls, although currently an ideal within the US healthcare system, have always been frowned upon in American politics, although we should really frown upon our nation’s relative growing lack of healthcare coverage.

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