[StBernard] Patients Over Bureaucrats

[Westley Annis]

Friends - 

Once the United States Supreme Court reminds our constitutional lawyer
professor-turned-President of the existence of the Tenth Amendment and the
limits of the Commerce Clause, thereby repealing Obamacare, the natural
question becomes, what's next?  All of the problems that existed before
President Obama, then-Speaker Pelosi, and Senate Majority Leader Reid forced
through a bill to raise hundreds of billions of dollars in taxes, cut
Medicare spending, and create yet another entitlement program we cannot
afford will still exist.

The American health care system has many well documented flaws, but reminds
me of Churchill's description of democracy as the "worst form of government,
except for all those other forms that have been tried."  Surely, our health
care system is too expensive, leaves too many families without coverage, and
is plagued by redundant paperwork and procedures.  Yet, at its best, there
is no better.  When your child or parent is sick, you don't wish they could
be treated elsewhere.  But, you might be worried about how you are going to
pay for the medical bills after they get better.

The President often promised that he would bend the health care cost curve
down, and I just wish he had succeeded, or even really tried, and had done
so in a way that maximizes our freedom.  Health care reform is filled with
confusing acronyms and large numbers, but really comes down to one simple
question: Who do we want making our health care decisions?  Do we want
doctors and their patients in charge or do we want government bureaucrats in
charge?  Since health care is such a personal matter - impacting us when we
are the most vulnerable - and also expensive - consuming an increasingly
larger share of our economy, how we answer this question may be one of the
most important domestic policy decisions we make.

President Obama has made it clear his answer involves a top down government
run approach that, as President Reagan famously said, "would have the
efficiency of the Postal Service and the compassion of the I.R.S."  I was no
great fan of the late Senator Ted Kennedy's policies or politics, but did
admire his philosophical consistency and dogged determination to get to a
single payer system.  I only wish more of our Republican members of Congress
displayed those same traits in defense of a consumer based system.  Senator
Kennedy would pursue incremental steps or huge leaps towards government run
health care, depending on the political circumstances, but he always worked
to move the system in his direction.  We need Republicans in Washington to
stop viewing health care as simply a Democratic issue and to stop thinking
they have achieved victory when they merely adopt a cheaper version of the
Democratic plan.  Over the years, Republican members of Congress have slowed
down the other side, but have not prevented government from taking over more
and more of our health care system.  Indeed, the government is soon expected
to pay for half of all health care spending, with that portion continuing to
increase.

So, what next?  How do we strengthen and improve a consumer based health
care system?  Let's consider three main purchasers of health care -
Medicare, Medicaid, and private insurance.

Medicare

The recent trustees report confirms what everyone already knows, but most in
Washington want to ignore.  Medicare is going broke, based on solvency of
the hospital trust fund, percentage of GDP spent, growth in spending versus
revenues, etc.  The program today wastes billions of taxpayer dollars each
year in fraud and waste, while trapping seniors in a system drowning in what
the Mayo Clinic once counted as 130,000 pages of rules and regulations.  Len
Nichols described the program as the federal government trying to set 10,000
prices in 3,000 counties, making the Pentagon's $400 hammers and $600 toilet
seats look quaint by comparison.  The Left wants to raise payroll taxes,
while Congress and the bureaucrats continue to make political decisions on
how much services should cost, which treatments are covered, and how often
patients can visit their providers.  The consumer based alternative is to
adopt a premium support model, similar to the one used for federal
employees, Members of Congress, and many in the private sector, to subsidize
the majority of the premiums paid by seniors free to choose their own health
care plan which best meets their needs.

Medicaid

The Medicaid program, jointly financed and overseen by the states and the
federal government, continues to overwhelm state budgets, consuming more
scarce tax dollars and threatening funding for schools and roads, while
failing to deliver health care efficiently.  While welfare reform continues
to stand as one of the most impressive recent domestic policy
accomplishments to come from Washington, not exactly a high bar, liberal
advocacy groups pressured Congress to inexplicably exclude Medicaid.  States
need to be freed from the D.C. bureaucracy.  The same local flexibility,
accountability based on outcomes not process, and an emphasis on helping the
poor to thrive in the mainstream that succeeded in transforming welfare will
work with Medicaid.  There is no excuse for a continued "separate but equal"
health care system in this day and age.  Democrats have blocked various
Republican attempts to block grant the Medicaid program for years, while
ignoring the pleas of governors from both parties for regulatory relief and
an end to the unfunded mandates.

At the very least, Congress should allow states to opt-in to a more flexible
long-term funding arrangement; the Obama Administration could accomplish
this through waivers, but won't.  States would receive guaranteed federal
funding, adjusted on a per capita basis to account for economic cycles, and
would agree to predictable federal funding caps set lower than current
predicted growth rates in exchange for relief from federal regulations.
States would have the freedom to design programs that best meet their
people's needs, combined with an incentive to lower costs rather than game
the system.  Instead of the federal government designing one size fits all
eligibility requirements and micromanaging benefit designs and copayment
rules, states would be required to focus on improving health outcomes for
their vulnerable populations.  At the very least, Washington should allow
states to start such a program for the able bodied populations, i.e., those
who qualify for Medicaid primarily due to income and not health status,
which comprise the majority of Medicaid beneficiaries, while considering
special protections for the elderly and disabled.

Here is a radical thought - why not free the states to focus their efforts
and spending on helping beneficiaries get better paying jobs so they can
afford their own health care and break the cycle of dependence?  Why not use
more Medicaid spending to subsidize private coverage, rather than building
public bureaucracies, as a transition to the independence envisioned in
welfare reform?

Private Coverage

The American health insurance marketplace simply does not work as it should
today.  It actually does not resemble any reasonably functioning insurance
system.  The idea of insurance should be to pool risk over large populations
and time to protect individuals against unpredictable and potentially
overwhelming risk.  Obviously, different people with different income,
assets, and medical conditions will have different levels of overwhelming
risk.  Yet, health insurance, especially individual coverage, today often
effectively screens out the sick, offering coverage when we least need it,
and too often simply offers prepaid health care coverage.

A good way to understand the failings of the marketplace is to compare
health care insurance with other insurance.  For example, most of us don't
file claims with our auto insurers for every ding our car doors get in the
parking lot, knowing the resulting increase in premiums and hassle in
paperwork aren't worth the payout.  We either pay to fix the car door
ourselves or live with the scratches.  Yet, we have been trained to expect
first dollar coverage for minor procedures, while more and more employers
and plans are capping coverage with episodic, annual, or lifetime limits.
Also, most of us aren't frustrated at the end of the year that our homes
haven't flooded or burned down, expecting refunds for our property insurance
premiums.  We don't set fire to a bedroom at the end of the year to ensure
we get our money's worth!  Yet, many patients flood their doctors' offices
or refill prescriptions early towards the end of the year once they have
exceeded their deductibles, determined to get their money's worth.

Part of the problem is that our health insurance system has evolved over
time almost by accident in response to wage controls, tax policies, and
other pressures so that most Americans get their coverage through their
employers.  The resulting subsidy and economies of scale are important
benefits, but it is time to modernize our health care system since neither
the status quo nor the President's prescribed fix is acceptable.

Just as technology is transforming our society and empowering the
individual, our health care system must also evolve from a top down
approach, run by either insurance or government bureaucrats, to a bottom up
system where patients make decisions.  We need more transparency, where
individuals have access to pricing and easily understandable and comparable
outcomes and quality data via the internet and also have portable electronic
health care records, so that patients can easily navigate what could
otherwise be a confusing, potentially scary, and highly technical array of
options.  Consumers should share in the savings of best practices and have
more, not less, access to health savings accounts and other tax advantaged
financing mechanisms that reward them for seeking care in cost-effective
settings, reducing the likelihood of chronic disease, complying with medical
regimens, and applying savings towards future health care costs.  Insurance
must be made portable across state lines and jobs, and accompanied by
policies that reduce the dangers of adverse risk selection with the least
amount of intrusion into the markets and our lives (e.g., reinsurance,
high-risk pools, fixed open enrollment periods).  Consumers, including those
working for or owning a small business, must have the opportunity to
purchase coverage through voluntary pools, whether through trade
associations or churches or unions or whatever, to enjoy the same benefits
of scale currently offered to those receiving care through large employers
or the government.  Payment should be for performance, not activity,
rewarding integrated networks offering coordinated care, disease management,
and preventative care.  Frivolous lawsuit reform is a critical component of
a reformed health marketplace that will save billions of dollars while also
reducing overutilization.  Finally, those needing help to afford their care
should get that help via refundable tax credits to subsidize the cost of
private coverage rather than building another government-run health plan.

Churchill also said about the American people, "We can always count on the
Americans to do the right thing, after they have exhausted all the other
possibilities."  With Obamacare, we have certainly exhausted all the other
possibilities; now is the time to do the right thing and reform our health
care system to empower the patient instead of the bureaucrats.

-Bobby