From yesterday’s Washington Post, this report on a new “consensus” on healthcare reform:
On the surface, it looked to be just another Washington news conference, part of the white noise of the political and policy process.
But this one was different. There, at the National Press Club, stood the president of the Business Roundtable, representing the country’s largest corporations; the president of the Service Employees International Union, the country’s most vibrant union and one of its fastest-growing; and the president of AARP, the formidable seniors lobby. They put aside their usual differences to deliver a clear, simple message to President Bush and congressional leaders of both parties:
We stand ready to give you the political cover you need for a centrist, bipartisan fix for a broken health-care system.
Or, if you refuse, we stand ready to embarrass you and run you out of office.
That’s interesting enough, if it were actually true. But I reject any claim that those three groups have the authority to speak for the nation as a whole. Only the AARP represents a sizeable portion of the nation, and that’s not enough to provide any claim to policy making. Populist rent-seeking never appeared so obvious.
In my case, I’m a small-business owner. I’m only 33. I’m not in a labor union. Who’s got my voice? Me, of course, and willingly so. But this is no one’s concern. The only outcome that matters is coming up with a solution that represents 20th century forces in the 21st century. This press conference could have just as easily occurred in 1907 as 2007.
What does that consensus look like?
It starts with universal coverage, accomplished either through a mandate on everyone to purchase basic health insurance or a mandate on all employers to offer it.
That much we already know, because we think people just aren’t motivated enough (the former proposal) or that more of what we already have will fix the problem (the latter proposal). There is no need to understand why we got here. Once we have a solution worked out, we’ll find the path backwards to where we are to tell the correct story. It’s insanity.
A few of suggestions warrant consideration, and by consideration, I mean outright dismissal.
Finally, it sets a deadline for physicians and hospitals to switch to computerized health records, along with a program to provide no-interest loans to buy the necessary hardware and software.
I’m sure that physicians and hospitals have delayed computerizing health records because no-interest loans were not available. Or it could be that the economic efficiency created by the process wasn’t supported by the cost. Or maybe it’s that physicians and hospitals are in the business of providing care instead of information technology. Only in a world where universal assumptions pass as analysis for the multitude of scenarios in which physicians provide care can an outcome that a universal solution will work. Of course, it’s a lot easier to say that when you impose a no-interest loan requirement. I’m certain “no-interest” means taxpayers will pick up the cost to subsidize this. It would be important to remember that something economically-justified would pay for itself, despite the cost of interest. It’s silly to let that get in the way, though. PEOPLE ARE DYING IN THE STREET!
Hospitals and insurers would have to agree that 85 percent of their revenue would go to providing direct care, capping profit and administrative expenses at 15 percent.
Wow. Central planning at its most crass. We know what expenses should be, as well as a fair profit. There need not be a direct tie to quality here. Fifteen percent for admin expenses and profit is enough. This will not end well.
Health insurers would have to accept the obligation to sell insurance to everyone, with only modest variation in rates for age and health status.
I guess actuaries should start looking for other work. It hasn’t proven to be useful, anyway, since risk can just be ignored. What could go wrong?