After Massachusetts: NOW WHAT?

Posted by David Edman in Healthcare Reform Blog, January 2010 on January 21st, 2010 | 5 Comments »

On Tuesday, the people of Massachusetts cast their votes, the process that makes America great. Their message was similar to the messages were sent by voters last November in Virginia and New Jersey. But what exactly is the message?

It’s time to change directions. Though certain elements of the health reform bills under consideration were positive, the bill’s sponsors overreached at the outset, and at the conclusion, they resorted to bribery in order to obtain votes. The bill did little to address wasteful spending and the high cost of health insurance, and instead focused on covering more people into a broken system of health insurance, thereby throwing good money after bad. It was too ideological and too partisan. The Massachusetts vote was strike three. As stated in the Wall Street Journal editorial (1/19/10), “voters are rebelling even in the bluest of states against the last year’s unbridled pursuit of partisan liberal governance.”

Yet, our economy needs, and most Americans want, health reform. So where do we go from here? There are a number of principles for fixing the healthcare system on which most people agree and are not costly, and that is where we need to focus.

3-Step Health Reform

Health reform should be incremental—break the big problem down into smaller parts. For now, I would recommend the following 3 steps:

Step 1: Simple, No-Cost Reform

Prepare a short, easy-to-understand bill that accomplishes the following:

• Elimination of pre-existing condition exclusions in health insurance contracts.
• Allow for portability of coverage when an individual leaves an employer group.
• Eliminate insurance carriers’ anti-trust exemption and allow for competition across state lines.

Step 2: Important Policy “Fixes” (No- or Low-Cost)

The next phase will be somewhat more challenging, but doable:

• Consolidate health insurance purchasing for individuals and small groups through association health plans (AHPs) or exchanges, using existing programs where possible.
• Level the tax “playing field” for purchasing health insurance—end the subsidies.
• Fix Medicare Advantage to foster competition based on cost and quality—adopt a “defined contribution” approach.
• Pass meaningful tort reform.

Step 3: Analyze and Evaluate the Impact of Steps 1 and 2

What do you think? Can we set aside partisan politics and do what is needed without adding to the country’s budgetary woes? Please share your thoughts with us!

5 Responses to “After Massachusetts: NOW WHAT?”

1. Douglas Goldstein says:

   January 22, 2010 at 6:50 pm

   Nicely stated. However, I believe that Congress will not be able to get anything done on health care reform or insurance reform. There is too much money at stake and too many vesting interests. Health care is the third rail of American politics. Both parties are out to better than positions in terms of control of the body. They are not capable of doing what is right for the country and future generations.
2. Michael Millenson says:

   January 22, 2010 at 8:27 pm

   Not so simple. First, eliminating pre-existing conditions, etc., will drive up rates for the rest of us. You and I may know that cross-subsidization is the point of insurance, but the talk show hosts and others will immediately deride it as “reform” that costs the average guy money. Meanwhile, the evidence that AHPs and cross-border insurance sales will reduce costs significantly is simply lacking, and there is much evidence it won’t. “Tort reform,” of course, is a mirage when it comes to cost reduction — again, the literature — as opposed to doctor’s emotions. Might as well campaign against “fraud and abuse,” which the public thinks is the big problem.

   Cost control requires medical care reform, not tinkering with insurance rules. Alas.
3. David Edman says:

   January 26, 2010 at 7:34 pm

   You’re right, Michael, it’s not simple, which is why we need effective leadership on these issues. Eliminating pre-existing conditions is the right thing to do. It only drives up costs if we fail to fix the currently broken health insurance system. The government needs to create the framework where insurance companies compete on the basis of cost and quality (e.g., exchanges with transparency) instead of competing to insure healthy people, which is what currently happens.

   Also, we need to understand the value of buying less insurance. We need insurance in the event of serious illness or injury (high deductible plans or HDHPs) and more self funding for lower end, routine costs (HSAs). Nobody said this would be easy, but it can be done. Education is key!!!
4. David Allen says:

   January 26, 2010 at 12:00 pm

   I like your steps, but what’s missing is addressing the big issue that is driving many people’s desire for health care reform: achieving universal coverage. There’s a lot of argument about how many people do not have health insurance, but it is certainly millions and it is probably tens of millions. It is also estimated that over half a million Americans declare bankruptcy each year as a result of health care expenses and that tens of thousands die each year as a result of lack of access to health care. In some parts of the U.S., third world parasitic diseases are emerging — with lack of access to health care a major contributing factor.

   There are two major problems with our current method of health care financing: cost and access. My opinion is that the Republicans tend to focus on cost and the Democrats on access — what is needed is honest talk about how to address both. A problem with an incremental approach is that it is hard to envision how this will address the access issue.
5. Scott Burleyson says:

   January 26, 2010 at 4:27 pm

   Isn’t so ironic how thousands of Americans can log into chat rooms, or onto blogs or websites such as this and have INCREDIBLE dialogue, discuss real facts, real data and pour their honest professional opinions onto the post but the few hundred people we have elected to represent us can’t seem to even agree on the weather outside?

   Anyway, the point I wanted to make along these lines is that I beleive that as a country when we put all the facts on the table to begin to analyze how we improve care, the access to care, the outcomes, the costs, etc. we MUST talk honestly about the cost of providing care to illegals in this country and decide how we address that problem as I beleive it to be a huge contributing factor in rising costs!