Big Health-Care Dilemmas by Karen

¶ … Big Health-Care Dilemmas

by Karen Tumulty Time; June 5, 2009

According to Karen Tumulty's article, successful U.S. healthcare reform may depend substantially on five major issues that she characterizes as "dilemmas." Specifically, they are concerns over: (1) government takeover of healthcare; (2) the current economic challenges faced by the nation; (3) the feasibility of universal coverage; (4) defining the healthcare services that would be included in coverage; and (5) the need to reduce the costs of healthcare irrespective of other issues.

Critics of the Obama administration's stated objectives for healthcare reform warn that the concept of a government-administrated public option is tantamount to a gradual transition to a single-payer plan such as those of Canada or Britain. They also regard such a plan as likely to trigger governmental control over individual healthcare decisions as well as the demise of the private health insurance industry. There are similar concerns from medical providers that a public option could make it impossible for them to compete economically.

Those concerns seem somewhat ignorant of the fact that the public option is significantly different from a single-payer plan because it only provides an option that does not interfere with individual choice. Similarly, it seems to ignore the fact that currently, the private insurance industry extracts a 30% profit mark-up without actually delivering any medical services at all and the fact that private insurance companies now routinely make policy decisions that deny coverage to individuals to maximize profits. Meanwhile, a viable public option could, according to Tumulty, actually reduce premiums and expand health insurance availability to as many as 131 million Americans including as many as two-thirds of those currently paying high premiums for private health insurance.

Critics of the Obama administration's focus on healthcare reform also maintain that tackling this problem in the midst of the current national economic predicament is unwise. According to that view, virtually any significant reform will necessarily require substantial expenditures that are unlikely capable of complying with congressional budget rules that require any such reforms to pay for themselves within 11 years without adding to the national deficit.

So far, suggestions for funding healthcare reform include taxes on tobacco products, soda, and junk food, because choices to consume those products contribute so much to preventable diseases. Other similar ideas include taxing the healthcare benefits currently provided by private employers. While both of those suggestions make sense, the author seems to ignore the tremendous savings that would result just from eliminating the excess insurance company profits that inflate healthcare by a full one-third. By comparison, Medicare and Medicaid (while frequently criticized for inefficiency) operate at approximately one-tenth of the direct cost of the healthcare services they administrate.

Insurance mandates are another important consideration in connection with proposed healthcare reforms. Tumulty references the Clinton administration's failure to achieve universal healthcare coverage largely because of the insurance mandate issue. The principal fear is that employer mandates would trigger the collapse of many small businesses (in particular), as well as increase the national unemployment rate. On balance, it would seem that the opposition has failed to explain exactly why individual healthcare insurance mandates could not be implemented by state law, especially with appropriate waivers based on insufficient income.

The fourth dilemma outlined by Tumulty relates to the difficulty of defining health care coverage and criteria within the universal coverage concept. Admittedly, doing so requires complex analyses and decisions, but that may very well be preferable than the current situation. Specifically, today, equally complex analyses and decisions are left to the private insurers who have a profit motive and an obvious conflict of interest.

Finally, Tumulty addresses the need to reduce the cost of modern medicine. The author correctly points out the importance of reducing the funds and other resources wasted under the current healthcare delivery model. She also accurately states the fact that the fee-for-service model used in the U.S. is tremendously inefficient and wasteful. Regardless of the resolution of other important dilemmas, it seems relatively clear that successful healthcare reform will have to adopt a results-based compensation concept similar to those that have been so successful in Britain and elsewhere.