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Reform health insurance Changes to current system needed for better coverage, financial protection

Thirteen years after the last effort collapsed, the pieces are once again moving into place to reform the country's broken health insurance system. This time, there is broad agreement in just about every key constituency that employer-provided health insurance, as it is now configured, is too expensive, too inefficient and too unreliable to maintain. Change is possible. It must happen.

The problem is that the pieces remain in place to thwart it, as well. Insurance companies make hundreds of millions of dollars on their product. They won't just go away. The industry will do everything it can, including fear-mongering -- remember the disingenuous Harry-and-Louise ads? -- if it believes its interests are at stake.

The insurance industry also donates to politicians, whose votes are needed to reform the system. Many of these elected officials understand that the current system is dying, but some see red at any hint of "socialized medicine" even though they go home to districts with socialized education, socialized fire protection, socialized garbage collection and socialized water distribution.

And therein lies a critical point. Some things, the country has decided, are simply too important to be left solely to private markets. Those services tend to revolve around safety and health, so it would be odd, indeed, if fixing a broken system that is fundamental to the health of Americans didn't include some significant public component.

Criticism of the government health systems in Canada and Britain is common and it rises from more than a speck of truth. Canadians with the desire and money do sometimes travel to the United States for medical care. That's a fact.

But all big systems contain flaws. That's inevitable. Critics, who may harbor other agendas, are focusing too closely on them while missing the larger picture. Canadians spend less on health care and live longer. So do the British. All residents of both countries have health insurance and all are shielded from financial ruin brought on by treatment of catastrophic illness. Business, meanwhile, is relieved of a huge expense that would otherwise drain their profits. That's the big picture.

Nevertheless, it is wildly optimistic to believe the United States would make so radical a change so quickly. The country retains a strong and long-standing conservative streak and it is easier to block such an effort than to achieve it.

That's a shame because the only other solutions -- state-by-state reforms, or a patchwork combining elements of the public and private insurance systems -- are inferior. Still, a move in that direction could be an important step forward. At a minimum, any plan would need to achieve three critical goals. It must:

*Provide universal coverage that is independent of employment. The unemployed need to be covered and Americans need to be able to change jobs without worrying about losing insurance or, when they remain in the same area, changing doctors.

*Protect against the costs of catastrophic illness. The threat, and the fact, of financial calamity is one of the principal reasons to reform the existing system.

*Provide incentives for healthy living.

To that end, and to the extent that Washington is unwilling to create a true single-payer program, Congress should begin considering a system in which the government at least covers the two extremes of health care, providing a basic level of universal coverage and sharing or taking on the cost of care for catastrophic illness.

In between, to cover the area that might include specialty care and brief hospitalizations, business can continue to provide group plans purchased from private insurers. Those plans could feature pricing that accounts for lifestyle choices that influence the need for health care, and deliver other efficiencies that come naturally to private markets but which are afterthoughts to government.

Still, the problems with such a plan are evident. Insurers would argue that care is becoming too expensive and try to move a patient into catastrophic coverage. Those who lose their jobs and require hospital care might lack coverage. Those trying to buy individual coverage would be placed at an extreme disadvantage by trying to negotiate a favorable price with a multimillion-dollar corporation and lacking the advantages of group rates.

It would be much better to take the plunge and create a working, single-payer system that delivers reliable health care, consolidates billing functions instead of creating thousands of separate systems, gives the payer -- the government -- the strength to bargain advantageous rates and gets employers out of the business of health care. To be sure, such a program would provide its own set of problems, but it's not as though the current system works well, either.

The point of insurance reform, in the end, is to improve the health and economic security of all Americans, and alone, it won't do the job. Issues such as electronic record-keeping, medical malpractice reform and lifestyle choices also need to be addressed in order to produce a healthier country and reduce the costs of care.

But the insurance system is a key component of that change and, as the current arrangement continues its slide into obsolescence and the country prepares to elect a new president, it becomes ever more ripe.

MONDAY: Uneven coverage, rising costs.

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