Runaway Reform

The nation is embroiled in a feverish debate about how to fix our health care system -- and fix it now! Never mind that much of the system works well or that its weaknesses are largely the product of decades of well-intentioned but poorly conceived tax laws, insurance regulations, and government programs that have weakened both providers and patients. Never mind that the economics of health care have befuddled our best minds for years, or that the industry consumes at least one in six dollars spent in this country.

The Obama administration demands reform by the end of this summer, and the liberal-dominated Congress and media-academic complex seem determined to help begin the nationalization of medicine. The frantic pace of the movement for change is the product of the administration's absolute confidence that it knows precisely what is best for all of us in all matters -- and of its fear that a better-informed public might not embrace a monolithic American health system run from Washington. As with most of the Obama agenda, the president's health plans appear designed to shorten debate and incite action while the citizenry remains flummoxed and anxious because of the recession, which has nothing to do with health care -- except that job losses have emphasized one of the system's profound shortcomings.

. . .

Improving health care is an enormously complex task. But we are able to identify clearly the several major weaknesses in the system: (1) It is more expensive than it need be, although that doesn't mean good health care will ever be cheap, much less free. (2) The system makes it complicated for those without coverage to receive treatment, especially care that might prevent dangerous (and expensive) illness. But the claim that the uninsured do not receive health care is inaccurate and, perhaps intentionally, misleading. They usually receive care, though often not in an effective and timely manner. That's a serious deficiency that must be addressed, but it is a different problem from the one portrayed by proponents of a single-payer system and their allies in the media.

The system creates anxiety and suffering because (3) it relies on employer-provided coverage that can leave people suddenly uninsured, even though they have been responsible citizens who paid for insurance (often through their employers) for decades. Having spent tens of thousands of dollars on premiums as a young and middle-aged worker, only to find oneself older and uninsured after a layoff -- or fearful of losing coverage -- is not only unjust, it creates uncertainty and hardship that saps the economy of vitality and flexibility by (a) keeping workers tied to jobs they're ready to leave and (b) putting savings and financial security at risk through no fault of the individual. This flaw has become especially apparent in the past year.

The tax benefits given to employer-provided coverage -- but denied to individuals who buy their own insurance -- create a perverse incentive to push as many medical expenses as possible through a third party (the insurer) to pay for them with pre-tax dollars, thereby disconnecting the patient from the cost of care. It also retards the growth of a market for individual insurance policies. Reforming the tax code to treat all health care coverage equally can be the first, reasonably simple step in fixing health care financing.

. . .

Tax equality should be accompanied by a plan that will allow all to remain in the system once they have become paying members of the insurance pool, whether through employer-provided or individual policies. Government will need to play a role in helping to buy insurance for those who can't afford it. Medicaid, Medicare, and children's insurance programs already address much of this burden, though not always with efficiency or effectiveness. If the government is to spend more money on health care, which seems certain, the first dollars should go to those previously insured workers who have been temporarily dumped into the ranks of the uninsured.

This will require a dynamic, national market for individual health insurance, with insurance companies required to cover those who have previously bought into the system. Ideally, the government would replace Medicare, Medicaid, and other public programs with vouchers that allow older, disabled, and low-income citizens to participate in an energized marketplace and choose the coverage that best meets their needs. True private competition will help control costs, as we've seen with the Medicare prescription drug benefit.

Tax credits and vouchers would make it easier for many of the uninsured to buy into the market -- and for workers facing short-term setbacks to maintain coverage. Those who can afford to buy insurance but choose not to -- as much as 40 percent of today's uninsured, by some estimates -- would be left to deal with the unpleasant financial consequences of their irresponsible decision.

Free-market health care would rely on basic American principles: compassion, self-reliance, and innovation. Government would assist those who most need help -- and allow patients and their doctors to make the important decisions. Unfortunately, President Obama hopes to make health care a wholly owned division of the federal government. Instead of trusting the American people and private enterprise to heal a flawed system, he appears determined to import systems from Canada and Europe that have been shown to be at least as flawed as our own. Why not aspire to something better?