Wednesday, July 22, 2009

Healthcare Reform

I listened with great interest to President Obama’s health care speech tonight. No domestic issue more concerns me at this time. Economic recovery, education, and mass transit are all very important, but now is the time to focus on meaningful change to our health care system.

Any reform, however, should address coverage qualities currently lacking, particularly accessibility to all, portability, and economic viability. First, universal accessibility should be achieved. Health care should not be rationed based purely on ability to pay. Objections of fairness aside, most Americans could easily find themselves one bad day away from being cut off from essential medical care. This is a utilitarian argument. Second, our access to health care should not be contingent upon employment. Keeping my health care even if I lose or change my job would greatly enhance my ability to choose from a greater variety of employment opportunities. It would be easier for people to choose to work at small firms or non-profits if medical plans were independent of employment, adding much needed flexibility to our economy. Finally, it should be economically viable. What I mean by this is that the overall proportion of our GDP dedicated to health care should fall. Spending up to 18% of our national income on health care is far too much. Every 1% drop in that proportion frees up more than $140 billion to be reallocated to other (assumed) more productive uses. That’s more than $450 in savings for every U.S. citizen. If we spent in proportion to what Germany spends, that amount increases to more than $2,800 for every American.

Critics of the public option are again talking up the prospect of introducing more market based competition to drive value for U.S. consumers. Professors Michael Porter and Elizabeth Olmsted Tiesberg argued persuasively for a renewed effort in creating health care competition in their 2004 HBR article “Redefining Competition in Health care.” As one who believes in the power of the free market to drive better living standards, I find this position ideologically attractive. But the history of healthcare reform suggests otherwise. Attempts to introduce market based incentives have ended in dismal failure. How competitive a market is is a matter of national importance. Health care, for a variety of reasons, is not competitive. Because of this, we need government intervention and action in the form of a public plan.

I am willing to pay a higher share of my income in taxes in return for a health care system with the qualities outlined above. I am heartened by President Obama’s strong push towards health care reform. Let’s hope that he is successful in achieving his twin goals of reducing cost and increasing coverage. That would be forward movement indeed.

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  1. Hi E.C.!!

    I see you took P. Obama's call to blog about his initiative to heart, ;) .

    Okay - philosophically, I agree with your points on access, and willingness to pay a little more for universal coverage. What makes me very uncomfortable about the health care reform is the enormous spending (where, really, is all that money coming from; isn't it also deficit spending?). And although I have not kept pace with all aspects of the ongoing discussion, aren't there still gaps in the universal coverage?

  2. There are many issues with the bills currently considered. Coverage gaps and not addressing incentives which help lead to runaway costs come to mind. Yes, this is big deficit spending, but needn't break the bank. If we can make healthcare somewhat more efficient, this can lead to aggregate savings of hundreds of billions. It also has the potential to add flexibility to our economy by allowing workers greater freedom to move from job to job without losing coverage. There is too much at stake not to push forward with even flawed legislation.


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