Health Care: simple, basic, fully financed

Posted January 20, 2010

Martha Coakley's unwelcome but richly-deserved loss of the Democratic Senate seat held by Ted Kennedy has recast the debate over health care reform. Many Democratic Senators from states less blue than Massachusetts are recalibrating their commitment to the current bill. If he wants a bill he can proudly sign, Obama needs to focus the Congress around simple, high impact, fully financed reforms. He should also sue the United States Senate before the Supreme Court.

Keep it simple

Obama needs to resist calls to jam the Senate bill through the house. Both bills reflect the hubris that comes with single party rule. He should seek first to radically simplify his health care goals. Here are five reforms that even Republicans support.

1. Ban pre-existing conditions in setting coverage or pricing. Everyone understands this — and almost everyone likes it.

2. Pay for major medical. It is popular, important, and cheap. It is also simple: "any medical expense that exceeds 15% of your annual income is paid by the feds". I understand that, and I bet you do too. In a stroke, Obama addresses the scandal of medical bankruptcy. 16 years ago, even Bob Dole was in favor of this.

3. Set up free or low cost childhood immunizations and physical exams. Simple, easy to understand and the three remaining moderate Republican Senators can probably stomach it.

4. Allow for Medicare buy-in for those between 50 and 65. Simple idea: a public option for
people over 50, but they have to pay for it until they are 65.

5. Expand Medicaid to 200
percent of poverty level. A public option for the poor. We are paying for this care the expensive way now (ER visits), so expanding Medicaid makes sense. If he is feeling brave, Obama should nationalize Medicaid (take it away from the states). It's the right thing to do, and many of them would be glad to see it go.

These five steps is will not cover all uninsured citizens. They are a very long ways from liberal fantasies of single payer systems or massive delivery-system reforms. But this would be a highly respectable set of reforms for anyone to the right of Paul Krugman and would represent a lot more progress than anyone else has accomplished in sixty years of trying.

Pay for it It is important to limit the
tax-deductibiity of health insurance benefits for "Cadillac" plans and potentially also for people making more
than $200K a year. This not only generates revenue, but it is a lot better than the current plan to exempt collective bargaining agreements — a really ugly compromise. (BTW, who named high end health plans after a bankrupt gas guzzler?). The problem with high end plans is that they encourage price increases. Clinicians understandably want to set their rates based on what the most generous plans will pay. Subsidizing these plans means that we spend tax dollars to increase health care costs — a truly bad idea.

Improve the ecosystem

The paradox of the House and Senate bills is that in addition to goofy carve outs, special deals for certain states, delays purchased directly by lobbyists, and a breathtaking disregard for economics, the bills contain some intelligent and not terribly controversial provisions that could do a lot to improve the quality and reduce the cost of American health care. These should stay in the bill. They include:

1. Information standards. Medicine is an information-intensive business and the last large scale users of manila files. Nobody but the federal government can create a process for strengthening, evolving, and requiring medical information standards. This is a huge topic and a lot of work is underway, but it remains central to improving quality and reducing cost.
2. Efforts to disseminate best clinical practices. This is where the cost actually comes out. Health care is like manufacturing — reduce variability and get it right the first time and it costs a lot less. This is true across a wide range of clinical conditions (indeed the trade-off between cost and quality is as illusory in health care as it is in manufacturing). Obama should embrace funding for best clinical practices research and local dissemination modeled on the US Agricultural Extension agents a la Atul Gawande's recommendations.

3. Investment in R&D, especially low tech innovation. Again Atul Gawande is a relevant thought leader. His research and demonstration projects in multiple countries shows that simple checklists can save literally millions of lives by requiring clinicians to follow the example of airline pilots by using checklists to avoid small, catastrophic mistakes.Checklist-style process innovation may be as important to improving health care as big science technology innovation. We need to fund both.

4. Transparent pricing for all medical services. Not in the bill but should be. Prices represent fundamental information that always drives a ton of change. But you need to have visible prices for services and today we do not.

5. Convenient outpatient care. Use the lever of Medicare to promote low-cost, walk-in, Wal-Mart style clinics (which are feasible only if standardized information systems are in place) and to expand
the role of nurses, paramedics, and pharmacists.

6. Public health pandemic preparation. H1N1 was a nice test run and we got lucky. Those local clinics can be really helpful in a public health emergency.

This is not universal health care. It isn't even really health insurance reform. Plenty of people will still be uninsured. But these measures would make an enormous difference to the cost, quality and availability of health care and they would end the scandal of medical bankruptcy and coverage denied for pre-existing conditions.

Given the massively distrustful
public mood, justified repugnance at the visible corruption of the
process to date, and a feckless Supreme Court determined to create an efficient
market for politicians, Obama needs to scale back his aspirations to
something Olympia Snowe can vote for and then move on.

Sue the Senate

Meanwhile, Obama should challenge the Senate's 60 vote "requirement" or prepare to see a Congress as neutered as the California
legislature. Since changing the filibuster rules in the seventies, the Senate has effectively abandoned majority rule on major issues. A Senator with 40 votes can stop the show — you don't even need to read from a cook book or the yellow pages any more.

Super-majorities are a terrible idea, as thoughtful
political observers left and right have observed since the days of James Madison. The Constitution
allows for them only for treaty ratification. It specifically requires the Vice President to
break tie votes in the Senate, which means it disallows super-majorities. This fact alone should be grounds for getting a Senate supermajority rule designated as unconstitutional by the Supreme Court. The
politics of this is distasteful, but paralysis in the legislature is paralysis in the executive. Obama should force the Senate to revise its rules by credibly threatening a Supreme Court challenge. Hard to see the Senate regaining its footing any other way.

Update

Thanks to the Jamkid for pointing out that John Stewart has, once again, brilliantly articulated the back story.

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