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May 25, 2005

Selling Health Care

Matt and Kevin tee off my HSA post below with some thoughts on long-term political strategy. Their main point, which is probably correct, is that negotiating with ourselves doesn't make sense. As Matt says, the onus should really be for GM and Ford and the insurance industry to come to us and admit that health care is crumbling, and then we can all meet in the middle and figure something out. Kevin makes the point that, as a bargaining principle, you should always start hight (single-payer with all insurance industry execs thrown in jail) and then negotiate downwards as time goes on. Don't start down and hope to negotiate up.

All true on the political front. But I worry that Matt and Kevin are too sanguine about the death of private health care in this country. The move towards HSA's and consumer-shouldered risk, much like the migration towards PPO's, will begin to bring down costs for the country's major businesses. Indeed, the reason that GM and their friends are having such trouble is the high rate on unionization among their work force, which makes cutting health benefits much tougher. Others will simply shunt the costs onto their employees and call it a day. But it's not certain that businesses won't figure out a way to dodge costs and burden workers, thus guaranteeing their own survival if not a healthy society. Beyond that, the insurance industry will never come to the table and admit that health care is failing because every other option requires a radical and painful restructuring of their businesses, if they survive at all. So I wouldn't count on them as allies, well, ever (indeed, anything that they ever would ally with us on is probably a bad option anyway).

As a last point, I fear the liberal consensus on health care is much more amorphous than Matt and Kevin may think. Kevin refers back to CATO's Leninist Strategy for reforming Social Security as a model. That document, you'll remember, was a 1983 playbook for how to privatize the program, and indeed, it's been followed to the letter. But that's the important point -- the strategy contained a clear and concise plan for what they wanted to do to the program. Liberals don't really have that yet. Some of us, myself included, want to expand Medicare. Some want a government takeover of health insurance. I think Matt wants to expand Medicaid. Some want to universalize FEHBP. Some want Clinton Care. Some want a Japanese-style employer system. And some, like Mark Warner (if the books he blurbs are any indication), are friends of HSA's.

We do need a clear idea of where we want to go if we're to win the health care battles when the fight once again joins. That, in large part, is the lesson of 1994. Clinton didn't know where he wanted to go, he spent valuable time figuring it out, he came up with a plan no one understood (I read 650 pages on the damn fight and I still can barely describe Clinton Care), and then the forces that be demagogued it. Next time around, we can't spend so much time fiddling around policy shops. We've got to have our ideas primed and ready.

By the by, I wouldn't suggest my plan below gets pushed, it's more of a thought experiment for how progressive HSA's work. Medicare for All is my preferred starting point, and then we can reform it in ways that'll attract conservative votes. Some elements of HSA-style competition will probably be necessary when doing that, so which elements we're willing to accept is the sort of thing we should probably figure out.

May 25, 2005 in Electoral Politics, Health Care | Permalink


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I agree that I (and perhaps Matt) may be too sanguine that employer-based healthcare is doomed and we just have to wait for everyone for to admit it. I do believe that (although there are other factors working here as well), but the point of my comment about the Leninist strategy is that we shouldn't just wait around, we should be active about pushing a plan. However, the plan ought to be a good one, not a bunch of half measures.

I could still be wrong about all this, of course, but that's what I meant.

Posted by: Kevin Drum | May 26, 2005 2:31:06 PM

The move towards PPOs has not actually decreased the cost of health insurance to business - it was mostly a backlash against the problems of the HMO model - denied services/long waits to see providers/little selection of providers. The move towards more cost sharing and restrictions on benefits has somewhat reduced the burden on employers but with costs going up 10-15% a year there is only so much that can happen and only so high of out of pocket maxes that people will accept. There's lots of work going into tiering networks based on efficiency and cost and having more cost share differentials and steering people to the efficient providers but that too only gets you so much without in some way fundamentally changing the ways doctors practice and the incentives/information that they have. I could be wrong but I predict that there will be a backlash against the HSAs or few employees will choose them.

Posted by: Rebecca S | May 27, 2005 4:33:47 AM


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