By Kevin D. Williamson
Wednesday, February 06, 2019
The word “compromise” is in bad odor at the moment, and
anybody who listens to talk radio or cable-news commentary of either the
right-wing or left-wing variety knows that to say the word “bipartisanship” is
tantamount to announcing one’s intention to become a eunuch — or, the times
being as unserious and hypertensive as they are — to commit treason.
We were supposed to be practicing the “art of the deal.”
We are instead scouring politicians’ yearbooks for discrediting photographs or
cryptic messages suggestive of misconduct. Meanwhile . . . well, you know.
Is it possible to reform that which is in need of reform?
Consider the case of health care. For Republicans, 2009
was a tragedy founded on sins of omission. Barack Obama came triumphant into
Washington followed by crowds of celebrities and admirers literally chanting
his name as a hymn of praise, and his first order of business was doing
something about health care — or, more specifically, about health insurance.
Republicans responded with something less than splendiferous wit and
intelligence: “We have the best
health-care system in the world!” they insisted, over and over, dozens
of them, often using precisely the same words. Somehow, a political strategy
based on the notion that Americans like health-insurance companies proved
ineffective — surprise.
The Democrats, for their part, couldn’t quite decide what
they wanted. They talked about “Europe,” as though there were a single “European”
model of health care. Some of them talked about the British and Canadian
systems, rarely if ever giving serious consideration to the question of why so
few of those admired European countries rely on such systems (Germany? No.
Sweden? No? Switzerland? No!) or why these national monopolies produce so many
complaints among citizenries that generally support them or so many documented
failures when it comes to access and timely patient care. They thought they
were being clever by taking as their starting point a model associated with
Mitt Romney in Massachusetts — “Call us irresponsible radicals, will they?
Well, this is a Republican plan!
Take that!”
Massachusetts had looked in part to the Swiss model of
health care, which the legislative engineers behind the ACA had attempted to
graft clumsily onto existing American practice.
Naturally, it went badly. The Democrats in 2019 accuse
Republicans of “sabotage” vis-à-vis Obamacare, but if there were any saboteurs
at all, they were Democrats: Republicans just ran against the program that not
one of them voted for. Democrats designed the damned thing, and they designed
it badly: They funded it with taxes that they never intended to collect and
relied on a series of mandates toothlessly enforced.
And so here we are again. The Democrats are ready to go
the full NHS, and the Republicans remain in their preferred posture: opposition
without the responsibility of providing an alternative. The difference is, none
of them will now insist that “We have the
best health-care system in the world!” They will defend a status quo in
which they do not believe out of habit and spite.
Yikes.
***
Here’s a thought that might provide the basis for an
agreeable compromise on health care: Switzerland was the right place to look.
But the architects of the ACA took the wrong lessons.
In Switzerland, health insurance and the delivery of
health care are entirely private enterprises. There is no Swiss NHS, no
single-payer, no “public option” — none of that. Switzerland has health care
that is by European standards 1) excellent and 2) expensive. Insurance
coverage, though entirely private, is universal.
It is also heavily regulated and sustained through various direct and indirect
subsidies, and consumption is restrained not through the god-kings of political
management but through substantial out-of-pocket costs. There is a great deal
of consumer choice and competition across internal political jurisdictions — as
a result of which, Switzerland has one health-insurance company for every
100,000 residents. For comparison: In 2019, the United States is expected to
have one insurance company on the ACA exchanges for every 1.7 million
residents.
Switzerland has an individual mandate that has nearly 100
percent compliance, which is achieved through ruthless enforcement. That
enforcement is made easier by Switzerland’s extraordinary civic culture, but,
still: If you fail to secure health insurance for yourself, you’ll get a notice
from the authorities reminding you of your obligations, and if you continue in
noncompliance, they’ll just sign you up for a policy and start charging you
both forward-going premiums and retroactive premiums and penalties covering the
period of your lapse.
There is a legally defined bare-bones insurance policy in
Switzerland, rather like the ACA’s statutory minimum coverage. Though there is
no government-run insurance program in Switzerland, these programs sometimes
are described as the country’s “social insurance,” and the insurance companies
are obliged to offer them on a nonprofit basis. Premiums aren’t fixed by law,
though insurers must charge everybody the same rate; because Switzerland has
had nearly 100 percent compliance with its mandates since 1996 (it had about 98
percent voluntary coverage before that!), “preexisting conditions” are not much
of an issue. Practice varies from canton to canton, but Switzerland subsidizes
its system in two main ways: by providing direct subsidies for the premiums of
low-income citizens and by providing financial support to the hospital system
in general.
Dr. Thomas Zeltner, Switzerland’s former secretary of
health, characterized the system this way in a 2010 interview with Tsung-Mei
Cheng of Health Affairs:
In Switzerland, rich and poor share
the same insurance plans, and physicians and hospitals are paid the same fees
for rich and poor alike. But in the U.S., fees paid vary by type of insurance. Fees
for the poor in your Medicaid are much lower than fees paid by commercial
insurance.
I think that is an interesting
difference. We don’t want the poor to be stigmatized in associating them to a
specific plan. So, indirectly, we come to the same result — we help the poor —
but it makes a huge difference when it comes to personal dignity as a patient.
In Switzerland, the doctor and hospital do not even know whether you’re
subsidized or not. They get the same fee, regardless of who you are.
It is, of course, important to keep in mind that health
insurance is not the same thing as access to health care, which requires
doctors, hospitals, pharmaceutical companies, medical-device manufacturers,
non-hospital clinics and facilities, a massive financial infrastructure
providing the capital and R&D to make all that happen, etc. Switzerland has
a lot of that, but so does the United States. Our problem at the moment is not
personnel, capital, or expertise.
***
If the ACA was the Swiss model unintelligently adapted to
the United States, what might a better version look like?
What do we want? Progressives emphasize universal
coverage and benefits for the poor and middle class. (Let us set aside, for the
moment, any illiterate insistence that health care or any other scarce good may
be considered a “right” or the notion that pediatric oncologists are wicked and
predatory because they make a great deal of money.) Conservatives emphasize
consumer choice and markets. Many reasonable people of different political persuasions
can concede that the pre- and post-ACA settlements were deeply unsatisfactory
in many ways: price opacity, unpredictability, coverage and liability that
often proved too complex for consumers to understand or predict, seemingly
arbitrary decision-making by insurers, lack of choice for many consumers, a
sensation of powerlessness for many patients, high compliance costs and
transaction costs, etc. It probably wasn’t “the
best health-care system in the world!” It surely was not the best system
imaginable.
We could do something along these lines:
1) Adopt two things from the Swiss practice of insurance
regulation: First, enable interstate competition. (I’d work hard to enable international competition, too, but I’m
one of those zany libertarians.) Second, specify an intelligent, thoughtful
minimum-coverage policy and oblige all insurers to offer it on the Swiss model:
on a nonprofit basis with a universal premium irrespective of age, sex, or
health status.
2) Also adopt an individual mandate with a Swiss model of
enforcement: Coverage is an individual responsibility for adults and a family
responsibility where there are minors,
meaning those younger than 18 years, not 26-year-old graduate students. (Those
I will deal with below.) Write the regulation in such a way as to forbid the
termination of coverage until new coverage has been secured. If there should be
a lapse in coverage, then the customer will be assigned coverage and charged
retroactive premiums, penalties, and interest.
3) Simplify the collections problems implied by No. 2 by
instituting a universal premium voucher. The voucher should come to ~100
percent of the premium for the minimum-coverage policy for a median-income
household; it should grow to 120 percent of that premium for households near or
below the poverty line and decrease to about 50 percent of that premium for
households in the top income quintile. We may increase it for elderly patients.
Having learned from the experience not only of Switzerland but also that of
Singapore and Germany, we will want that minimum policy to include substantial
out-of-pocket expenses for poor and affluent alike — because direct costs are
the most effective and least arbitrary form of rationing care, and all systems
ration care. You can have a price, or
you can have your “death panels.” The bigger voucher for the poor will help
offset some of these costs without taking away their power and choice as
consumers, and the smaller subsidies for the wealthy would help to subsidize
this.
4) None of the above would stop anybody from buying or
selling insurance policies beyond the statutory minimum plan, nor would it
interfere with direct out-of-pocket fee-for-service health care, “concierge”
plans, generous employer-based or union plans, other kinds of community-based
joint-interest models, or anything else.
5) Pay for this by repurposing Medicare and Medicaid, and
other federal health-care benefits. At a total of about $1.2 trillion per year,
this could fund an average premium voucher of about $10,000 per year per U.S.
household. In 2018, the average premium for a family of four was about $14,000
a year for non-employer plans. Considering what employers already pay to
subsidize their plans — $1.2 trillion annually — this should put us pretty
close to getting coverage that is 1) universal; 2) guaranteed; 3) private; 4)
portable; and 5) separated from employment for no more than we already are
spending on health-care subsidies.
6) We repeal the preferential tax treatment for
employer-based insurance. Many, most, perhaps all employer-based plans would be supplanted by consumer-based
plans in the private market. Businesses are relieved of a great deal of expense
and hassle. People happy with their employer-based plans will not like it. But
they should be able to get comparable policies at comparable expense — or, one
hopes, better ones. And: Other kinds of group plans would then be possible.
Because of their numbers, the 62,000 employees of Coca-Cola were able to get a
pretty good group deal for themselves. There are 70 million Catholics in the
United States, 38 million members of AARP, 500,000 members of the NAACP, 18,000
members of the National Model Railroad Association, etc.
This is of course an imperfect outline. I am sure that it
contains shortcomings other than the ones that are obvious to me. But it seems
to me a reasonable starting place to pursue a compromise that speaks to the
most important substantive concerns of progressives and conservatives alike. I
welcome your thoughts.
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