Rethinking Healthcare

Republican health care could be done

Posting in Sustainability

These Republican ideas can be engaged, assuming Republicans were also willing to engage Democratic ideas aimed at changing market incentives -- insurance exchanges, guaranteed issuance, subsidies to bring everyone into the system.

The chair of Moore County, North Carolina Republicans recently offered a summary of Republican health reform proposals.

(Picture from Icanhascheezeburger.com, your home of funny cats and funny captions to go with them.)

It's a good summary.

The proposals are, simply:

  1. Interstate sales of policies.
  2. Tort reform.
  3. Limits on pre-existing conditions.

There are some good ideas here. It's terribly inefficient to have 50 different regulators, and 50 different definitions of what is essentially the same good.

The idea of Robert Levy is limited. It does not really create a national market, because it does not provide for creating a national standard of what makes a valid policy. In other words, it lets apples be sold as oranges, even rotten apples. But we can work on that, as President Obama told House Republicans last week.

The second idea is tort reform and (Levy hastens to add) more tort reform. Limit pain and suffering damages to $250,000, in every case, adjusted for inflation. Limit attorneys to 25% of what is recovered, in all cases.

Again, there's the germ here of a good idea. Malpractice has no national standard. What constitutes malpractice, how much proof is required, and the penalties vary greatly from state-to-state, although it's the same act.

OK. Let's set a standard. And let's set a federal appeals panel, akin to the U.S. Court of Appeals in patent cases, so we can enforce that standard.

Levy's proposal on pre-existing conditions is limited, but it's in line with what the Administration proposed. The question is whether we are going to eliminate risk-rating -- costs based on the specific patient seeking insurance -- or whether we'll engage in community rating, spreading risk across the entire population seeking insurance.

The Republican proposal is a step in the right direction, but as with the tort reform and interstate competition, it's very limited. It acknowledges the problem, then offers a limited (some would argue inadequate) solution.

Now would this amount to health reform, or even health insurance reform? No. It won't cover the uninsured and, most important, won't do anything to transform present market incentives.

When the doctor who makes a diagnosis directs treatment, and especially when that doctor is a part-owner of the facility doing the test or treatment, there is no incentive to limit costs and every incentive to raise them.

When people are only treated when they're sick, when there is no pot of money inside a policy to sustain wellness, and when people don't have access to the data they need to stay well, there's also no incentive to limit costs.

But these Republican ideas can be engaged, assuming Republicans were also willing to engage Democratic ideas aimed at changing market incentives -- insurance exchanges, guaranteed issuance, subsidies to bring everyone into the system.

Unfortunately I have not heard of any Republican, here or elsewhere, willing to engage in this way. And with a super-majority apparently necessary for any health reform to pass, Sisyphus will once more see the rock roll past him, back to the bottom of the hill (or in this case the pond).

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Dana Blankenhorn

Contributing Editor

Contributing Editor Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta. Follow him on Twitter. Disclosure