Rethinking Healthcare

Universal health care is not inconceivable

Universal health care is not inconceivable

Posting in Government

Fixing costs turns out to be the key to real savings. Those who want more can always get it, just not from the common pool of funds which defines what is necessary.

Many Americans find it inconceivable that any country could provide near universal health care at a fraction of the price Americans pay to cover 80 percent of us.

If you are such a person, if you find this inconceivable, I do not think it means what you think it means. (Rob Reiner's The Princess Bride has proven a classic. From William Goldman's book.)

That is the lesson of the market.

Before the year 2000 France, now being called a model for enlightened health care, did not have universal coverage. It was a hybrid system, combining the German idea of joint management (a version of which is the new health care law) with British ideas of universality.

(Note. Some of what follows is from the book Sixty Million Frenchmen Can't Be Wrong, which was pushed on us at the Village Voice book shop on our last day in Paris.)

The French still don't cover everything. They set a fixed amount for coverage and people pay what remains. But reimbursement is available for all kinds of medication, even over-the-counter medications, so few visits to the doctor end without prescriptions being filled out.

Coverage was extended in part to reduce the influence of unions, which were clamoring for "Cadillac" plans from employers, and the result gave the state power to fix most costs.

Fixing costs -- having a heavy thumb on the buyer's side in a health care transaction -- turns out to be the key to real savings. Those who want more can always get it, just not from the common pool of funds which defines what is necessary.

Medicare, it turns out, is the key to any reform.

What critics call "forced savings" are the thumb on the scale. Expert, professional administration is necessary to keep this thumb down. The most important health care news of 2010 turns out not to be the health care law, but the President's appointment of Dr. Donald Berwick as head of the Centers for Medicare and Medicaid.

If the largest common pool -- that of the U.S. government -- can effectively squeeze down costs for our most vulnerable without sacrificing quality, then insurers can follow suit for the rest of us. The example will have been set.

The physicians who currently are trying to squeeze back by refusing to serve Medicare patients can be challenged by insurers linking their own reimbursement rates to those of Medicare.

That's the market lesson of France's experience.

The alternatives are to remove health coverage from the middle class, then engage in a death struggle to take it away from grandma and the poor, or to move toward a single-payer system like that of Canada.

The idea that individual patients can fight the medical establishment on prices is nonsense. It has been disproven by experience wherever it has been tried.

The results in any case will be political choices on what to cover and for how much, with decisions made by either government or insurance bureaucrats. But those decisions are being made today. This just makes them transparent.

It's not inconceivable. It works in every other industrial country, and at a fraction of what Americans pay for a system that only covers a fraction of us. If you call it inconceivable, I do not think it means what you think it means.

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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