Thursday, January 26, 2006

Health Care Reform Proposals

The Bush Administration has been getting some coverage lately on the topic of reforming Health Care through – you guessed it – changes in the tax Code. Expanded Medical Savings Accounts and increased deductibility for health care costs by consumers are among the proposals designed to make health care more consumer driven. (As previously discussed, this may also diminish the employer-provided option’s hold over the healthcare delivery system.)

A story in today’s BNA Daily Tax Report highlights two democratic senators’ responses. Hillary Clinton summarizes these proposals, about which we will hear more in the upcoming State of the Union Address, in three words: “on your own”. Max Baucus also criticizes them as being flawed, in part, because “people will still be paying the bills.”

Clinton and Baucus are correct that these kinds of proposals will not necessarily expand health care coverage or deal with high costs. But their resistance to personal responsibility in matters of paying for important services is a strong indication of their general political preferences toward less choice and more government control.

Let’s understand something. We are paying the bills now. We just do it through a labyrinth of insurance companies and government entities that, in a mystical sort of way, ultimately allow medical professional to do their thing and to provide first-rate care. (If you don’t think your care is first-rate, then you have a choice of going to another doctor. I suppose you have that choice in Canada, but then again you may have to wait a few months for the privilege.)

We also have scarce resources. Moving us toward a model with greater responsiveness will help to allocate them better. Queuing also provides an allocation method, but frankly I don’t think most people prefer the egalitarian queue approach. For one thing, it limits your freedom. It is also counterproductive. (Productive people standing in line do not generate revenues to support the overhead in this country.)

Solutions like these don’t resolve the difficult problems of delivering health care to all segments of society. But focusing only on their failings diminishes the potential for the good they can accomplish at the margins. Too often political leaders want to make points about what the other guy's approach doesn't do. And often they are right - they are not doing enough. But that is not a sufficient reason for opposition. Here, opposition is based on a fundamental difference in what health care should look like.

P.S. On the recent Canadian elections, I hope to hear from my colleague Dr. Clark. One thing I am wondering: With the liberals out and conservatives in, will this bring back all of the folks who threatened to leave the country after the last elections? Oops – I forgot. They only threatened to leave.

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