Progressive World Review

        A Manhattan Institute article by Regina Herzlinger weighs in on the battle between Democratic Presidential candidates Clinton and Obama’s, healthcare proposals, arguing that either plan will fail to bring Americans affordable, universal healthcare,

As Hillary Clinton and Barack Obama continue their battle for the Democratic presidential nomination, they also sustain a debate over what constitutes universal health care. Obama says Clinton’s “mandated” health-care plan is unaffordable for working-class Americans; Clinton says Obama’s voluntary plan would leave millions uninsured.

Yet both candidates agree that affordability relies on government and big employers’ continued involvement in deciding what kinds of products and services insurers can offer consumers — and that’s their big mistake.

        Herzlinger trumpets the tired old conservative canard that in “consumer choice” lays the answer,

Instead, the candidates should step back and embrace a new way of thinking about health care: putting consumers first by empowering individuals to buy portable health coverage. Moving to a consumer-driven system will enable the universal coverage both candidates seek, because it will control costs and improve quality far better than governments or businesses can.

According to Herzlinger, consumer driven health insurance will spawn the kind of innovation needed to drive down prices while simultaneously improving care.  Using the Medicare system as a backdrop of how it shouldn’t be done, she cites a Duke University Medical Center program as a shining example of decentralized, private insurance in action,

For example, Duke University Medical Center’s innovative congestive heart failure program reduced costs by 40 percent by integrating the many providers needed to treat the disease and thus substantially improving patients’ health. But Medicare pays only for fixed-price procedures, such as surgeries or doctor visits. The result? As Duke’s enrollees became healthier and used hospitals less, Duke lost the revenues it once earned by filling those empty beds.One-size-fits-all payment systems used by massive buyers like Medicare help drive away the innovators who could lower health-care costs.

        But Herzlinger makes the classic mistake of thinking inside the box.  In her world, universal health insurance would be just like Medicare only bigger but in fact the opposite would be true.

        For starters, let’s look at two of the central problems that no flavor of free-market insurance will ever entirely solve.  First, private insurance siphons off billions of healthcare dollars in profits.  Additionally, private insurance is extremely inefficient as each insurer tries to keep track of patients and providers.  This is money that can and should be available for actual healthcare.  Second, even with additional regulation, private insurance will always seek to deny care to patients in order to protect its bottom line.

        Insurance is the one area where the free market adds nothing of any benefit to the consumer; rather it has only served to deny patients the care they need.  Insurance is very simple; everyone pools their resources (money) so as to spread out the risk as much as possible.  Insurance benefits by enrolling as many members as possible and by being as efficient as possible in its allocations.  A single payer system would be far more efficient by completely eliminating the profit taking and by simplifying the system to a much greater degree than private insurance ever could.  No more endless hours filling out endless forms for reimbursement.  And a complete end to the endless number of arbitrary rules imposed by each individual insurer as they administer their myriad of individual plans.  And by insuring everyone equally there would be a complete end to the dirty tricks played by insurers where you pay your premiums to them faithfully for years only to have them deny major claims for services on the often trumped up charges that the patient lied on their application regarding some pre-existing condition.  In fact, the whole notion of pre-existing conditions disappears with a single payer system.

        I agree with Herzlinger on one point; both the Democratic candidate’s plans are misguided, but not for the reason she states.  All of the plans, hers included, would fall far short of what’s needed because all three plans would fail to eliminate the private insurance industry.

–Paul Wilden

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