Things to Like About the Senate Health Reform Bill (3): A Small Step Toward Solidarity
posted by Frank Pasquale
A few short years ago, those who wanted Americans to treat medicine as just another commodity were the thought leaders in health reform. Some could afford better care, some worse; concepts like a “unitary standard of care” were becoming increasingly quaint. We were about to resign ourselves to ever more tiering of the health care system. For just a taste of this movement, turn to David Goldhill’s attempted revival of “consumer directed health care” in the Atlantic last summer.
“How [should] we pay for most of our health care?”, Goldhill asks. “The same way we pay for everything else—out of our income and savings [including Health Savings Accounts, or HSA's]:”
What about care that falls through the cracks—major expenses (an appendectomy, sports injury, or birth) that might exceed the current balance of someone’s HSA but are not catastrophic [i.e., are less than $50,000]? These should be funded the same way we pay for most expensive purchases that confer long-term benefits: with credit. Americans should be able to borrow against their future contributions to their HSA to cover major health needs; the government could lend directly, or provide guidelines for private lending.
Never mind that, as Donald Cohodes noted 15 years ago, “The need for medical care is often immediate, allowing little time for shopping around and seeking advice or alternatives.” Goldhill’s proposal is one more engine of inequality in an already lopsided society. For the frequently sick (or those with chronically ill dependents), being “out” up to $50,000 a year for care would be devastating. Meanwhile, the healthier would reap windfalls.
Visions of consumers with more “skin in the game” of health care finance entranced the Bush administration (and yes, that “skin in the game” metaphor was being used even as wealthy people in search of cosmetic enhancements were bidding away the attention of dermatologists from lower and middle class patients who worried about skin cancer). But leading legislators behind this reform effort understand the dynamic of inequality unleashed by individualist health care financing. Perhaps that’s why virtually none of them reached out to Goldhill (as of 9/09) for his advice on how to structure the bill.
By passing this reform bill, Democrats help turn the page on the consumer-directed movement’s efforts to more thoroughly “marketize” health care. Washington will commence an endless argument (read: notice and comment rulemaking and subsequent administrative adjudications) over what constitutes an adequate baseline of coverage, what is the fair share of revenue for middlemen like insurers, and what regulatory infrastructure can best vindicate the entitlements (and impose the burdens) specified by the bill. Interest group politics will no doubt distort many of these debates. But the fundamental victory of reform is a national commitment to the idea that no one should have to choose between bankruptcy or disability, suffering, and possible death when confronted with a serious illness that medical attention can treat.
Photo Credit: SEIU.
December 28, 2009 at 8:11 am
Posted in: Health Law, Uncategorized
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Responses (3)
Kevin Outterson - December 28, 2009 at 3:11 pm
I was disappointed to see The Atlantic recycle CDHC in 2009 – when even Bush couldn’t get it done with Republican majorities in both houses 2000-2006. I’ve lost respect for editorial choices at The Atlantic.
When I saw your title “Solidarity,” I thought you would blog about the provisions moving the US towards a single health risk pool. I view that as significant progress.
Frank - December 28, 2009 at 3:25 pm
Yeah, I subscribed to the Atlantic just to support the Sullivan, Indiviglio, and Fallows blogging. Sadly, I think Sullivan may have pushed the Goldhill article…or at least flogged it on his blog.
You’re right about solidarity…that needs to be “things to like–part 4″.
david goldhill - December 28, 2009 at 5:02 pm
I think you misunderstood my proposal, as well as the re-distributive elements of the current system. I am calling for mandatory, single pool, cradle-to-grave catastrophic insurance supplemented by savings accounts to cover non-catastrophic amounts. The deductible on the catastrophic policies would rise gradually over a generation to the $50,000 you reference, but only as the transfer of the massive resources currently directed to the extraordinarily costly insurance fill individual’s savings accounts. because the average family now has roughly $17,000 per year paid into this system, almost all currently insured families would get there quickly and even almost all cradle-to-grave Medicaid patients would get there in a generation.
The current system — being expanded under “reform” — is redistributive, but by shifting resources from younger, usually poorer people to older, usually wealthier ones. It also has the effect of a highly regressive jobs tax on lower and middle income people. There is nothing remotely just or fair about this system; it merely hides the massive cost burden borne by lower income Americans. Even the Obama Administration conceded that rising EMPLOYER PAID premiums were a primary cause of stagnating middle class income, yet of course then chose to expand this method of funding.
Yes, I do believe that greater involvement by consumers as payer (they already are the funders) of their own care will improve price discipline. But the Cohodes reference seems to miss how this works in practice. When price matters to consumers, providers are forced to use price to attract them (WalMart spends several billions a year in advertising just to make sure you know low their prices are). Customers don’t need to shop around when they are hit by a bus; but the greater price transparency inherent in a system where consumers are more influential assures a better price no matter who treats those injuries.
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