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Monday, 22 February 2010 |
Health care reform should have two critical goals: reducing costs and covering more people. To meet them, Democrats and Republicans must abandon simplistic, ideologically driven proposals that animate each party's base. Liberals cannot insist on Medicare for all, and conservatives cannot insist on markets for all, plus tort reform. Neither approach will work.
Medicare is an inherently inflationary fee-for-service system that rewards volume, not value. Market-based strategies cannot cover the uninsured or prevent some insurance companies from covering only healthy Americans.
Our existing employer-sponsored system - a pre-World War II dinosaur awaiting extinction - offers most Americans little, if any, real choice among competing insurance plans. Both parties should jettison it in favor of giving Americans better health care choices.
To do this, Congress should not micromanage people's health care decisions by imposing price controls or setting up more bureaucracy. Rather, it should introduce competition to the insurance market by creating a system of regional exchanges, similar to the one now operated by the federal government for its employees, to allow everyone the opportunity to choose an insurance plan. Then Americans would be able to shop for health insurance and pocket what they save by choosing lower-priced plans. Appropriate risk adjustment - a mechanism by which insurers who cover more sick people are compensated by insurers who cover fewer of them - could reduce the incentive of some insurance companies to sign up only the healthy.
Congress should also end the current tax exemption for employer-sponsored insurance coverage. This change would encourage people to pay more attention to the price of their health insurance. And it would provide the money that will be needed to help underwrite coverage for the uninsured.
Finally, no backroom deals - for pharmaceutical companies, individual members of Congress or anyone else.
We have a rare opportunity to lower America's health care costs, extend coverage and provide better care. What's uncertain is whether our bipartisan leadership is up to the task.
- CHARLES KOLB, former domestic policy adviser to President George H. W. Bush and president of the nonpartisan Committee for Economic Development
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