Monday, February 15, 2010

Tim Pawlenty's health care ideas

Tim Pawlenty, who is not running for president, had an Op-Ed in Sunday's WaPo with "five common-sense ways to tackle runaway health-care costs". First, I'm growing sick of "common sense" being a political buzzword. Much of policy is not common sense. It's complicated. That's why we elect people, who then have big staffs, so they can figure it out for us. Second, Pawlenty is certainly not doing this to raise the profile of his policy chops in preparation for a presidential run. Let's tackle his five ideas one at a time:

(1) Incentivize patients to be smart consumers

Good idea. In fact, there are provisions in the current bill to make insurance more transparent, as well as doing research into what treatments work best. Currently most doctors get this information from...the companies that developed the treatments/drugs/technology. Unfortunately, comparative effectiveness research has been vilified by the GOP as rationing, or the evil government telling you treatments you can and can't have.

(2) Pay for performance

Great idea, and to be honest, the current bill doesn't do enough in this regard. It would meet stiff resistance from hospitals, I would think. Of course, if this were to be proposed by a Democratic congress or President Obama, I have no doubt that it would be portrayed as a massive government intervention in the market. It remains a good idea, and I would love to see Democrats put more emphasis on reform of providers. Mayo Clinic has a salary/performance-based pay system for its doctors and it provides a very good standard of care.

(3) Liability reform

Of course, tort reform. There is some effort to address this in the current bill. Not a lot, but wonks agree that tort reform would only work around the edges, as far as cost control goes. Also, we should work to eliminate the mistakes that cause these lawsuits. In 2000, over 100,000 people died due to infections acquired in hospitals. This is unacceptable. Some hospitals have made huge strides in fighting this with very simple reforms. Providing incentives for improving that number would likely help far more than capping the amount of damages that can be awarded in a malpractice suit.(In this case, I think penalties for bad infection rates could be very effective, and hospitals would work hard to improve if it is losing them money.)

(4) Interstate health-care insurance

The House health-care bill provides for national exchanges on which non-profit insurance plans can be offered nationwide. These plans would, of course, be regulated by the government, which is anathema to the right. The exchanges would provide competition, which is the nominal reason for this demand. However, they wouldn't allow health insurance to turn into credit card companies. Credit card companies have migrated to the states with the least stringent regulations, since their cards can be used anywhere. I'm not sure that's a good idea with credit card companies, and health insurance is unregulated enough as-is. Pawlenty touts his (and my) state's great health insurance laws. Well, I doubt insurance companies would be flocking to a state that limits the overhead and profits that a company can run, as Minnesota does.

(5) Modernize health insurance

This is kind of a catch-all for Pawlenty. He talks vaguely about disconnecting health insurance from employers, which is a great idea, but which would, necessarily, mean the end of the tax exemption of health insurance premiums through employers. He also talks, of course, about eliminating discrimination based on pre-existing conditions. As I have noted previously, this only works in combination with an individual mandate and subsidies for the poor. And it is most definitely necessary, and just as definitely part of the current bill. He also wants to expand the use of Health Savings Accounts. Most places I have worked offer these, and they are a decent plan for young, healthy people. Those people don't really need help right now anyway.

He also talks about improving the information technology used by hospitals, which was actually part of the stimulus, as well as the current health care bill. He says we should reform the tax code so that individual and group purchases are treated the same way. This means one of two things. Providing a tax credit for individual insurance or eliminating the tax exemption of employer-based insurance. The latter would be a better idea, as it distorts the market in its current form. It also (as part of our weird, employer-based system) hides the true cost of insurance from consumers. Over-consumption would be less of a problem if people realized how much insurance was costing them. Encouraging healthy life-styles is a good idea, and can actually be rolled into changing to a pay-for-performance model for doctors.

So, as you can see, he really does have some good ideas. So good, in fact, that they're already in the Democratic bill! This is another indication of just how centrist "Obamacare" is. It isn't some "Bolshevik plot," but rather a very conservative take on expansion of coverage and cost-controls. Universal single-payer would do a great job at controlling costs, but liberals shelved that dream in favor of this centrist plan. So what does Pawlenty have to say about that bill?

The health-care reforms proposed by the president and congressional Democrats are meeting stiff resistance because they would take America's health care in the wrong direction. Runaway costs are the underlying reason that so many citizens do not have access to health care and that our system needs reform. Rather than focus on cost-cutting reforms like the ones I described, Democrats focused solely on expanding access -- hoping that more mandates and government spending would somehow circumvent the fundamental issue of runaway costs.

As I demonstrated above, the Democratic plan includes just about everything he wants. And it also expands coverage to 30 million Americans who don't currently have health insurance. Is Pawlenty willing to come out and say that those 30 million Americans (and the millions more that will lose coverage in the coming years) are out of luck? That's not a moral response, and more importantly, it's bad policy. The people without insurance are less healthy, since they get no preventative care. Then when they do get sick, they wait until they absolutely have to see someone, and end up in the emergency room.

At that point, illnesses which could have been caught early and treated are far more serious. The cost of their care then gets dumped on the hospital when uninsured can't pay. The hospital then has to raise its rates on those who can pay in order to cover their costs, and insurance companies raise premiums. The uninsured are part of the problem. They're not just an inconvenient subsection of poor people. Covering them is part of the solution, not an impediment to it.

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