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Health Care Change We Can Believe In

By Petrarch  |  January 28, 2010

After a year's solid propaganda, it's very difficult to believe, but it seems to be barely conceivable that Obamacare's socialized takeover of one-sixth of America's economy might, just possibly, be finally dead.  Writhe though they may, there doesn't appear to be any plausible means by which the Democrats can pass a health-care bill that even remotely resembles anything that they've been fighting for.  Scott Brown's historic election in Massachusetts looks to be, just as he said it would be, the death-knell vote; the best Obama could respond with was an anguished plea in the State of the Union for Congress to take another look and try again, which nobody is expecting to actually happen.

Being the "Party of No" has rewarded Republicans handsomely.  As effective of a tactic as "just saying no" has been thus far, it's not much of a long-term strategy.  The time has come for Republicans now to argue what they do want to see done - because as everyone knows, our current system of paying for health care is a tangled, awkward mess.

The Democrats felt that the best solution was a gargantuan monolith of a bill that would make bureaucrats micromanage every aspect of the industry.  It's hard to imagine any "solution" that would be worse than this.  There are, however, some relatively minor tweaks that Congress can and should make, which would make a big difference.

In his speech, President Obama said he wanted to meet with both Republican and Democratic leaders to get things done.  Considering his record of the last year, we're pretty cynical about this, but it doesn't matter; Republicans have nothing to lose and everything to gain by presenting their ideas to Obama and the American people.  It's time for conservatives to make their arguments, gather their allies, and see what might be doable.

Tort Reform

America hates lawyers.  Americans particularly despise rich lawyers; and worst of all are the ambulance chasers, who seek out the suffering as a way to wealth for themselves.  The complexity of modern medicine has led to a situation where almost any bad medical outcome can be second-guessed in court.  If the doctor had done this instead, or ordered that test, my client would not now be drooling in the corner as a vegetable!

There is such a thing as medical malpractice and incompetent doctors should be thrown out of the profession.  The overwhelming majority of failed treatments are simply the result of doctors doing their best but bad luck or general misfortune intervening; no true fault or blame is present.

Because we allow lawsuits for anything and grant multi-million-dollar awards, though, the cost of health care has been driven through the roof - both because of outrageous malpractice-insurance rates, and because doctors practice "defensive medicine" in which they do every possible test or procedure that could conceivably be useful so some lawyer can't catch them out.  A study by the Massachusetts Medical Society found that up to one-fourth of medical costs were caused by defensive medicine and provided no inherent benefit to the patient.  Do you suppose that reducing medical costs by a quarter would be helpful?

The solution is well-understood: instead of handling medical complaints in a trial court, have an administrative panel of experts adjudicate reasonable compensation from a government-backed pool, and in cases of genuine negligence, refer the case to the local medical authorities for revocation of the doctor's license.  This eliminates the overpaid lawyers and outrageous jackpot verdicts while still providing a recourse for those truly harmed and just punishment for the truly incompetent.

This might be the hardest change to win in Congress because the trial lawyers donate such vast amounts of their ill-gotten gains to Democrats, but it's also by far the easiest to persuade the American people of its merits.  Give vast amounts of your money to wealthy shyster lawyers like John Edwards?  Or not?  Not a hard argument to win, and a massive pile of money to save.

Health Insurance Competition

During the Obamacare debates, the far left felt that private insurance companies are too greedy and need to be kept in check by establishing a "public option": a government-funded health insurance plan that anyone can join if the private plans cost too much.  There are many reasons why that won't work - government inefficiency, overwhelming government force, regulatory capture, and so on - but the loony left did have the germ of a point: competition does lower prices, so we need more of it.

There's a trivially simple way to create more competition which also has the side benefit of being Constitutional in the very strictest sense.  Congress, exercising its power to regulate interstate commerce, can simply pass a law stating that any insurance company or plan which is legally offered in one state can be legally offered as-is in any other state.  At a stroke, this would put every single insurance company in the nation in competition with every other one, instead of having certain states be virtual monopolies.

Why does this matter?  A large reason why some states' health insurance premiums are so high is because those states have outrageously excessive minimum requirements.  New Jersey, for example, requires that all health insurance plans cover alcoholism, contraceptives, mammography, maternity, and in-vitro fertilization to name a few.  If you are a teetotaler, a male, or past the age of childbearing, you're getting ripped off under force of law.

Instead, save money and buy a minimalistic catastrophe plan from Wyoming!  We have a national market for car insurance in which fifteen minutes of your time can famously save you 15% or more.  Why not the same with your health?  Again, an easy change that would make a big difference and which is very hard to argue against - though maybe we don't want to see an overgrown lizard advertising medical plans, nor cavemen.

Decoupling Insurance from Employment

There is a good reason why many people are unhappy with their health insurance: they had nothing to do with choosing it.  Because of historical economic blunders and government interference during WWII, most Americans get their health insurance from their employers; they receive whatever comes with their job.  They don't choose what they want or need, and they don't see what it costs in any meaningful way.

Logically, each person should be able to buy themselves whatever insurance best suits their needs, like we do for cars, food, and everything else.  This doesn't happen in America because company-provided health insurance is tax deductible, whereas it's not if you buy it yourself.  This makes no sense whatsoever and is a major cause of ever-increasing premium prices.

During the 2008 campaign, one of John McCain's few really conservative proposals was to fix this imbalance.  His idea was simply to give a fixed-amount health insurance tax deduction, regardless of what your insurance actually cost or who paid for it.  At the time, Barack Obama mischaracterized and ridiculed the plan as "taxing health insurance for the first time;" since Obamacare currently proposes to do exactly that, this wouldn't be a very effective opposing argument any more.

Restore the balance in favor of individual choice, and not only will people be happier with what they themselves choose, the cost will be less.  Americans are well familiar with the benefits of wide consumer choice and rather appreciate them in virtually every other sector of our economy.

Will these three relatively straightforward changes fix all the problems with American health care?  Of course not.  There are many other problems large and small that could stand to be addressed.  But why do we have to swallow an entire horse all at once?  We've choked on it whenever that approach has been tried.

Instead, Republicans need to visibly start offering to do the job one bite at a time, with careful debate and open discussion.  Then we may actually get somewhere useful - if not now, then after November.