Ideas for better health care
President Barack Obama's recent budget proposal, as outlined in his address to Congress, requested $634 billion to be set aside for health care reform. Health care reform is a topic that has been touted by many politicians with little to show for it. Due to a lack of specifics from the Obama administration, I will instead outline my own proposal for health care reform.
The problems with our system of health care are that it costs too much and there are too many Americans who lack insurance or coverage. The negative economic effects of these are something we do not have to endure and should not. Something is wrong when nearly 50 million Americans are one illness away from bankruptcy.
My proposal is to institute an opt-in single-payer health care system. This would be akin to making Medicare available to any American who wished to join. This form of system would not prevent any person who wished to keep their private insurance from doing so. It would simply give people an additional option when picking their health care provider. This proposed health care system would be similar in scope to the federal employee health care plan and would be paid for by taxes. Even though such a plan would result in higher taxes, the net result of such a shift would be positive for several reasons.
The first benefit of such a system would be reduced costs. The private health care industry is very inefficient — it has created layers of bureaucracy designed specifically to deny coverage and deny claims. These bureaucrats draw salaries that must be paid, driving up insurance premiums to levels higher than are actually necessary to provide medical coverage. By cutting these management costs, a government program could easily give customers more bang for their buck. The British single-payer health care system, which by most independent estimates provides the same level of health care as here in the United States, spends only 40 percent per person of what we do annually.
Another positive aspect of such a system is that individuals would be able to obtain preventive care. Preventive care seeks to identify and prevent health concerns in their infancy, before they become full-blown medical crises. Preventive care is more cost-efficient and better for our health. We are all taught how to look for and detect cancers in their early stages. We do this because it is better and cheaper to fight cancer in its early stages before it develops and spreads throughout the body. Because this is true for most diseases and illnesses, a shift to preventive care over treatment can save vast sums of money.
A recent provision in the stimulus package passed by Obama and Congress would set aside approximately $1.1 billion to compare the effectiveness of various medical procedures. This is an admirable goal that, if successful, would be able to save countless dollars every year. A government-run single-payer program would be best able to use this information to rein in costs.
There are economic benefits to such a system as well. Workers who lack insurance are often required to work while sick for fear of losing their job. Universal health care would allow the working poor to actually see a doctor, dentist or optometrist at minimal out-of-pocket cost. When people are healthy and happy, they are more productive. One of the reasons for American prosperity is the productivity of the American worker. No matter where on the political and economic spectrum you sit, increasing productivity is a good thing.
Further, a single-payer system would be extremely beneficial to U.S. corporations and businesses. If a single-payer system were instituted, corporations and businesses would no longer be required to set aside funds to provide insurance for their workers. This would lower costs and make U.S. businesses more competitive with their foreign counterparts. One of the big problems with General Motors is that it cannot compete with foreign automakers because it is forced to spend so much money on providing health care for its workers. A single-payer system would be a boon to business.
If every individual in the United States had access to medical insurance, this would be greatly beneficial to the entire health care industry with the sole exception of insurance companies. With more people able to go to doctors and hospitals and obtain treatment, the demand for doctors, nurses and other specialists would increase. As more people receive medication for their conditions, the demand for pharmaceuticals would increase. We would need more hospitals, operating rooms and the like, which would generate further construction jobs and so on. This new demand would come from people who previously did not have medical coverage, rather than from increased spending per patient. What this amounts to is opening up an untapped market that would generate a significant amount of demand and jobs while at the same time improving the welfare of almost every member of our society.
No plan comes without criticism and I will now address several of the objections that single-payer proposals generally encounter. The first is that government is inefficient and therefore should not enter a market that can be served by private enterprise. This sounds appealing but is false. Medicare and Medicaid are extremely successful and both are very popular with their customers. This is essentially the same government health care system that our elected officials use. If government health care is good enough for Congress and the president, then I would wager it is good enough for me. However, the claim of inefficiency is often tied to one of competitiveness.
Many people have argued that the government cannot compete against private enterprise in the free market. I challenge them to explain exactly why not. If government is actually so inefficient, then what is the risk of having it enter the market? Presumably, everyone would prefer to keep their private health care and the single-payer system would shrivel and die. However, if the government can compete, as I believe it can, then it would force the medical insurance industry to trim the fat from their business plans. If the government can provide better coverage for lower costs than private health care, then the government should be encouraged to enter the market since we would all be better off.
A third argument against single-payer health care systems is that they inherently lead to government rationing of health care. While this may be true, it ignores the fact that health care is already rationed by the number of dollars you have. It is argued that British citizens are sometimes forced to wait for medical procedures that Americans can get immediately. This is true but it ignores the fact that many Americans cannot even see a doctor at all and it also ignores the fact that France and Italy are able to provide excellent health care without significant delays. Furthermore, many Americans who do have insurance are frequently denied coverage by their insurers. People who feel threatened by the single-payer system would not be forced into it and the rest of us, for whom a single-payer system would be an improvement, have much to gain.
The final argument presented here against single-payer health care plans is specifically related to Medicare and Medicaid. It is alleged that they are going broke — current projections show that the costs of Medicare and Medicaid are expected to skyrocket. Much of this is blamed on demographics but the true culprit is increasing medical costs. If we are able to rein in continuous increases in medical costs, then the projections for Medicare and Medicaid look much more promising. Both switching to preventive care, as well as objectively comparing the effectiveness of competing medical procedures can lower these costs. And if we cannot control rising medical costs, private health insurance will also become unaffordable.
I have outlined the arguments for and against an opt-in single-payer health care system operated by the government. You must now decide whether you support or oppose such a measure.
Alexander Draine is a Rutgers College senior majoring in economics. His column, "Draine on Society," runs on alternate Tuesdays. He is a contributing writer to the Johnsonville Press.