I decided to take up the intellectual challenge of designing a health care reform package. Yes, I finally put together an answer to the perpetual question, “what would you do?” I’ll explain in a minute. But first, let me say this: when you actually try to put a health care plan together, you soon fathom just how complicated the whole thing is. There are a lot of conflicting interests; improve one thing and you potentially cause disaster regarding something else (e.g., you can make the system fairer and more accessible to the less fortunate, but you then reduce the incentives for life-saving innovations and cost-containment efficiencies). Once you start designing an answer to the health care crisis, you soon see that there’s no way to do what President Obama says that he and the Democrats will do. Sometimes you hear people say “the health care situation is really very simple, all you have to do is . . . ” And their solutions sound good for a half-hour or so, until you think through what would could go wrong. The general answer is, a LOT could go wrong with any simple solution to the health care crisis in America.

The first principle of my own reform plan is HONESTY. I would tell America this about my plan: it would seek to control costs, maintain affordability, and guarantee access to health care for everyone while fostering personal freedom, a range of consumer choices, and incentives to continue developing new life-saving drugs and other treatments. But it will NOT guarantee that anyone below the $100,000 income limit will get medical coverage at least as good as they have today for not a penny more. It will not insure that everyone can keep their present insurance plan and doctor if satisfied (which around 80% of people are). For some people, perhaps many people, it might mean additional financial burdens in terms of medical care payments, insurance fees, or taxes.

I can reasonably claim that in the long term, more people in America would get better health care and that better drugs and treatments would continue to become available while cost growth would be reigned in. But I couldn’t deny that in the short-run, there would be some who would be worse off financially, including working people in the middle class. And I cannot claim that my plan will provide the less fortunate with the same access to high-tech therapies that would be available to the rich. They certainly would be better off, probably much better off, than they are now with regard to medical care. But there will still be inequities; it’s just a part of an overall compromise.

(So you see why it’s best that I stayed out of politics; I surely wouldn’t last long in today’s political environment.)

OK, here’s my plan: the federal government raise taxes enough to give every adult and child with a SSN a voucher good for about $8000 per year, as to go out and buy a health care policy in a competitive nationwide exchange market. There would not be a “public option”; you would buy your coverage from a for-profit insurance company or a non-profit co-op. (People over 65 would retain their Medicare plans; I wouldn’t want to shock them with all this change.) If you don’t use your voucher to buy a plan but show up in a hospital or other facility needing care, you would then be assigned randomly to a private carrier, so that the facility could get paid. You could NOT sell the voucher or trade it; it would only be good for you.

The rich, the poor, and the in-between like myself would all get the same $8000 voucher. So there’s the universal-access feature, the semi-socialist aspect of my plan. However, there would be some rugged-individualism too. The rich and middle class would be allowed to buy supplemental extra coverage, as now exists for Medicare. My plan would be totally honest — the insurance that your voucher buys is SUBJECT TO RATIONING at some point. You are NOT going to get every last thing your MD could think of to keep you alive. If you want that, you have to pay extra for it. In the old-fashioned capitalist tradition, people with more money will live better and longer lives. But if you’re poor and presently don’t have ANY insurance, you’re still a lot better off; you can at least see a regular doctor when you want, and have common stuff like hypertension and backaches and asthma and diabetes treated (and thus stay out of the emergency room!). Again, my plan doesn’t work miracles; it tries to make most things better, but it can’t satisfy every concern.

Given the community rating features, young people would generally hate my plan (“why should I pay more taxes for a health care voucher that I don’t need?”). Too bad. They need to be reminded that some day they will be old and will be subsidized by healthy young people, same as with Social Security.

Obviously, I’d bring to an end the tradition of health care being provided by employers. The time for that arrangement is long past (how would you like it if you could only get a car or a cell phone from your employer, and you had to take whatever model and features your bosses pick out?). Employers currently providing health coverage would have to give every covered employee an immediate salary raise based on what they were paying per employee for coverage. But employees could now be taxed on that increased pay. And that tax would go to help cover uninsured people.

However, this clearly wouldn’t be enough. Increasing taxes on the rich wouldn’t fill the gap either. The middle class would feel a pinch in increased taxes. But that pinch would not become a bite; hopefully, for most taxpayers, the increased pay that you take home (since your employer has to give you what they formerly paid for your health coverage), and the value of the $8000 voucher for you and your kids, would mostly balance off the increased taxes. But admittedly, some people would be quite unhappy with the new arrangement, despite the new choices that it would allow and the security that it would bring (e.g., if you lose your job or start your own business, you don’t have to worry about losing your health care; you can count on that yearly voucher from the government). Obviously, the working poor come out a good bit better, since their taxes hardly go up due to the progressive tax rate structure.

To further the interest of fairness and universal access, there would have to be community rating, so that the young and old, male and female, would be charged the same base rate by each insurer. Obviously, pre-existing condition restrictions would also be outlawed. If you’re totally healthy or have cancer or need dialysis, same rate. But, in the interest of free-market efficiency, there would still be many custom options and room for innovation by the insurance sellers, including the option to get up to 20% rebated to you if you agree to cost-limitation incentives, including bigger co-pays and health savings account arrangements.

At the same time, there would be many “minimum standards” for whatever policy an insurance company sells you. You couldn’t buy “disaster only” coverage (as the hard-core conservatives demand). We want to encourage people to use basic health care, as to prevent early-stage problems from festering into expensive emergency room situations. To John Stossel’s chagrin, my plan would including at least 2 free doctor visits per year, maternity benefits, well-baby care, alcoholism treatment and mental-health services. That’s the basic public-health stuff that can probably save money, when you add in the costs of worker productivity and lost work days. However, as said above, the plan will have “cost/benefit” limitations as with the British and Canadian health care systems.

Let’s say you get a rare form of liver cancer, where general treatment gives you a 1/3 chance of survival,
but Sloan Kettering has a new procedure that costs millions but raises your chances to 2/3, and only Sloan Kettering knows how to use it. Well, too bad, unless you’re rich enough to have bought an optional policy that allows coverage beyond what the federal cost-effectiveness regulations would allow. Those regulations are going to be written by panels of experts (e.g., the Health Benefits Advisory Committee and the Center for Comparative Effectiveness Research proposed in HR 3200), and the cost-versus-value decisions those panels make in writing those regs will have life-and-death implications. So, those federal commissions will amount to “life and death” panels, or “death panels” for short (although they won’t make case-by-case decisions, as Sarah Palin imagined).

My health plan would subsume both forms of cost containment. From the GOP side: TORT REFORM. I would include severe limits on the right to sue doctors for malpractice. I’m sorry for upsetting John Edwards and the tort lawyers campaign-funding machine; but big malpractice awards clearly make doctors order too many tests and defer patients to hotshot, high-price specialists. But as I just said, there would also be the federal research panels proposed by the Democrats, to study the “value” of procedures and select authorized treatments based on cost-effectiveness. If the tort limitations work as they should, perhaps those death panels could lighten up a bit and allow a few more speculative / high-cost treatments; perhaps they could avoid doing what the British NHS recently did, i.e. restricting the use of an expensive anti-blindness medication until a patient has just about lost sight in one eye.

That’s the rough outline of an Eternal Student’s Health Care Reform Plan. You can poke holes in it, but that goes for ANY plan; Obama’s plan is also swiss cheese. My plan gives something to both the GOP and the Dems. But of course, it would be DOA, politically. It would involve too much change in how we obtain health coverage and health care, and would thus stir the hornet’s nest of special interest opposition, while not getting any shelter from the common man and woman who are afraid of such change (and its increased tax burden).

You might argue that the current reform plans in the House and Senate do much of what I envision here. However: 1.) they don’t offer serious customer choice, as the GOP wants; 2.) they don’t include serious cost controls other than via the death panel mechanism; and 3.) my plan is HONEST and up-front about changes in procedures and increases in taxes; the plans now being fronted by Obama and the Dems ARE NOT. The outrage at the town meetings this past month show that many Americans have become aware of this. Despite Obama’s wonderful speeches, the polls show that only about one in four think they will be better off if his plan passes (about a third think things will be worse, and the balance say about the same or won’t venture a guess). And thus, the President’s quest for a better health care system may in the end not get too much farther down the road than my own plan will.