A new prescription

In the face of proposed reforms to the delivery of health care and insurance, Congressional Republicans and conservative pundits have mounted a formidable opposition.

Needless to say, myths abound.

Former Alaska Governor Sarah Palin fired the first and perhaps most enduring shot, warning of government-run “death panels” that would deny coverage to those deemed of lesser social value. Forty-five percent of Americans believe such claims, according to a recent NBC poll.

Forty-six percent of Americans suspect that illegal immigrants will obtain coverage under proposed bills. Meanwhile, senior citizens fret that expanding coverage will entail substantial cuts to Medicare – a myth that even the AARP has debunked.

The changing political tenor and the death of Sen. Ted Kennedy, D-Mass., which strips Democrats of their Senate supermajority, have fundamentally altered the debate. Wholesale reform incorporating a public option is now most likely D.O.A.

Time for Plan B.

Despite setbacks, reform efforts must still achieve the dual goals of lowering costs while expanding coverage. This will necessitate mandates, subsidies and market reforms, rather than a public scheme.

Priority should be given to engender true competition in the markets for health insurance and care delivery.

Consider the market for hospital care, where competition is imperfect – in some cases monopolistic – because of the presence in many regions of a single hospital or hospital chain that can virtually dictate rates to private insurers.

Anti-trust legislation hindering hospital mergers and compelling providers to charge the same rates to all insurers would impel greater competition and keep providers accountable.

Likewise, Democrats must ensure that any bill provides for national insurance exchanges, which would expedite the trade of insurance plans across state lines and offer consumers a greater choice of plans that are both affordable and commensurate with their needs.

Existing public programs such as Medicare and Medicaid must establish caps on what they are willing to spend on prescription medication – setting a new benchmark that private insurers might follow and eliminating monopoly profits currently enjoyed by the pharmaceutical industry.

One need only look at countries that have taken similar measures, such as Britain or Canada, where prices for drugs are significantly lower, as a testament to their efficacy.

To further cut costs, existing government programs must move their means of payment away from the existing fee-for-service model, which encourages excessive care, toward results-based compensation. Such a model has recently gained traction and is advocated by many high-profile experts, including Dr. Denis Cortese, CEO of the Mayo Clinic, where high-quality care is delivered at relatively low prices.

Finally, true reform will require a mandate that all Americans obtain health insurance.
Currently, emergency room visits, which are both expensive for everyone and inherently inefficient, are the sole means of obtaining care for uninsured Americans. Sliding scale subsidies for the poorest of patients would grant access to primary and preventative care that could prevent further illness and stem costs down the road.

To pretend that reform will come free of cost would be disingenuous – the cost of doing nothing, however, will be far greater.