Republicans Do Have Ideas for Changing Our Health System; Most of Those Ideas Would Make It Worse (Joe Rothstein's Commentary)

September 15, 2009

By Joe Rothstein
Editor, EINNEWS.COM

In past columns I've taken quite a few whacks at Republicans in Congress for their “just say no” position on reforming health care.

They were deserved whacks, because neither in the House or Senate is the GOP showing any inclination to actually legislate ways to improve the nation's deeply flawed health system. Rather, Republican strategy is operating between the narrow bookends of Rush Limbaugh's “I want him to fail” and Senator Jim DeMint's “failure would be President Obama's Waterloo.”

That doesn't mean the Republicans haven't got ideas for changing the health care system. In fact, while naysayers have been shouting themselves hoarse at town hall meetings, many congressional Republicans, with scant public attention, have been unveiling ideas----a few of them not much different than Democratic-sponsored plans Republicans are trying to kill.

In July, Rep. Roy Blunt who heads up a GOP health task force, went public with a plan that includes guaranteed health care regardless of prior health conditions or other factors. The plan also provides a safety net for low income people, establishes pools to lower costs for small businesses and other organizations, and makes some needed changes in the way Medicare and Medicaid are administered.

In May, two Republican senators, Coburn of Oklahoma and Burr of North Carolina, and two Republican House members, Ryan of Wisconsin and Nunes of California, introduced a bill to set up state-based health insurance exchanges for Medicaid recipients, a concept similar to high-risk pools long in existence for auto insurance. The bill that finally emerges from Congress is likely to have such exchanges, but on a more robust and inclusive basis than the Republicans propose.

So, it's not entirely accurate to accuse Republicans of leaving the health reform playing field completely. But when you cut past the cosmetics to the bone of what the Republicans propose it's probably best that they are not playing a more active role.

The Republicans have long been wedded to private sector solutions for changing U.S. health care. John McCain ran hard during last year's election on a plan to provide tax credits and tax free saving accounts to make it easier for individuals to buy their own insurance and pay their own medical bills out of pocket. That's the meaning of “put health care in the hands of the patient, not the government.”

With tax free money in our pockets you and I would be free to shop for doctors, tests and medical facilities the way we shop for other products or services, weighing cost against quality. Health providers would compete for our individual attention the way anyone in the marketplace now tries to sell us anything.

Let's see how this might work.

As one example, let's say you start having chest pains and go to see a cardiologist (either a cheap one or an expensive one, depending on how much you feel like paying). He says you need bypass surgery for three arteries and quotes you a price of $10,000 per artery. You can either decide there and then to pay the price or you can tell him you want to get other estimates---much as you might if you were shopping for auto body repair. As an alternative, you might negotiate with him to do just two arteries, given as how the third is only 70% blocked.

Or let's say your child starts running a high fever, and looks very ill. You might call three or four pediatricians you've either used in the past or who've been recommended. You want to know who might be available, and at what price. I'd imagine the 2 a.m. rate would be higher than 2 p.m.'s, giving you the option to save money by waiting until regular business hours.

Sure, these seem like extreme extensions of the marketplace idea for health care. But they put in context one fundamental truth: We don't live in a society where needed health care is an option. An unfettered business marketplace for goods and services just isn't a good fit for health care.

The Republicans lean heavily toward a "reform" model that has individuals paying for pretty much everything health-related out-of-pocket, except for catastrophic costs such as major surgeries and long term illnesses. There, private insurance companies would cover you so you don't risk losing everything based on an accident or medical condition.

Integral to this model, they favor ending your employer's tax deduction for the health insurance he or she now provides. That would virtually guarantee an end to employer-provided health care and put the burden of buying health insurance on each individual.

Under the current system, when insurance companies negotiate price with hospitals and networks of doctors for big group policies they get up to 50% discounts from “retail.” But where does that leave those in small businesses, small groups, or those who can't get insurance at all? It leaves them having to pay up to twice as much for the same services. It's not right. It's not fair. But it's certainly one example of how the current private market for health care works right now, in practice.

And that's how it would work for individuals who lose their group plans and are thrown to the tender mercies of the private insurance companies in the GOP "reform" model.

Another change the Republicans would like to make would allow insurance companies to sell health policies across state lines. As it is now, each state regulates the insurance industry within its own borders.

For a preview of what it would be like if the Republicans actually tore down state regulation, consider the credit card industry. Years ago, Citibank moved its credit card operations to South Dakota. Why? Because South Dakota has no cap on interest rates. That's why it's now not uncommon to see 20 and 30% credit card interest----rates that we once associated with back alley, knuckle-breaking loan sharks.

Health insurance companies would follow suit. They'd move headquarters to states with the most lenient, least consumer-friendly rules and regs and sell nationwide from there. The young and healthy would probably do just fine. Everyone else would likely get sick just looking at their new rates, if they could get covered at all.

Until recently, Republicans ran Congress, and during eight of those years they did it with a Republican president. At any time they could have put on a full court press to change our health care system. It never turned up very high on their priority list.

Let's be grateful for that.

(Joe Rothstein can be contacted at joe@einnews.com)