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Getting Health Reform Right: A Q&A With Jacob Hacker

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Wanted: a framework for comprehensive health reform that provides near-universal coverage, reduces costs, and fosters continued improvement in medical care. Oh - and the plan must be politically achievable. Jacob Hacker thinks he's designed a plan that fits this bill, and after a Q&A with him I've come to think he could be right.

Health reform hasn't received this much attention since 1994. Obama's approach has been to lay out overall goals and let Congress work out the details, a strategy that insiders say makes reform more likely. But Republicans are going to be cautious about handing Obama any policy victories, as we've seen from the House stimulus vote, and they'll probably stick to the free-market line when it comes to health reform. Initiatives are likely to be criticized from the left, too, if they don't dramatically reduce the number of uninsured. But the assessment has already been made in Washington that single-payer ("Medicare-For-All") coverage isn't politically achievable.

That's where Jacob Hacker comes in. Hacker is a Professor of Political Science at UC Berkeley. He's a leading health policy theorist and political commentator whose book The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream is the best overview yet on the decline of the post-World War II social contract between workers and employers.

Professor Hacker's proposal, Health Care for America, is based on two simple principles: First, that both the employer-based private system and publicly-funded Medicare are essentially working for their members. Second, that every uninsured American (or legal resident) should be able to buy into a Medicare-like public program at affordable rates, with need-based subsidies. In theory, the Hacker plan increases coverage while lowering costs in several ways: by bringing more people into a system whose costs are rising more slowly; by helping the government increase the scope and effectiveness of its design changes; by encouraging private plans to keep costs low: and by increasing the public system's leverage and reach.

The plan has been well-received across the center/left spectrum, even receiving a friendly review from Don McCanne, MD, a Senior Fellow with single-payer advocacy group Physicians for a National Health Program (PHNP). But I had a number of questions, so Prof. Hacker was kind enough to agree to an email Q&A. He was able to address many of my concerns - including economic fairness (some other plans place unreasonable burdens on uninsured working families) and the risk of dislocation within the health economy.

Health Care for America's public/private mix is an attractive option for several reasons:
  • It minimizes the risk of creating more problems gaining access to doctors who will accept the public plan (although the this problem has sometimes been over-stated).
  • It emphasizes employer mandates rather than placing the burdens on individuals first - and it limits out-of-pocket costs.
  • It leaves private plan options in place, which minimizes the backlash that would result if people lost freedom of choice. (As Prof. Hacker noted, "some people buy cars that Consumer Reports says are less reliable .. because they like how they look and drive ... and more seriously, the private plans will be able to do things like selectively contract with small numbers of providers ... some people will value these innovations.")
  • It emphasizes "medical homes" - the idea that people should have a doctor somewhere who knows them and understands their overall health needs.
  • It gives private insurers the chance to compete with the public system. If they control costs more effectively - or provide more attractive benefits - they can still win people away from the public plan.
That last point remains a subject of continued controversy. Newt Gingrich once predicted that Medicare would "wither on the vine" when private-sector alternatives became available. (Prof. Hacker caught my offhanded reference to this quote in our Q&A - although I've always suspected Gingrich's line was a subtle parody of Engels and "the withering away of the state.") But, pace Gingrich, we've now seen that private Medicare Advantage plans are significantly more expensive than the government program. Not a lot of withering going on there. But, interestingly, the Hacker plan provides the same sort of competition Gingrich envisioned - but for all age brackets, not just the one already receiving publicly-funded care.

Free-market health advocates still insist that the private sector can do a better job. It's true that private Medicare plans had no incentive to innovate, since they were heavily subsidized by the last administration. So, shouldn't conservatives support this plan? If the private sector really is a source of greater innovation than government, what better way to prove it than in direct competition? (Or, as Prof. Hacker rather drily observes, "Perhaps they will discover inner wellsprings of cost-consciousness we didn't know they had.")

Health Care for America is designed as a framework for more detailed discussion. There are issues to explore and details to flesh out. But Congress and the President need a global outline around which to frame the ongoing policy debate. The Hacker plan fills that need. And, as PHNP fellow and single-payer advocate Don McCanne observed, "It is just possible that (Hacker) may have crossed the threshold of political feasibility."

If that's true - and I suspect it is - then Health Care for America should become the framework for genuine reform.

(The complete Q&A with Jacob Hacker is available here)

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