A Better Way to Reform Health Care

I recently posted an article on the Huffington Post along with my friend, Regina Herzlinger of Harvard, describing how the Obama health care plan will decimate our economy. Many readers asked if I had a plan or if I wished to only criticize the president's proposal. In fact, I have introduced comprehensive health care legislation, the "Patients' Choice Act" along with Senator Richard Burr (R-NC) and Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA).

We believe our plan will meet the president's goals far better than the president's own plan, or the plans being floated by the president's Democratic allies on Capitol Hill. Before I explain how our plan achieves those goals and outline some of the key differences between competing proposals, the American people should realize that there's remarkable agreement about the goals of health care reform.

Republicans and Democrats and conservatives and liberals all want a health care system that is more accessible, affordable and fair. I know this to be true because I've seen it first-hand. I've worked in the health care sector my entire adult life first as the owner of an optical company then, and now, as a practicing physician. The least partisan places in America are health care delivery areas - doctor's offices, emergency rooms, neonatal and intensive care units, and so on. The American people want a system that works, and so do the vast majority of members on both sides of the aisle.

Setting the right tone in the debate is more important because the stakes couldn't be higher for individual families and the future of our country. Getting health care reform wrong won't merely prolong the suffering of families, particularly low-income families, but will jeopardize our long-term economic health. What the American people need, and what policymakers have an intellectual and moral obligation to provide, is a rational debate based on competing ideas and solutions, not the recycled demagoguery of past campaigns. If we believe the other side is wrong we should put forward our best ideas and arguments in specific legislative language.

I'm willing to give the president the benefit of the doubt and believe the best about his motives, even if the political apparatus supporting his plan isn't willing to do the same. I'm also not afraid to say that I want the president to succeed because success will mean a better health care system. I am convinced, however, that if the president isn't persuaded to change course his plan will fail catastrophically, especially if he "wins" the vote in Congress. In fact, health care could be his domestic Iraq, but worse. It's one thing to declare "Mission Accomplished" but something else to truly accomplish the mission.

Let me explain how our bill accomplishes the mission:

Today there are three major barriers to access and coverage. There is broad agreement about two causes: cost and cherry-picking - when insurance companies deny coverage to people with pre-existing conditions. The other major barrier to access and coverage are failing government programs like Medicaid that provide access to a government benefit but not access to health care. Forty percent of doctors and hospitals refuse to accept Medicaid patients because the government's efforts to impose "affordability" have been an abject failure.

On the cost front, our bill gives every American a generous tax credit ($2,290 per individual, $5,710 per family) to purchase health insurance. We do this by ending the current discrimination in the tax code that gives people a tax break if they receive health coverage from their employee but no benefit if they are self-employed or unemployed. The rules governing our current, employer based, health care system were made in the 1940's when Americans stayed in the same job far longer than they do today. Ending the employee exclusion will end job-lock and put the individual and their doctor back in charge of health care.

This is a bold proposal that would dramatically reform our health care system. We address a number of questions related to this provision in our materials but let me address a couple of common questions.

Many people ask: How will a $5,710 tax credit help someone buy coverage when the average plan costs about $13,000? That's a fair and reasonable question.

Our plan works because the employees only pay about one-third of their plan's premium. For example, the average family's annual employer-provided health insurance plan cost about $13,000 last year, with an employer paying about $8,600, while the employee only paid about $4,200 in annual premiums. Under the Patients' Choice Act, that family would have more than enough to cover their share ($4,200) and have a significant sum left over for any additional medical expenses. It's true that the funds the employer provides would now be taxable income just like salary but the point critics ignore is that the typical individual and family will still come out way ahead under our plan.

The tax issue is controversial because the Obama campaign spent millions of dollars distorting John McCain's tax proposal which also called for ending the employee tax exclusion and replacing it with a rebate. Ironically, the Chairman of the Senate Finance Committee, Senator Max Baucus (D-MT) has proposed eliminating or capping the employee exclusion as a way to raise revenue. The fact that Senator Baucus was greeted not with a barrage of attack ads, but with assurances from the White House that his option would be "on the table," shows that the attacks against McCain were illegitimate and purely partisan.

The question the American people should be asking Congress about the way our current tax code treats health care is not whether we should change it but why on earth should we keep it like it is. The current rules are terribly regressive. Today's system discriminates against low‐income Americans: wealthy Americans receive $2,680 in tax breaks for health care while the poorest Americans only receive $102.26.

We address the second major barrier to access - cherry-picking - by making it profitable for insurance companies to not deny coverage. Our bill does this in several ways. First, we set up voluntary state-driven exchanges to facilitate real competition between private plans and give Americans - for the first time - a choice of health care plans. The exchanges would require all participating insurers to offer coverage to any individual - regardless of patient age or health history. Exchanges could also set up auto-enrollment so that a 24-year-old who shows up in an emergency room after a motorcycle accident would already be covered by a basic plan. Today, we all pay for those ER visits.

Our exchanges are NOT based on the Massachusetts model, which is not working. Rather, we acknowledge the economic reality that single-payer advocates ignore: health care economics are regional, and that a one-size-fits-all mandate from Washington will fail.

We overcome the third barrier to access - failing government programs - by giving low-income Americans the means to buy insurance outside of the failing Medicaid program.

The Patients' Choice Act gives low-income families at 100 percent of poverty level an additional $5,000 to purchase coverage on top of their tax credit. In other words, a family of four at 100 percent of the poverty level would now have $10,710 to buy coverage under our plan.

Many on the left don't like to address the reality of failing government programs because it is undermines their case for the "public option." How can a system that turns away the poor 40 percent of the time by called a success and worthy of expansion? The American people should not have faith in the public option until members of Congress voluntarily enroll in Medicaid.

Instead of acknowledging the failure of government interventions many on the left like to demagogue greedy insurance companies. One problem with this argument is that the government already drives about 60 percent of the health care economy. We already have a system of price fixing and cost containment in place called Medicare that sets the prices that insurance companies and providers follow.

Of course, insurance companies are hardly perfect actors. As a doctor, I've berated many insurance company bureaucrats who thought they knew how to care my patients better than I did. Yet, it is misleading to claim half of the problem is the whole problem. Our bill deals with reality and the whole problem - the perverse incentives in government and the private market that are hurting families. Putting the individual in charge of health care is the only way to address these underlying factors that drive up costs and reduce quality and access. The third-party model lacks transparency and accountability and allows both government and insurance company bureaucrats to get between a patient and their doctor.

Our bill includes a number of other provisions that make our plan truly comprehensive. We emphasize prevention and disease management and change reimbursement rates so doctors can be paid for doing prevention. We eliminate widespread fraud and waste in Medicare and Medicaid, which is estimated to be $80 billion per year, and so on.

The point is that health care needs a new operating system, not a service patch to a broken system. Building a new "public option" on top of a failing system with an elaborate system of fines continues the 1960's idea that a little more government spending and intervention will fix health care. It's time for true innovation and change, not a Windows 1975 approach to reform.

Finally, a critical factor that sets our bill apart from the president's plan is sustainability. Our bill accomplishes these goals without spending any new federal money, or raising taxes. The problem in health care is not that we don't spend enough, but that Americans aren't getting enough value for their dollars. On a per capita basis, America spends nearly twice what other industrialized nations spend. Our responsibility is to make better use of existing resources.

The president's argument that we have to make an enormous new investment in a "public option" in order to save money down the road is speculative at best, and a recipe for fiscal disaster at worse. Every major health care program created by the government since 1960 has cost far more than originally envisioned.

In 1965, Medicare was supposed to cost $3.1 billion a year. Today, Medicare costs $455 billion a year and is headed for bankruptcy. SCHIP was established a decade ago as a safety net for poor children. Today, a family living at 300 percent of the poverty level is eligible for SCHIP.

Some estimates say the "public option" will cost $1.2 trillion but no one knows for sure. It's impossible to predict the havoc that would ensue if, for instance, the Lewin Group's study is correct and 120 million Americans lose their private insurance because private companies are driving out of business by the government plan. When faced with out-of-control costs, European countries with single-payer plans responded the only way they could - they rationed and denied life-saving care.

The president is using conservative economic arguments to sell his plan - it's about choice and competition, etc. - but he is putting forward a proposal that would have the opposite effect. Also, the American people should be concerned about the need for a government plan to keep the private plans "honest." In a free society, individuals keep the government honest, not the other way around.

The president has given Congress a firm deadline to pass a health care bill. In the next seven weeks all sides should put their ideas on the table and have it out. What is not acceptable, though, is delay and posturing. Organizing for America, the organization set up by the President's former campaign manager, David Plouffe, has asked Americans for donations to combat those who are allegedly spreading "fear and confusion" about the changes the administration seeks. I would contend that if the American people are fearful and confused the administration should look in the mirror. We are on the cusp of a major debate and neither the administration nor its allies on the Hill have put their ideas in clear legislative language.

Many on the left are obviously worried about a repeat of 1993 when their detailed plan was released early, roundly criticized then defeated. While hiding the ball might be a good short-term political strategy, a plan that can't survive public scrutiny does not deserve to become law.

I believe the Patients' Choice Act can prevail in a public debate. Even if our plan doesn't have the votes to pass in Congress, it does show the American people that it is possible transform health care without putting the government in charge.

I know that many on the other side have a different vision and philosophy. Yet, their stalling raises a difficult question. If they are confident in their plan why haven't we seen it? We're still waiting. More importantly, so are the American people.

Comments

[zanngra]

Sen. Coburn,
Would you please ask your fellow Republicans to stop the fear mongering and start talking straight to the American people. When you all say things like the government will control your healthcare choices etc., all of us living in the real world know that is exactly what the insurance companies already do, so that argument falls flat. A few years back it was reported that the CEO of United Healthcare made over a billion (yes a billion) dollars in one year. I know how he made that much because I have United Healthcare as my provider. Every time I had a claim I had to jump through hoops to get them to pay it, they have all kinds of games they play, hoping that some people will give up and just pay it themselves. They have improved somewhat, only because they were caught and heavily fined. So when you try to scare us about big bad goverment healtcare it just doesn't work. After years of insurance campanies behaving badly, you are asking us to trust that these companies are the only way forward. I don't think so.

[RonGallion]

Sen. Coburn, Please kill any attempt pertaining to the government taking over health care. Please promote free market solutions. We like the best care in the world. We want to keep it, We don't want a VA style health care system. Just ask any veteran if the VA is great, you will get the same answer NO. So thanks but no thanks.
Thanks
Ron

[FunkyP]

Read Sen. Sanders article on this topic elsewhere on HP. We have the 37th best healthcare, but we are #1 in one category. The amount we spend on healthcare. High cost, especially in this instance, does not guarantee a better outcome.
We should all have the same health plan Sen. Coburn enjoys, which the taxpayer (you too) is paying for.
Government health plans (like Sen. Coburn's) for all.

[jake1az]

Yes, the free market system is the best...loo­k at what it did to our financial sector and housing.

[TheBurdicks]

And this dish of greed served up by a Physician.
Something must have changed in the 15 years between my graduation from medical school, and his. In my medical school we were taught, "To keep the good of the patient as the highest priority." Our mantras in our clinics and ER were, "Treat the patient before you biopsy his wallet.", "Do the blood count before you do the green count."
Now, it's "You can attend to the patient in due time, as long as you follow your priorities, and Keep the common good of the Insurance Company, the for profit medical facility, and the Physician as your highest priority.
I am increasingly dissappointed in an awful lot of my medical "colleagues".
Dwight burdick, M.D., FACEP

[Malen]

Wow! What a deal! Just trying to sort it out made my head spin (or maybe it was an attack of high blood pressure that I can't afford meds for).

Don't any of these people understand the concept of K.I.S.S. (Keep It Simple, Stupid)?

Single Payer.

Let me repeat, SINGLE PAYER!!

[ProgressiveAndProud1]

And I also DON'T CARE HOW MUCH RICH PEOPLE'S TAXES GO UP!

[RonGallion]

And they don't care how much yours go up either. The fact is all will go up.

[ProgressiveAndProud1]

In summary ..... Profit before people

And the gop wonders why they are now and forever banished to the woodshed.

[RonGallion]

I swear you can't possibly work anywhere. Econ 101 No profits no JOBS!

[sb250guy]

(A Better Way to Reform Health Care)

How about this:

Shut down the black budget. An open and free society should not even have one.

Cut the nuclear arsenal by 80%. That should still allow us the capacity to destroy everything a few dozen times at least. All the maintenance and security for these unnecessary nukes is just money thrown down the rabbit hole.

Start bringing home forward deployed troops and closing foreign bases. Perhaps not all, but MANY of them aren't necessary. It sounds drastic only because we should have really started doing it in significant numbers long ago. I live in Japan. The main reason they continue to put up with us is (A) 2 or 3 generations have grown up with us here and they're just kinda used to it and (B) We are scary and they don't want to stand up to us. But hardly anyone wants us to be here. They already actually have a VERY well-equipped (if semi-uncon­stitutiona­l) 'Self Defense' force.

Lastly, simply reduce the US military budget by 5% per year until we spend about 1/3 of what we spend now. The really bizarre thing is that we would, at that point, still have a REALLY robust military.

The savings from the above would allow us to have the BEST health care for all US citizens and residents in the world. Heck, we could probably cover the Canadians too, just to be nice.

[harmilco]

Will someone please tell Sen. Coburn that poor people (the ones who haven't got health care right now) don't benefit from tax credits. Their taxes are so low- sometimes due to the fact they've lost their jobs- a so-called "tax credit" meant to off-set the cost of health insurance DOESN'T MEAN ANYTHING. Forget about it. Republicans think money solves everything.

[GuyP]

Sorry, you are incorrect. You are thinking about a tax-deduction, which would not be very useful to someone with no tax liability to begin with. Before you criticize, maybe you should actual understand the definitions of the words used in the debate at hand.

http://en.wikipedia.org/wiki/Tax_credit

[essdewye]

In other words, we must protect the bottom line of the insurance companies at all costs.

[DanteLabon]

Wow, I never thought of that...Tax cuts...Rep­ubs proposing tax cuts...why it's...it'­s...genius­. And before you propose something that involves a tax cut, ya might wanna get you're story straight with people like Hannity first, who say that the poor and unemployed DO NOT PAY TAXES. So to sum it up...Repub­s want to tax the employer supplied healthcare of working people in order to insure the "self employed" ...which is usually code for wealthy. Sounds like Bush's Medicare part D to me. And how much can I expect to tell my "retired" (had to quit cause they got too old to be of any use anymore at their hard labor jobs) parents they will lose from their TINY S.S. and Medicare checks that they paid into their whole working life and have to live on?? Proof that Repubs STILL don't get it.

[GuyP]

Please read the wikipedia entry on tax credits, since you obviously have no idea what you are talking about.

[Keo]

(sorry for the last, incomplete, post)
Not surprisingly, Sen. Coburn fails to address the more fundamental problems in the system.
The system is flawed BECAUSE of the profit motive. No matter what is done in terms of taxes, the health care crisis cannot be solved without dealing with the simple fact that the system RELIES on people getting sick, and staying sick. Doctors do not have any incentive in the current system to keep people well. They do not get paid for helping people stay well. They only get paid to treat people when they're sick, they do a pretty poor job of dealing with many of the most common chronic illnesses (i.e. asthma, chronic pain, obesity, type-2 diabetes), and are compelled, due to a medical malpractice system that's out of control, and other social factors, to focus on making as much money as they possibly can, often at the expense of good, sensible care. And Big Pharma is constantly bombarding us with commercials encouraging us to think of ourselves as sick and as needing medication. If they really cared about "health," rather than "profits," the world would be a different place.
Senator Coburn's "plan" does absolutely nothing to address the fundamental problems in the system.
I don't have the space here to go into any more detail. But think about it: if you have a health care system that doesn't promote, or reward, health or healthy behavior, what kind of system do you really have?

[uberliberal]

What bigger "reward" do you need to adopt a healthy lifestyle than.....b­eing healthy? You make no sense, should the government pay people that don't have diabetes or asthma? What a single-payer system is reward people who choose unhealthy lifestyles and punish those that choose healthy lifestyles.

You really need to work on your argument.

[DanteLabon]

You're argument makes no sense. If people are sick, people are sick. You can't choose to have asthma, or cancer, or almost every other disease.

[pfrogger]

are you saying people get cancer, or asthma because of an unhealthy lifestlye?
you are not a liberal, just someone whose logic needs work. a lot of work.
medical issues often arise through no fault of the person. accidents are quite common in children. are they choosing unhealthy lifestyles or just being kids?

a single-payer does not reward unhealthy behavior. looking at other industrialized countries with universal healthcare, one sees that preventative education is a key. America spends twice as much as other countries on healthcare and still has a horrible WHO ranking. many in this country do not have health insurance. when they finally go to the ER for an emergency, the taxpayer pays. instead of paying for generic meds, at that point, we pay for all the damage done to the patient by their untreated illness.

your arguments are poor, your rational is weak, and your premise is highly flawed.
it is you who need to work on your argument.

[raker]

The idea of a health plan keeping people well instead of just treating illness is pie-in-sky magical thinking. That was how they sold HMOs to us decades ago: the coverage stinks out loud, but the HMO keeps you healthy so you don't need the coverage anyway! Baloney. Illness happens whether people go to the gym or not. Even non-smokers get sick and die. We have an immature understanding of illness and death in this country. Bad stuff happens, even to virtuous people. Write that down.

Remember "managed care," the mid-80s scheme to save health care that assumed the culprit was, who else, you and I who sought unnecessary hospitalizations? Adding layer upon layer of bureaucracy to police the medical necessity of procedures like hysterectomies only drove costs higher and made insurers richer.

The idea that the medical profession is a sadistic cabal on a mission to keep us sick is preposterous. My doc wastes mountains of resources treating me AND I'm healthier than I'd be without him. Lots of room for improvement there.

Single-payer, government­-sponsored­, full-coverage health care with NO INSURANCE component is the only acceptable plan.

[GuyP]

Can you explain to me how you remove the "profit" motive from healthcare? Do all doctors just receive a salary from the government? Is their pay based on the number of people they treat? Or is it just a set amount? Does it not matter what procedures they use? Doctors are going to want to make money, just like everyone else. If the amount of money they make is in no way tied to how much they work, it gives them even less incentive to see more patients, contributing to a greater supply problem than there is now.

Also, I'm not really sure you are making a good argument. Are people less healthy now than they were 100 years ago? I would say people are healthier than they were back then, at least in terms of life expectancy and infant mortality. Sure it seems like plenty of people have illnesses, but many people also would have died of those illnesses 100 years ago, where as now, many are perfectly treatable.

Also, whose responsibility is it to be healthy, or take steps to gain better health? Is it your responsibility, or is it your doctor's?

[Keo]

Not surprisingly, Sen. Coburn fails to address the more fundamental problems in the system.
The system is flawed BECAUSE of the profit motive. No matter what is done in terms of taxes, the health care crisis cannot be solved without dealing with the simple fact that the system RELIES on people getting sick, and staying sick. Doctors do not have any incentive in the current system to keep people well. They do not get paid for helping people stay well. They only get paid to treat people when they're sick, they do a pretty poor job of dealing with many of the most common chronic illnesses (i.e. asthma, chronic pain, obesity, type-2 diabetes), and are compelled, due to a medical malpractice system that's out of control. And Big Pharma is constantly bombarding us with commercials encouraging us to think of ourselves as sick and as needing medication. If they really cared about "health," rather than "profits," the world would be a different place.
Senator Coburn's "plan" does absolutely nothing to address the fundamental problems in the system.
I don't have the space here to go into any more detail. But think about it: if you have a health care system that doesn't promote, or reward, health or healthy behavior, what kind of system do you really have?

[smallddem]

Sen Coburn and the other Senators and House Reps sure get their comprehensive healthcare paid by the government and don't complain that they're in a socialist run healthcare system, much like medicare which are paid by our tax dollars. Senator Bernie Sanders says they get their healthcare from which they can choose their private health provider but the government helps with the bill.
I sure would like something like what my reps and senators get.

[smileatfear]

This is almost exactly the plan John McCain proposed during the election. The voters said "thanks" but "no thanks." Time to move on.

[imagine0594]

I think that because Republicans don't believe in programs like Medicaid and Medicare they don't organize the budget right when they get power. They give us tax cuts. They raise defense spending. And then once the system is almost bankrupt, they say we have to cut the social programs.

I don't really like the idea of tax credits, either. It's confusing. But I'm glad to see this article on The Huffington Post; this is a pretty liberal place, it's nice to get the other view.

[smileatfear]

That is exactly what they have done. Shrink govt. down to where you can drown it in a bathtub and then shrug and say - "see, told you the govt. can't do anything right."

[uberliberal]

Small central government­......like the Founders and Framers intended!

Ya damn right that's what the Republicans are trying to do - give YOU control over YOU.

[DanteLabon]

Don't let the repugs fool you, they HATE every type of gov. help for ANYONE...e­xcept maybe coorperate welfare. They believe that the country should be like it was before the new deal...Eve­ry person for themselves. That ensures a nice poor, desperate working class for their coorperate buddies to overwork and underpay. Believe that.

[Davwbaird]

you nailed them on that. They are going off the deep end.

[MadameSwanky]

Max Baucus has received millions from the health care industry. Just remember that.

[DanteLabon]

You betcha' That's why we will never see single-payer healthcare. We've got the best government money can buy. Another victory for that wonderful Capitalism.