No Perfect Health System

Whoever thinks a faultless piece to see
Thinks what ne’er was, nor is, nor e're will be.

Alexander Pope (1688-1744),  An Essay on Criticism

Health care cannot be separated from politics.  That is why there was, nor is, nor ever will be a perfect health system.  The best we can hope for is a system that combines the best of all possible worlds.   The American Enterprise Institute, a conservative think tank, tries to do this in their August 2013 white paper, “The Best of Both Worlds: Uniting Universal Coverage and Personal Choice.”

This sounds idyllic – combining universal coverage, the liberals’ fantasy dream, with the conservatives’ fondest hope, market-driven care.  Michael  Chernew, a Harvard professor, and six academic colleagues wrote the paper. It is surprisingly non-doctrinaire, combining elements of both progressive and conservative philosophies.

The paper points out the faults of the present system.  It artificially inflates health care premiums for the young in an attempt to cover costs for the sick. It relies too much on open-ended fee-for-service, rewarding volume rather than value.  It funnels the poor into Medicaid programs with such low premiums that it decreases access and produces worst outcomes.

As solutions,  the paper recommends.  That insurers be allowed to charge premiums that reflect the true cost of care, that the premiums be made affordable through government subsidies, that barriers to long-term health contracts be eliminated, that employer tax benefits be eliminated.

Conservative economist, John C.Goodman, who bills himself as the father of health savings accounts,  says, on the whole, the American  Enterprise Institute report is  superior to ObamaCare, but it is politically impossible and impractical.   He says the AEI paper endorses six principles that Obamacare does not:  tax fairness, universality, labor market neutrality, portability, self-insurance, and real insurance(insurance protecting people against premium hikes should they get sick).

I have no fixed idea about who is right and who is wrong on these complicated issues.   But I do not believe Obamacare is a good fit for the American free enterprise system.  The ACA’s search for the perfect drives out much of the good in the American system –technological excellence, entrepreneurship, patient choice, and reasonable doctor autonomy.   It is well nigh impossible to regulate and mandate decision-making for the billions of transactions and actions at the physician-patient level.  The  ACA, however, does provide some needed protections against market abuses.  I do not discount the oversight role of government in overseeing the vast American health care system, which makes up 1/5 of the American economy. We spend nearly $3 trillion for health care,  nearly half by the government.  

Tweet:  American Enterprise Institute (AEI) has published a paper claiming to unite the best of both worlds- universal coverage with patient choice.