Our Health Care Dilemma

This column originally appeared at Big Jolly Politics:

In today’s Wall Street Journal, columnist Holman W. Jenkins, Jr., provides this interesting analysis (Conservatives and the Mandate) of the root problem with our health care system. Distilled to its essence, the problem with Obamacare (and Romneycare, and Schwarzeneggercare), it that they perpetuate and worsen an already existing distortion of the market for health care. Ladies and Gentlemen, I hate to tell you this, but there has been no free market for health care in a very long time, and we will have to accept a lot more personal responsibility in our lives if we want to re-establish a free market in that industry.

Since the end of World War II, when unions negotiated for insurance coverage in lieu of wage increases, the provision of health care in this country increasingly has come to be managed by middlemen: private for-profit insurance companies; private non-profit insurance companies; federal and state government agencies; and local public hospital systems. Moreover, most privately-employed full time workers have another middleman, their employer, involved in the process of selecting the insurance coverage, negotiating its price, and collecting and paying the premiums. Most doctor-patient relationships, including the cost and scope of care, are initiated and managed, directly or indirectly, by one of these middlemen. Relatively few individuals (if any) today “choose” their doctors and can negotiate the cost and scope of their care.

In the meantime, the premiums paid by employers and employees are no longer dictated by the actuarial pricing of the risk of illness, disease or injury, because coverage is so broad that it covers basic medical services for which there is no fortuitous risk involved. This means that increasingly the cost we pay for coverage has little or no relation to the individual needs of each person, but rather is based on the cost of sustaining the insurance coverage for everyone enrolled in a specific plan, or for everyone covered by a carrier or government program.

In turn, the decisions of the middlemen dictate how much health care is provided, to whom it is provided, when it is provided and where it is provided. These decisions affect the decisions of doctors in the treatment of patients, and distort the allocation of medical resources in every community.

The only major benefit of the private insurance market to the overall free-market economy is that the premium funds are re-invested in the private economy. But, if you think you are paying premiums to buy a free-market relationship with your doctor, you’re simply wrong.

What Obamacare and its state counterparts do is not a fix to these problems, so that the same quality and amount of medical care is accessible to everyone, and that you regain control of your doctor-patient relationship. Instead, these programs further institutionalize the role and power of middlemen, and raise their decisions from contractual dictates to legal mandates. Meanwhile, the program is designed, over time, to reduce the incentive to purchase private insurance, which eventually will reduce the primary economic benefit of such a product—the re-investment of premiums into the private economy. Eventually, Obamacare will lead to a pure transfer payment entitlement funded with tax dollars and public debt.

The only way to fix this mess in the long term is to restructure the health care industry into a free-market system where most of the economic and medical decisions are kept at the level of the doctor-patient relationship, and the middlemen’s role is greatly reduced. This can be done by creating three delivery systems:

• A private insurance system that only provides coverage for major medical issues—major illnesses, diseases or injuries—and that requires high deductibles or health savings accounts, and personal responsibility, for the payment of all other health care;
• Local hospital and clinic systems paid for with local tax dollars, and administered by local governments, for the indigent (and the continuation of a similar federal program for veterans); and
• A means-tested voucher system to fund the payment of private insurance premiums for insurance coverage for the elderly, paid for from the Medicare tax.

Although these changes sound like common-sense, conservative approaches to fixing the system, I have been amazed by the reaction of many conservatives to these ideas when you discuss them privately. Over the years, as I’ve tried to discuss our current predicament and these types of policy changes with people around the dinner table or in relaxed conversations, their eyes glaze over. More importantly, I have discovered another phenomenon during such discussions: many spouses and single parents, who control family finances and handle the doctor appointments (and, in my anecdotal experience from these conversations, these spouses and single parents are women, regardless of whether both spouses in a marriage work outside the home), hate the idea of losing the simplicity derived from the involvement of middlemen, and they especially hate the idea of losing the convenience of co-pays. They may complain about a specific bad experience with an insurance company over a coverage issue; but the idea of a return of more control over medical decisions and payments to families, and the resulting increase in personal responsibility over such transactions, is simply an anathema to many of these spouses.

Now add to this pre-disposition against assuming more responsibility over the doctor-patient relationship, the recent flap over Obama’s mandate for church-related hospital and charities to provide services and prescriptions, or insurance coverage for such services and prescriptions, which violate the tenets of the religious institutions that manage such hospitals and charities, and you see that this issue is more politically volatile and complex than we conservatives often think. Yes, conservatives and many independents viscerally recoil at the notion of government having and exercising the power to mandate us to do anything, and especially when such power is used to interfere with the decisions and doctrines of a church (and most believe that such government action is unconstitutional). On the other hand, even many conservatives are much more ambivalent about middlemen in their medical decisions, including government, when they are forced to consider the alternative. So, when these people hear that access to contraceptives could be denied to some women, and that the alternative to mandates that are designed to require such access is responsibility they don’t want, their reaction to the issue is not predictably supportive of the religious liberty of the church.

Where does all of this lead to? As I’ve said so often that I’m beginning to feel like a broken record, it leads to the hardest question we Americans have to face this fall, and for many years to come: are we willing to take back the personal responsibilities that the maintenance of liberty and a society of free people requires? If not, then electing Republicans to Washington this fall will not matter in the long-run, because the trajectory of public policy will continue in a leftward direction toward a European system with the trade-offs between social programs and national defense that Europeans have made, and with the acceptance of increasing public and private debts to finance such a system—until it inevitably collapses, internally or externally.

If electing Republicans this fall is to mean real change, we will have to look in the mirror and accept the personal responsibilities such changes will demand of us.

A Time to Fight

A friend of mine sent me a copy of an email that is being circulated by Organizing For America (“OFA”), which already is the source of some chatter over Facebook and Twitter. As you may know, OFA is the affiliate of the Democratic National Committee that continues to control, communicate with, and mobilize Obama’s campaign foot soldiers. For the last several months, the focus of OFA has been on the Health Care issue.

The latest email told the recipient:

In my community in Indianapolis, OFA members like me are fighting hard to raise awareness and build support for health insurance reform. We're calling our neighbors, going door-to-door on the weekends, and even spreading the word through local barbershops. …

…I'm asking you join me in making sure Organizing for America has the resources to pull off this historic campaign. Can you join me in donating $1 per day until we enact health insurance reform?

My friend who received the email and forwarded it to me is a long-time Republican and McCain supporter, who somehow got on Obama’s email list during the campaign last year. In his email message, he asked me a simple question: where is our party organization at any level on this issue? As I pointed out in another recent post, the GOP should be developing and campaigning for a market-based alternative health-care system, but the question posed to me is more basic. Why is our party not matching OFA’s mobilization effort?

We complain amongst ourselves, discuss theory, and pass along complicated charts, but where is the mobilization? Where are the volunteers mobilized to call our neighbors, or go door-to-door, or talk in our local barbershops, or send text messages? These tasks should be the job of our Precinct Chairs and club members, and mobilization of those volunteers should be a fundamental task of a functioning party organization. Failure to mobilize the party organization to wage this fight is further evidence of a dysfunctional party apparatus.

I stress again, that we do need ideas and alternative policies, but we also need mobilization—and we needed it yesterday. Sending out 650-word essays on maintaining the status quo is not a plan for mobilization. We knew this issue was coming for over a year, and yet we have no plan for a concerted counter-attack. If we are to get this country, this state, and this county back on track for the GOP and our principles, this must change.

To make the necessary changes to combat and contain the explosion of government created by Obama and desired by Democrats here in Texas, the GOP must mobilize the growing millions of men and women who want sanity returned to the operation of our government. To start this mobilization, the GOP must understand what its goal must be: nothing short of rebuilding America consistent with its founding principles. To rebuild America, we must renew the Republican Party into a fighting machine for our ideals, which will require a modernization of our party organization into an apparatus capable of mobilizing our grassroots into action. Our fighting machine will need leaders: either those who already are in the party organization, or those from outside the party who share our principles and who are tired of the mess our political establishment in Washington has created and is expanding. We must look for leaders who will lead and work--in Congress, in our legislatures, and in our neighborhoods.

The plan we have proposed for the HCRP is designed to make these changes at the local level. The plan will only work, though, if our Precinct Chairs accept the mantle of leadership, work to mobilize the grassroots, and then lead them to act when we need action. If they won't do this, we must find those who will.

Unfortunately, we can not wait for the primary next March to start the needed transformation of the GOP, or the HCRP. Passively grumbling about the direction our country is taking, or emailing dissertations in favor of the status quo, won't stop the OFA, and it won't defeat the Democrats' plans for our state and country. The GOP, including the HCRP, must regroup now for the political battle it now faces, and then take the battle to the OFA for the hearts and minds of our neighbors. We need to join our Precinct Chairs and club members with the Tea Partiers and other activists into an immediate mobilization against the growth of the Obama government. If we do this, we will gain the trust and confidence of millions of disillusioned citizens yearning for leadership from the GOP, and we will lay the groundwork for victory in 2010. If we don't, we soon may not recognize the country we live in.

Let's not just stop health-care reform, let's fight for a private alternative!

The Health Care debate is now on the political center stage.

Besides enduring the President’s long-winded answers during last night’s press conference, local Republicans have received two emails over the last 48 hours about this issue from the Montgomery County Republican Party and the Harris County Republican Party Chair. While the Montgomery email was concise and focused, and directed the reader to Congressmen and their phone numbers in order to call with objections, the HCRP email was a rambling 650+ word editorial ending with a request for money. Both carried the same message, though: Just say "no" to the current legislation. While I agree with my fellow Republicans that we should do all we can to stop this legislation, we can’t just end this debate by embracing the status quo.

Unfortunately, that is exactly what the HCRP advocates in its email. Chairman Woodfill summarized this position perfectly when he wrote the following: "By controlling the money, the government, not your insurance company, will be the ultimate decision maker." The problem with the status quo is that we already have ceded our liberty over health care decisions to a middleman (our insurer), which, in exchange for giving us a small co-pay and for relieving us of a lot of paperwork, controls our money and ultimate decision-making.

My argument is very simple: neither the insurance bureaucracy, nor a government bureaucracy should control your money or your health-care decisions--you should. The only way to make the system affordable, accessible, and private, is to put control of medical transactions into the hands of the patient and the provider, and reduce the role of any middleman--government or insurance--to subsidizing catastrophic risk through insurance or a safety net. Preferably the primary role of managing catastrophic risk would remain within the insurance industry so that premium income will still be invested in the private economy. Even Medicaid and Medicare could be folded into this system by changing the system of direct reimbursement to providers to a system of providing medical accounts to individuals and using tax dollars to pay premiums to private insurers for catastrophic coverage. Coupled with effective regulation to enlarge insurance pools, guarantee portability and prohibit denial of coverage, these changes would reduce costs over time without rationing.

Ideas for re-engineering the system into a patient-centered, market-oriented system have existed for decades. Rather than only say "no", our party should take the lead in advancing these alternative ideas. In fact, Michael Steele should call a national conference of Republican leaders and leaders of the health care and pharmaceutical industries now, to hammer-out an alternative to introduce on the floor of the House and the Senate and to use during next year's campaign. Taking this positive approach, coupled with stopping the current rush to further bureaucratize health care, should be the focus of our party at all levels.

At a stop sign, the driver eventually proceeds through the intersection; similarly, if all the GOP does is say "no", the Democrats eventually will succeed in passing their health-care legislation. We need to present a positive alternative in order to truly stop the Democratic agenda.

Finally, I must note that the HCRP has claimed a remarkable turnaround in fundraising since the reporting period ended on June 30th. Though we will not be able to confirm the source of these new funds for months, reliable sources confirm that much of the money was paid to the party by elected officials, including incumbent judges, in response to emphatic pleas for help from Richmond Avenue. Demanding tithes from candidates and elected officials is not fundraising, and ultimately deprives these people of resources they will need to fight their Democratic opponents. This approach must stop. However, now that the party has some money, it should honor its outstanding obligations to third parties that have been delinquent for too long. In short, the current team at Richmond Avenue should focus less on editorializing about a national issue and focus more on “healing thyself”.