Some in-depth thoughts on a voucher-based national healthcare plan

Vouchers, unlike a single-payer system, get past the three-legged stool of opposition to a single-payer plan

Earlier this week, riffing on President Bush’s State of the Union address, I called for Pell Grants for national healthcare. In that post, I laid out the bare bones of an argument that a voucher-based system is politically much more realizable than a single-payer system. Also, though not mentioned there, a voucher-based system is still paid for, on the part of giving individuals money to buy insurance, unlike the unfunded mandate Mitt Romney signed into law as Massachusetts governor, or the incremental changes to our current healthcare system Democratic presidential candidates are proposing.

Is there a better way, but one that offers consumer choice as individuals — and also requires consumer responsibility? Yes.

The Netherlands has a voucher-based system that requires individuals to buy insurance, as in Massachusetts and as a Gov. Schwarzenegger proposal would do in California. However, unlike Massachusetts, but like Ahhnold’s proposal, insurers cannot deny people coverage for pre-existing conditions. The government gives insurers the extra money needed to take care of the extra needs of these people, supplementing the insurance premium base cost. Private insurers do business as before, only now entirely with individuals; unlike in Massachusetts, companies in the Netherlands are not required to buy insurance, and many don’t. Individuals, then, don’t have to participate in a company-run, one-size-fits-all program. And, going a step beyond the government-filtered Medicaid program here, in Holland, poor people get direct government money to go buy their own insurance along with everybody else.

Aside from government taxes helping fund the vouchers (which would probably cost less than Medicaid), this actually has a free-market orientation. Individuals buy the insurance plan they want, from less comprehensive to more comprehensive.

As for paying for this, eliminating the corporate tax deduction for employer-provided insurance (which tends to favor bigger businesses that have more things to try to deduct, and more money to spend to find these deductions over smaller businesses) would free up money right there.

More below the fold, including my take on the political viability of this.


Germany has some features of a voucher system, albeit with more government regulation.

German bureaucracies implausibly combine efficiency with red tape. The healthcare system is no exception. It has been running smoothly since Bismarck's days. The national insurers issue to their members “Krankenscheine” — booklets with coupons or vouchers.

Insured patients are entitled to one free consultation every 3 months. The coupon used in lieu of payment is redeemed by the insurance company which pays the doctors. Recognizing the dangers of over-visitation and over-consumption of free services and drugs, in Germany patients partly pay for everything else — from medicines to corrective contact lenses.

Hospital admittance — to both private and public facilities —is conditioned upon referral by a doctor. This apparently onerous demand served to virtually eliminate waiting lists together with the hypochondriacs, factitious disorders, and impostors that infest hospitals elsewhere.

There’s a three-legged stool of opponents to a British-Canadian single-payer system here that shoot it down as a model for an American national healthcare system.

Those legs are Big Pharma, that is, the major pharmaceutical companies, the American Medical Association, and health insurance companies.

Tackling Big Pharma just isn’t doable. There’s less than a dozen major drug companies, with a strong, tightly focused group of lobbyists, first, as compared to the other two legs of the stool. Also, Big Pharma has ginormously Deep Pockets. Finally, not all Big Pharma companies are even headquartered in the U.S., so would be tough to ride herd on, anyway.

A voucher-based plan might be able to offer at least a quarter-loaf, if not a half-loaf, above current HMOs, to doctors, whether AMA members or not. And, this is something that’s needed anyway.

It’s called a federal office of insurance regulations. Such an agency would have the power not only to monitor fraud, or, under a voucher system, attempts to still not insure people with pre-existing conditions. It could also oversee both policyholder and doctor complaints about lack of timely payment, disputed charges, and so forth.

I don’t doubt that doctors would see that as a reasonable pot sweetener to agree to a national health care system of some sort.

That leaves insurers. Since a British-Canadian single-payer system would, except for people buying supplemental health insurance policies, pretty well eliminate the world of private health insurance, and since insurers know that the clamor for major healthcare reform is growing, they have an incentive to totally get on board with a voucher-based system.

Expressing somewhat similar ideas, more support for a voucher-based national healthcare plan can be found here.

In other words, a voucher-based system of nationally-funded, privately-purchased healthcare is very politically doable.

Of course, there’s more systemic factors involved with escalating U.S. healthcare costs.

They include what I call “MRI envy” among hospitals, overtreatment of patients out of lawsuit fears (and, no, Texas-style tort “reform” is not the answer from where I sit), and even the cost of medical school in the U.S. versus western European countries with similar standards of income. Besides addressing the paying for healthcare, we need to further look at its pricing.

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‘Pell Grants for (private) schools’? Hell, Pell Grants for national healthcare

Instead of Shrub’s marketing plan, in his (thank doornknob, final) State of the Union, to rename vouchers for religious schools “Pell Grants for kids,” can’t we have somebody talking about “Pell grants for national healthcare”?

If progressives think a German-style voucher system, with mandates but government assistance in individuals paying for it, and the openness of free-market insurance shopping, is an easier sell than a British single payer system, which I do, this is the talking phrase needed.

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Let’s not be so optimistic about national health care — that’s you, Kevin Drum and Ezra Klein

Kevin Drum and Ezra Klein are both optimistic on getting real health care changes done after this year’s elections. In specific, both are much more optimistic now that, as compared to the Clintons’ 1994 plan, much of the business community is on board.

Here’s Ezra:

Business also seems exhausted by the ceaseless march of health care costs and ready for reform. In 1994, when managed care was just beginning to squeeze cost growth, health spending grew by a mere 4.1 percent. It looked like the private sector might prove able to control costs just fine. But the gains from managed care dissipated as the 1990s wore on, and in 2005, health spending grew by 7.2 percent. Much of that cost was borne by the business community.

First, I’m not sure what world Ezra is even living in.

“Really?” is my mildest reply. My newspaper group, in the last 3-4 years, first cut its share of copay on premiums, after changing providers twice, then killed insurance entirely for a HSA. I am sure other people have similar stories.

In my opinion, Kevin and Ezra are wayyy too optimistic about the National Federation of Independent Business, and folks like them, committing to real health care change.. Sure, the NFIB has no problem with a mandate system, as long as businesses don't have to dig into corporate wallets to help with co-pay on premiums.

Get back to anything close to a single-payer system, or even a German voucher-type system where corporate taxes are a major portion of paying for this, and the NFIB will jump off that ship so damned fast...

Can’t believe the two bloggers sign off on the optimism line so easily. This “optimism” will get us enough incremental change the NFIB figures it will shut people up for 20 years or so.

And, should Obama get the Democratic nomination and then the election, the question of his “let’s play nice” on healthcare reform will become clear. I suspect if he moves one inch beyond a mandate that falls largely on the backs of employees, he’ll get his hat handed to him by the NFIB.

[That's all.]

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Drug samples don’t help those in need — word to Obama

A new study discloses that free samples by drugmakers almost totally go to those already well off and insured.

Seventy-two percent of those who received a sample had income in excess of 200 percent above poverty level.

The Pharmaceutical Research and Manufacturers of America says that’s because the poor don’t get most their health care at doctor’s offices.

Duhhh. Of course, PhARMA says nothing about why drug manufacturers aren’t sending more of their samples to clinics in the first place.

Related to matters political, I guess this is another reason I don’t buy Obama’s claim that we can all just “reason together” on healthcare.

If he tries something even close to full national health care with that attitude, this shows just how much Big PhARMA will hand him his head on a platter.

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Bad US healthcare - beyond lack of coverage problems

It’s no wonder that medical malpractice lawsuits are so high in America, because they deserve to be high:

American doctors and hospitals kill patients through surgical and medical mistakes more often than their counterparts in other industrialized nations.

The New York Times editorial gets all the basics right about healthcare itself, including noting that we’re even near the bottom of the developed world in average life expectancy at age 60.

We are also faulted for our doctors lagging far behind those in most developed countries in the use of information technology and other computer aids.

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‘Sicko’ inspires impromptu town hall — in DALLAS, not SF or NYC

Even conservative rednecks are THAT tired of our healthcare system, or lack thereof. Read on:

When the credits rolled the audience filed out and into the bathrooms. At the urinals, my redneck friend couldn't stop talking about the film, and I kept listening. He struck up a conversation with a random black man in his 40s standing next to him, and soon everyone was peeing and talking about just how fu**ed everything is.

I kept my distance, as we all finished and exited at the same time. Outside the restroom doors... the theater was in chaos. The entire Sicko audience had somehow formed an impromptu town hall meeting in front of the ladies room. I've never seen anything like it. This is Texas goddammit, not France or some liberal college campus. But here these people were, complete strangers from every walk of life talking excitedly about the movie. It was as if they simply couldn't go home without doing something drastic about what they'd just seen. My redneck compadre and his new friend found their wives at the center of the group, while I lingered in the background waiting for my spouse to emerge.

The talk gradually centered around a core of 10 or 12 strangers in a cluster while the rest of us stood around them listening intently to this thing that seemed to be happening out of nowhere. The black gentleman engaged by my redneck in the restroom shouted for everyone's attention. The conversation stopped instantly as all eyes in this group of 30 or 40 people were now on him. "If we just see this and do nothing about it," he said, "then what's the point? Something has to change." There was silence, then the redneck's wife started calling for email addresses. Suddenly everyone was scribbling down everyone else's email, promising to get together and do something ... though no one seemed to know quite what.

Now, if we can get those “rednecks” to start switching OFF Fox when Neal Cavuto claims national healthcare aids terrorists, we’ll be starting to accomplish something.

Oh, MoveOn has a toll-free number, 1-866-459-6050, to connect people with the presidential candidate of their choice, to direct their anger and passion over this issue.

Cross posted at SocraticGadfly.

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Half of GOP voters want universal health care

So, with poll results like this:

The survey of 2,000 self-described Republican voters, titled “The Elephant Looks in the Mirror 10 Years Later,” showed that ... 51 percent of the GOPers said universal healthcare coverage should be a right of every American.

why aren’t Democrats pushing the national healthcare issue more?

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Some talking points for how national healthcare might rein in costs

Via Washington Monthly, Ezra Klein’s “It’s not about age” post on the rising cost of healthcare got me to thinking about possible ways a national healthcare system done right could generate some real savings. That’s whether it’s a straight-up single-payer system or we allow some room for private insurance companies.

Several thoughts on savings:

First, national healthcare would mean, or should mean, standardized paperwork, whether we have a single-payer system, or let insurance companies be part of the game, or whatever. Big administrative savings right there, I think.

Second, if it means the government regulating the amount of fMRI machines in a certain area, or saying that it's only going to be a payer to 12 out of 17 hospitals in a major metropolitan area that have fMRI equipment, so be it.

Let's go further and think of this in terms of medical market care pooling in broader ways.

Third, that in turn may drive some doctors away from some specialties. But, many doctors go down that road in the first place to recoup the high U.S. cost of medical school. This backdoor pressure itself wouldn't be enough to drive down med school costs, perhaps. Maybe other things would, such as higher student loan rates for specialization, or to flip that, lower student loan rates for non-specialization. Expansion of programs, such as working in Indian Health Service hospitals, to ameliorate loans, could be part of this.

Fourth, national healthcare, to me, implies at least some degree of national regulatory standards superceding state ones, such as state insurance boards (at least the health insurance regulatory part; a national insurance regulatory system in general might be a good idea but that's neither here nor there).

Yes, I know big-business conservatives, and the AMA, will both call this “rationing.” On the other hand, people who aren’t knee-jerk worshipers of the myth of Adam Smith, including a fair amount of doctors, surely would buy off on the reduction in paperwork hassles, overhead, etc.

Things like this are why any Ron Wyden-type proposal doesn't well meet my smell test. It’s not so much the issue of single-payer or not, it’s the incrementalism. And, with Fortune 500 companies begging for relief, progressives who really want to do something different on healthcare have them by the short hairs.

That said, this is an area where a presidential bully pulpit can be a big help. So, rather than a Wyden-type proposal being brought to the current Congress, it would be much better, in terms of the big picture, to wait until 2009, assuming the election of a non-Republican, non-Libertarian president.

Cross-posted at Socratic Gadfly.

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