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Repealing Obamacare is foolish. Here are 5 better ideas

Rick Newman
·Senior Columnist

The U.S. Congress is stuck in the 1980s.

Republicans and Democrats are fighting a high-profile war over the Affordable Care Act, the 2010 law that extended health insurance to some but not all of the 50 million Americans who lacked it at the time. There are still roughly 27 million Americans without health coverage, and there will be more if Republicans get their way and kill or roll back Obamacare, as the ACA is known. Millions more find health care so expensive they can’t go on vacation, buy a car, muster the down payment for a home or even pay routine bills.

By some measures, the American health care system is the worst in the developed world. Americans pay the most for the least. Most other developed countries figured out in the last century that it’s worth the trouble to provide health care for everybody. America hasn’t. Congress is still arguing over who should have health care, when it ought to be debating the most efficient and effective ways to provide health care for everybody.

There are more enlightened minds in America. Here are a few ideas for genuinely improving the U.S. health care system, instead of extending and revoking benefits to certain classes of people, based on which political party runs the show in Washington.

Recognize the enormous economic benefit of a healthier population

The United States decided a century ago that universal education up to the age of early adulthood was in the national interest. It’s now widely understood that secondary education at a community college or university leads to a better life and more prosperous nation. In the same way, it’s time to acknowledge that a healthier population and workforce is a key economic advantage—especially in a globalized world where competition among nations is becoming intense.

Rob Adler protests against President Trump’s proposed replacement for Obamacare in Los Angeles, California, U.S., March 14, 2017. REUTERS/Lucy Nicholson
Rob Adler protests against President Trump’s proposed replacement for Obamacare in Los Angeles, California, U.S., March 14, 2017. REUTERS/Lucy Nicholson

Universal health coverage is a wise public investment,” researchers Walter McClure, Alain Enthoven and Tim McDonald write in Health Affairs. “Done right, it will return far more to our national prosperity than it costs in tax dollars. If you want to outcom­pete a billion Chinese, you better have a workforce not only better-educated but healthier than anyone else.”

Establish universal coverage—without putting the government in charge

The standard argument between the left and the right is a false dichotomy. Universal coverage is possible without the single-payer or government-run system conservatives fear, and there’s an important role for free-market incentives without the abuses liberals fear. The trick is institutionalizing the excellent care found in pockets of the American health system, while eliminating perverse incentives that drive up costs—some promulgated by government policies and others by the private-sector profit motive.

McClure et. al. suggest a move toward universal coverage based on a system of private-sector provider groups offering a broad range of services. A crucial element of such a system would be accurate public assessments of cost and effectiveness for each provider group, so consumers can make informed decisions about whom to patronize. Competition would force groups to improve their performance or lose business. The government could administer the program, as it does with Medicare, or set a regulatory framework and enforce it.

Move away from employer-sponsored coverage

Nobody designing a modern health care system from scratch would put the majority of the burden on employers—nor would employers accept such responsibility. The only reason half of all Americans are covered by an employer plan is an accident of history: During World War II, worries about inflation led Washington to put limits on wage hikes; companies then turned to fringe benefits such as health insurance to compete for workers. That grew into the outmoded system we have today, which Warren Buffett and others say puts American companies at a disadvantage, because their foreign competitors don’t have to deal with health care costs. From the broad perspective of national economic competitiveness, it makes way more sense to pay for health insurance through taxes than through corporate profits.

Focus relentlessly on cost control

The battle over the ACA is largely about access to health care—expanding coverage to people who might otherwise not be able to afford it. The ACA does little to control costs for the 270 million Americans who get health care coverage through some source other than the ACA. This ought to be the real priority right now, since it affects so many more people than the ACA alone. In Congress, however, the political and ideological battle over the essential nature of health care—is it a right or a privilege?—trumps pragmatic efforts to address real problems facing the most people.

Generating more bang for the buck in health care requires one basic thing: rewarding providers for offering the best care at the lowest price, instead of rewarding them for providing the most care. This is exactly the kind of problem capitalism is supposed to solve, except the market for health care is different from other markets: it’s hard to measure outcomes, consumers don’t know prices, some government policies create the wrong incentives, and we generally object to people being priced out of the market for something if the result is death or some other calamity. Fixing this is a complicated problem, but not a hopeless one; many experts foresee solutions involving a mix of free-market incentives and government backstops.

Borrow solutions from other countries

Americans quiver at the thought of government-run health care with long lines at the emergency room and yearlong waits for routine care. But these are caricatures that leave out some important details. In nations like the U.K. and the Netherlands, for instance, people are free to purchase private insurance or access to private providers allowing them to bypass government-run systems. Everybody gets basic care and those willing to pay more for customized care can get that, too.

In France, medications covering 30 common conditions are free to every citizen. Does that sound terrible? Canada’s single-payer system gets higher marks from its own citizens than the U.S. system does from its.

So what are our northern neighbors doing right? For one thing, placing a heavy emphasis on preventive care that keeps people from getting sick in the first place, according to researchers at the University of Pennsylvania. It seems safe to say the United States will never have a single-payer system completely run by the government, as Canada does. But it already has elements of the more effective systems found in other countries. Closing the gaps through a combination of public and private reforms is well within the realm of possibility. If only Congress would join the 21st century.

Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman