Healthcare

Now that health reform has finally passed, we have a chance to reflect on what it really means.  Is it a major victory for progressives?  Or a huge subsidy to insurance companies?

The answer is clearly "yes" and "yes".  What we've accomplished so far is to commit our society to provide health care to 32 million more people, at the cost of 1 trillion dollars over ten years.  It also contains major initiatives in prevention, wellness, quality improvement, and long-term care.  That's a huge step forward -- one of the most significant expansions to the social safety net in U.S. history -- and provides a platform to build on for the future.

Are the insurance companies getting a great deal?  Yes, but at the cost of making their current business model illegal.  They can no longer make money by cherry-picking the most profitable customers, and dumping the ones that really need help.  And they are limited in the amount of administrative overhead (including profits and executive salaries) they can charge customers.  Of course, effective regulation is needed to make this actually happen, and the ball will be in the court of the Obama Administration to do that.  But with the new business model, insurance companies will have to compete on the basis of the value they provide to customers, rather than by being the best at getting rid of the sickest patients.

Can we stop working on health reform now that this legislation has passed?  No.  Most importantly, now that we're covering many more people, we really have to work on the problem of health care costs.  The reform law contains a number of very solid cost control initiatives (you can find a great summary in this letter from 23 economists to the President), but they need to be translated into actual changes to the system.  And then down the road, Congress needs to stick with what they said they would do, supporting cost-cutting so long as quality can be maintained or improved.

To sum up, passing health reform is like the invasion of Normandy.  The war isn't over but we've overcome a really huge obstacle.  And if we hadn't ... to mix up the metaphors, it would have been Waterloo for all of us.

-- Dan Carnese

Dear all,
 
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