The Washington Post reports today (“U.S. Senators…“) that 5 Democratic and 5 Republican senators have signed a letter requesting that President Bush “fix the American health care system.” What does fixing the health care system entail for senators Kohl (D-WI), Thune (R-SD), Wyden (D-OR), DeMint (R-SC), Conrad (D-ND), Bennett (R-UT), Salazar (D-CO), Lott (R-MS), Cantwell (D-WA) and Crapo (R-ID)? The senators pointed to six major issues. Below are a listing of each issue along with my commentary.
- “Ensure that all Americans would have affordable, quality, private health coverage, while protecting current government programs.” Everyone wants quality goods for affordable prices. I would love to have eaten a quality Maine lobster tonight for dinner and paid only $1, but that is not likely to happen. Generally, there is a tradeoff between quality and cost, but most politicians do not seem to realize this. Also, while I agree with the senators that health insurance should be administered by private companies, I believe that government health insurance programs such as Medicaid and Medicare could be replaced with subsidies for private insurance.
- Modernize tax rules. I concur with the senators that the health insurance tax deduction as it currently stands not only favors the wealthy but also distortionary.
- Create incentives for states to design health solutions. Decentralization is a great idea.
- Focus on prevention strategies. Although I agree that money spent on known preventative treatments are often cost saving in the long run, the majority of health care spending is for supply-sensitive costs (see P4P post). A focus on preventative care is good policy, but is unlikely to decrease medical costs significantly.
- Encourage cost-effective chronic care and more compassionate end-of-life care. These suggestions are too general and thus have no teeth. Of course more effective care is better, but do the senators want the government to restrict less cost-effective care? How will the government evaluate which treatments will be placed in the ‘less-effective care’ category? Also, it is basically impossible for policy-makers to measure something as abstract as a ‘compassion level’.
- “Improve access to information on price and quality of health services.” This is a important role for the government to fulfill (see post on California healthcare quality report card).
For those who are interested, the complete press release on the Senators’ letter to President Bush can be found here.