I must be honest from the beginning. I like Obama. I’ve read and enjoyed both of his books. He intrigues me as person and as a politician.
However, it disappoints me to say that his health care plan is weaker than my expectations. Part of the problem is the political positioning problem of a presidential campaign – the same problem that Edwards and Clinton face. However, I’m confident that Clinton understands the intricacies of health care where I cannot say the same for Obama (even though he has a well respected health care adviser – David Cutler of Harvard – he does not have the track record of Clinton). In my opinion Obama’s plan is weaker than the Clinton/Edwards plans.
Universal Health Care
Obama’s plan will not provide universal health care, and he is misleading on this point. What he attempts to do is to reform the system at the edges in order to cover more and more people – and he will cover more people. However, without some type of mandate universal health care is not going to happen. There will always be some percentage of the population that will opt out of having insurance.
Comprehensive reform must address selection issues that run rampant in our current system. Obama addresses these issues by creating a National Health Insurance Exchange. Within the exchange, health plans will be standardized at or above those offered to Congress and plans would not be allowed to deny coverage based on health. These are good steps, but it is not clear that private plans have to participate in the exchange, and therefore, it is not clear whether many plans will participate. Even the plans that do end up under the exchange will still have ways to use selection mechanisms. There is just too much wiggle room. The strongest measure against selection issues is his idea of re-insurance. I will tackle that below.
A Few Strong Points
Re-insurance has the potential to do two things simultaneously. One it will decrease the incentives for insurers to use selection mechanisms because they will be relieved from much of the risk of insuring the mostly costly patients. Second, re-insurance should significantly lower the cost of premiums. Whether re-insurance will work is in the details and the plan as written is lacking in such details, but this one point distinguishes his plan from Edwards and Clinton. The second strong point is his emphasis on quality reporting. Quality reporting from doctors and insurers will place an administrative burden, but standardized quality measures are needed if competition is ever going to work to reduce costs and improve quality. How can a consumer make an informed decision without quality measurements? Quality reporting is a nice step to promote competition and to potentially implement pay-for-performance payment schemes. Lastly, I like his talk about boosting public health funding. The details of this are scarce, but at least he notes the need.
Obama offers many of the same reforms as Clinton/Edwards including emphasis on preventative care, chronic disease management programs, effectiveness review, integrated care through technological implementation, malpractice reform, drug re-importation, and increase use of generic drugs. All are good step to cut corners off the medical bills, but none address the bulk of the costs.
Obama will push that all children are insured. A great goal for sure. However, I want all Americans to have insurance. I want the parents of the sick kid to have insurance. One line of thought is that as we create more piecemeal programs we actual construct obstacles to universal health care. I would encourage Obama to take the big step here and insure all people – not just children. Obama’s plan has an employer contribution. Again the details are weak. The size is unknown. But let’s be clear that the employer contribution will come out of the employee’s paycheck over time. All of these plans have extra costs and need funding, but the employer mandate does not get the employee off the hook.
Ultimately, Obama’s plan is a good step forward. It is more timid than I would like. It is not universal and is too much of a patchwork of ideas and programs. The lack of a mandate concerns me and leaves room for selection issues. The re-insurance concept and quality reporting are strong ideas in which implementation will be crucial. Overall, the plan is an improvement, but I prefer the Edwards/Clinton plans. Ideally, I would take the re-insurance and quality reforms of Obama and place them into the Clinton/Edwards plans. It might be renamed the Biden plan.
Next up…the Republicans.