Friday, September 21, 2007

We Thought Alike - At Least This Time

Funny how my post from yesterday mirrors Paul Krugman's column about healthcare in The New York Times today. He puts things better of course, but touches the same points about (a) Hillary and Edwards plans being the best (as constrained by realism), (b) the Republicans having no meaningful alternative that can deliver, and (c) MittRomney's hypocrisy. So those who don't have access to Krugman's columns that require subscription can simply read my blog.

Jokes aside though, there are two places where my perspective differs from that of Krugman. One is a minor point - he worries that Hillary took so long to announce her detailed plan and says this may portend her reluctance to deliver on it subsequently. I feel the elections are still so far away that she had every right to take her time and study all the issues carefully. So I do not question her determination based on her timing.

The second difference is more pronounced, and is about the effect of malpractice activity on healthcare costs. Krugman, like Michael Moore in "Sicko," is conspicuously silent on this issue of reining in the trial lawyers through malpractice caps and tort reform. On the contrary I view this as one of the biggest problems and contributors to high US healthcare costs.

The left traditionally stands for civil rights and individual protections that then extends to support of lawyers and litigation. Could his anti-Right leanings constrain Krugman from attacking a leftist viewpoint even when this viewpoint is flawed? I hope this isn't the case because I admire his writing style and crisp logic, and enjoy reading his columns.

Thursday, September 20, 2007

So What's Wrong With HillaryCare?

Somehow Hillary Clinton's opponents on the Right have managed to make HillaryCare sound pejorative. But it's Hillary and John Edwards who have come out with healthcare plans that can tackle the biggest issue of the uninsured or underinsured in the US. Hillary's plan has been recently announced and positively addresses the three basic questions that determine if it is meaningful and workable:
(a) Does it commit to ensure everyone has coverage? Any plan that doesn't is insufficient.
(b) Does it require pooling of risk (i.e., are the healthy forced to get coverage and thus pay into the system?) Without pooling the concept of insurance does not work. This is where Obama falls short.
(c) Is it sensibly funded , i.e., doesn't necessarily lead to breaking the bank of public and private resources? This is the toughest challenge for Edwards and Hillary, but their repeal of tax cuts and forcing large employers to pay into the system or cover employees seems that it can do the trick.

The Republican candidates can only answer positively to "c" above, so their plans are hardly worth talking about - they too seem to realize this and try to avoid the subject or fall back on "Beware HillaryCare" slogans.

Hillary has even left a role for private insurers, saying that they can provide the necessary coverage, even to the currently uninsured. That's quite a contrast from the Michael Moore "Sicko" denunciations. Yet her proposals make sense. Private insurers need to make a profit, which imposes a cost on the system, as Michael Moore and economist Paul Krugman rightly point out. But on the other hand, private insurers can offset these factors and earn their keep if they can discharge the payment and reimbursement function more efficiently, and curb fraudulent billing by providers more efficiently than the government. And the "risk pooling" requirement that insurers cannot turn down or charge more from sick applicants or those with pre-existing conditions removes a big source of inefficiency.

Hillary's plan says nothing about some other big factors behind the high healthcare costs - malpractice and litigation fears; drug pricing and doctor shortages. The first of these is the biggest (and the one that Democrats are least likely to address through tort reform) but it is encouraging to see this Businessweek article of April 30th about the vanishing jury trials.

Mitt Romney has been denouncing Hillary's plan which largely incorporates the features of his own Massachusetts State plan. Romney is the ultimate Chameleon candidate - he seems to have reversed himself on nearly every big issue since his quest for the White House. On healthcare I think he would have been better served even during the primaries by sticking to his earlier stance. After all many Republicans too are worried about healthcare and want meaningful solutions. But this may be a moot point as Romney's so far behind the front-runners.