Saturday, August 1, 2009

Health Care Reform: Rise up, Mr. Obama. This is your Man-on-the-Moon Moment.

Many reforms in health care are needed, but the proposed legislation doesn’t address them. For example, the argument that the so-called public option will increase competition is totally false. Employers are justifiably tired of paying ever-increasing insurance premiums for their employees. When the public option becomes available, many firms will simply decide to give their employees a raise to cover the cost of the public option, and then they’ll cancel their company-sponsored plans. That way, they can convert their medical benefits expense to salaries expense, which is much easier to control (i.e., salaries increase at about the rate of inflation, whereas medical premiums have been rising at two to three times that). Once that happens, you’ll then have most Americans on a bare-bones Medicare-type program, with no options and no industry competition. The insurance carriers currently battle it out against each other every day. They do what they can to keep costs down, but they can only do so much to control the medical and pharmaceutical industries. With whom do government agencies like the Social Security Administration, the IRS, and Veterans’ Affairs compete? No one, and they don’t exactly set any standards for efficiency and customer service, do they? It will be the same with whatever new agency ends up running health care.

The health care industry represents 16% of our economy. It employs millions, and it touches every one of us. There is no simple, quick fix for this problem. Bringing health care costs under control is going to take a tremendous amount of collaborative work by the insurance, medical, pharmaceutical, and technology industries. This undertaking is far bigger than the Apollo project, for example, and that project could have never been accomplished without industry doing most of the work. As it did with Apollo, government (NASA, in that case) should play a facilitation role in health care reform, but it should not attempt to become the industry itself. It doesn’t have the technical or managerial skill, nor could it ever put the incentives in place to ensure that the system would be able to actually improve service while also driving costs down, which should be the ultimate goal. The current dialogue in Washington never makes mention of that, which is frightening and disappointing in its lack of ambition. Our politicians are content with the notion of serving more people, but serving them poorly in order to do it (all but themselves, that is). Well, I’m not.

Mr. Obama should use his estimable leadership skills to unify the efforts of these various industries, rather than trying to put them out of business or under some type of Soviet-like control. A sharp bureaucrat can always muscle some kind of ineffective legislation into place (e.g., the stimulus bill), but a real leader inspires the public to raise its ambitions and strive to take on new challenges. President Kennedy inspired the nation to put a man on the moon within 10 years. I’d like to see President Obama do something similar with health care reform. He has the vision and the charisma. He just needs to do it. That's what voters really wanted from him anyway, not bureaucratic quick fixes.

Mr. Obama, don’t deny Americans the opportunity to be Americans. Tackling problems head-on and developing world-class solutions is what we do. Yes we can, remember?