Health Policy Experts Debate Where Reform Should Go

(MoneyWatch)  In a spate of recently published articles, health policy experts across the political spectrum discuss where healthcare reform should go from here. Their viewpoints articulate the clashing philosophies that underlie the current deadlock in Washington.

Stuart Butler, of the right-wing Heritage Foundation, points out that even small reforms could have large unintended consequences. For example, he notes that the Office of Personnel Management (OPM) now administers the Federal Health Employees Benefit Program like a large private employer, without laying a strong regulatory hand on the health plans that compete for government workers' business. If the provision in the Senate bill that would let OPM supervise a menu of plans for individuals and small firms were passed on its own, he suggests, the OPM would take a much harder line with the plans, which would eventually come to resemble the public option much reviled by the right. Butler concludes that Congress is better off doing nothing until every last possibility has been puzzled out.

John Goodman, president of the National Center for Policy Analysis, does not favor any of the Democratic ideas, either. While he agrees with ultra-liberal Paul Krugman (shudder) that the proposed insurance reforms would fail if they were adopted incrementally, he proposes replacing them with a raft of ideas derived from the consumer-driven healthcare concept he's associated with. Just as in consumer-driven health plans with health savings accounts, these ideas revolve around having each person insure themselves against their own personal risk, rather than spreading the risk across the sick and the healthy, the old and the young. This reflects the Republican every-person-for-himself-or-herself, non-redistributive philosophy, but it's hard to see how it would help expand coverage or reduce health costs, except by denying care to those who need it the most.

Joseph Antos, a less conservative thinker at the American Enterprise Institute, also acknowledges that a slimmer bill is unlikely because of the interconnectedness of the issues involved. "One cannot simply pluck a few provisions out of the bill and expect to have legislation that achieves ambitious goals," he points out. But he thinks that the current legislation overreaches and that Congress should focus on incremental reforms to achieve targeted goals. For example, he would change the way Medicare reimburses providers (an approach that is promoted in the current bill), and he would cap the federal contribution to Medicaid programs (an idea the states would be ecstatic about). He would replace the individual mandate to buy insurance with a system in which those who maintained lifetime coverage would have lower premiums than those who interrupted their coverage or tried to buy insurance only when they got sick. Antos maintains that this would be the best way to persuade everyone to buy insurance. But it isn't that different from the status quo, and we have 47 million uninsured today.

Finally, there's Henry Aaron of the liberal Brookings Institution, who insists that the only way forward is to pass the current legislation, using the budget reconciliation maneuver to "fix" the Senate bill that the House would have to pass. "The start-over, do-it-in-pieces strategy is an invitation to time-wasting failure," he states, pointing out that each piece would need to attract 60 votes in a Senate where the Democrats now have only 59 at best. Moreover, Aaron points out, a "reform lite" package that expanded coverage to a smaller group would not work:

"It is not possible to institute serious insurance market reforms without assuring a balanced pool of enrollees. It is not possible to assure balanced pooling without mandating coverage. It is not politically or ethically possible to mandate coverage without providing subsidies to make insurance affordable to low- and moderate income people. And it is not possible to prevent subsidies from boosting deficits unless one is prepared to boost taxes or cut other spending, which reform opponents have consistently refused to do and which would certainly require sixty Senate votes."

There you have it. Retreating from the current legislation to a smaller reform package would be an admission of political and substantive defeat. It would lead to nothing, which means the status quo. And even the special interests wouldn't benefit from that for long.