It's not for nothing that I put a link over there in the right-hand column to The New Yorker columnist James Surowiecki's blog "The Balance Sheet." Surowiecki far more often than not gets it right (meaning, of course, that he agrees with me, or I with him) but equally often, he manages to offer a new perspective as well.
His January 4 opinion piece "Fifth Wheel" pretty well nails the key realities of health care reform as I see them:
First, that whatever emerges from Congress in the next few weeks or months will not be either pretty or perfect, but it will, despite its imperfections, be a significant step forward in achieving what most of the world's developed countries already have.
Second, that the main issue remaining outside the scope of present proposed legislation is reduced cost, but that won't be dealt with now, nor probably in the next decade. I have argued here in Morning Fog that we can't break the upward spiral of cost until we admit that the only realistic way to do so is to abandon our reliance on a for-profit insurance system.
Surowiecki seems to agree, but the valuable new perspective he brings is encapsulated in one sentence: "Congress is effectively making private insurers unnecessary, yet continuing to insist that we can't do without them." How so? Well, most members of Congress (including those who've opposed many elements of current legislative proposals) support universal access and the concept that those who have medical problems should not pay more. Yet private insurance is based precisely on that kind of calculation of risk-to-price; when companies can no longer base rates on such variables, they must tend to atrophy.
Congressmen by and large just haven't recognized yet the contradictions of what they are pushing for -- or perhaps just don't want to admit they do. On the other hand, I believe most insurers have seen the handwriting on the wall and have begun to factor it into their business plans.
If not, they need to think about it now. Reform need not be a zero-sum game between insurers and the public, but it can't remain a wealth-transfer from the latter to the former, with up to 50 cents of every premium dollar going to administrative costs and profits. Successful insurance systems in several other countries (e.g., Germany and Switzerland) retain private insurers as the core, but they operate more like utilities for essential care, while continuing to derive greater margins by offering special coverages to those who want and can pay for them.
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