The Logic of Health Care Reform: Why and How the President's Plan Will Work; Revised and Expanded Edition (Whittle) Review

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(More customer reviews)The Logic of Health Care Reform is like countless other books, which is what makes it so depressing to read. Its subtitle -- Why and How the President's Plan Will Work -- refers not to the current president, but to Bill Clinton. It came out in 1992, came out with revisions in 1994, is available for a penny used on Amazon, and stands as a very sad reminder of the hopes with which people greeted Clinton's plan.
What is hopeful about The Logic of Health Care Reform is that Paul Starr laid the groundwork for a new progressive media. He cofounded The American Prospect in 1990; it's a breeding ground for some of the brightest lights in progressive media, among them Ezra Klein, Jon Cohn, and Josh Marshall. The hope, looking backwards with some trepidation, is that Clinton's failure arms us for success now. Of course we can't know. If health reform succeeds under Obama, a long cast of protagonists will be adorned with floral wreaths and paraded before the townspeople; if it fails, it will be painted as inevitable, and those same protagonists will be painted as pusillanimous and ultimately valueless. Where I stand right now, it could go either way.
In any case, Starr's book came out in the thick of the debate over the Clinton plan, and the blurb describes him as "one of the plan's architects." It contains the same litany that we've read countless times before: the insured population shrinking precipitously; small businesses as victims because of their limited bargaining power; health care costs growing much faster than the overall rate of inflation; health-insurance costs rising while wages remain stagnant, and indeed rising health insurance probably accounting for immobile wages. Firms have a finite bucket of money, after all.
I've come to realize that The American Prospect and its derivatives tend to be wonkish. They focus on the economics of health reform, instead of the moral urgency that impels us, as a just society, to help out those who are less fortunate than we are. A glorious exception here is Jon Cohn's book Sick. You should probably read Starr's book and Cohn's back to back; that would give you a picture of why health reform is not only the morally right thing to do, but makes economic sense.
The centerpiece of the Clinton plan was "managed competition." First, there's competition: some organization, called the "sponsor" -- typically an employer -- offers a menu of competing insurers to its members. Members choose their insurer once per year, when they're not expected to be sick and can choose with a sound mind.
The second piece corresponds to the word "managed". Unmanaged insurers could undercut their competitors by offering plans that cover less, or by only insuring healthy people. Regulation, then, would require that insurers compete on a standard plan, and must offer it to everyone regardless of health. The plans would be required to be "community-rated," which is to say that they'd offer the same rates to all their subscribers. This would mean that plans which ensure an older or sicker customer base would tend to have higher premiums. Hence the sponsor would reimburse plans more if they have a sicker customer base, less if they have a healthier base.
Starr does a good job laying out the various moving parts in health-insurance reform. One of these days I'll sit down and map out exactly how those moving parts interact. If we want universality, for instance, insurance must be required; otherwise adverse selection kicks in, and the healthiest patients drop out of insurance, leading to a downward spiral where only the sickest are insured. Then it becomes a question of who should be required to pay (e.g., employers, employees, the government, ...). Some people will not be able to afford coverage at any price, though; these people will need financial help, which then forces us to ask how to help those people. Then there's the question of how to separate health coverage from employment status: whether you find and treat your heart disease shouldn't depend upon who your employer is. Tweaking any one of these moving parts causes adjustments in the others, but the total number of moving parts does seem rather small.
Starr's book is another tool in the armamentarium. At this point in my education, it seems deeply foolish, when it's not actively harmful, to reject a government role in regulating the health-insurance market. Doing so would almost certainly make the market function better for consumers. People have been talking a lot lately about having a health-care "conversation." By all means, let's have that conversation. The first question is: do you believe that it is even a problem that 1/6 of your fellow-Americans are uninsured? If not, there's not much to talk about. If you do think it's a problem, the onus is on you to explain why the government shouldn't require insurance of all Americans. Let's start that discussion, and let's use The Logic of Health Care Reform as a starting point.

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The Pulitzer Prize-winning author of The Social Transformation of American Medicine reveals that President Clinton's plan for health care reform will work because it was devised by taking the best ideas from a variety of proposals that reflect the full range of the political spectrum.

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