Progressives offer bipartisan plan for healthcare? Not quite

Column by Sean Parnell

The Center for American Progress released a healthcare reform plan in Septebmer it claimed should draw bipartisan support because it includes Republican ideas. The first four words of an associated press article reporting on the plan were “Borrowing a Republican idea.”

But instead of drawing on the best ideas from both sides of the ideological divide, this latest plan simply repackages left-wing ideas on government-run health care while offering a single token concession to those who believe in market-oriented reform. Instead of showcasing a willingness of progressives to seek common ground with free-market advocates, the plan demonstrates just how little progressives understand about what the free-market means when it comes to health care.

The plan itself is hardly novel or groundbreaking. Its two main pillars are government rationing of health care and price controls on medical services, neither of which is market-oriented or likely to appeal to people with a center-right perspective.

The Accountable Care States plan would require participating states to agree to cap total expenditures on health care for both the public and private sectors. Historically, health care costs have grown faster than the economy. Under this plan, states would agree to limit health care spending growth to just one-half of a percent above state economic growth, well under the one-and-a-half to two percent growth that is otherwise projected.

In the first year or two, shaving a percentage point or two off health care spending growth may not have a large impact. But the effect is cumulative, meaning small cuts at first become very large cuts over time.

This leads to the situation Canada finds itself in, with its global budget limiting how much money can be spent on health care: Extremely long waits for needed care are common.

Half of all patients needing hip replacement in British Columbia, for example, wait more than four months, and 10 percent wait longer than 10 months. Overall, patients in Canada wait about 18 weeks between the time a general practitioner refers them to a specialist and the time they actually receive treatment.

In the United States, the cap imposed on health care costs would force doctors, insurers, and hospitals to ration care, because they simply wouldn’t have the funds to provide all the care that is necessary, at least not in the current third-party payer system.

We’ve already seen the result of this policy here in the United States, with the recently uncovered scandal at the Veterans Administration. Patients were denied care while bureaucrats manipulated wait lists in order to pretend they were hitting their budget and treatment goals.

The second pillar of the Accountable Care States plan is the dubious idea price controls in health care can be substantially improved. The plan would effectively require Medicare, Medicaid, and even private insurers to sign on to new payment schemes modeled on HMO practices of the 1990s, where doctors and hospitals are given a limited amount of money to care for all their patients and are rewarded for saving money. One great way to save money, of course, is to withhold treatment.

Having worked for a primary congressional author of the Patients’ Bill of Rights, which was written to rein in HMO abuses, I can predict with some confidence that reviving this payment strategy will not go over well with the public.

What, then, is the “Republican idea” in all of this rationing and price controls? Apparently people on the right are supposed to swoon because state participation in the plan would be voluntary. The generous compromisers at the Center for American Progress won’t force states to adopt this scheme—at least, not yet.

The Accountable Care States plan is in no way bipartisan. It’s simply a scheme to bribe states into enacting policies long-favored by progressive activists.

There may be hope for real bipartisan, pan-ideological reforms on health care—Democratic Sen. Ron Wyden of Oregon certainly has some good ideas on this—but the Accountable Care States plan isn’t even a decent starting point.

Sean Parnell ([email protected]) is a research fellow of The Heartland Institute and managing editor of Health Care News.