Elitist Health Insurance Reform Vs. The People

By Robin Bernhoft, M.D.

Health insurance reform is not a partisan issue. Meaningful debate does not divide Democrat from Republican, nor Liberal from Conservative. The real division is between elitists (in medicine, hospitals, large insurance companies, corporations, and both political parties)--who seek top-down control of who-gets-what-health-care--and populists--who seek patient control over medical care decisions.

The Washington Health Services Act of 1993--which will go into effect July 1, 1995--is based on the concept of "managed competition." So are the Clinton, Cooper and Chaffee health reform bills at the federal level, with minor variations. "Managed competition," despite familiar political rhetoric, has nothing to do with market forces. Alain Enthoven, one of the fathers of "managed competition", admits that one can have a managed system, or a competitive one, but not both. The realities are mutually exclusive.

"Managed competition" forces consumers into "managed care" delivery systems (HMOs) in the name of economic efficiency. Unfortunately, managed care has proven to have little or no effect, in itself, on health care costs. For cost reduction, "managed competition" relies on creating intricate bureaucratic systems to determine how much money will be spent on health care, and who will be taken care of--and who will not. "Managed care" is designed for rationing; rationing of care is the only way managed care systems can actually save money.

"Managed competition" as a delivery system is almost immune from patient influence. It is essentially veterinary in nature; the amount and type of care is determined not by the needs of the individual patient, but according to the requirements of the patient's "owner"- -the state agency which pays the bills.

"Managed competition" is, however--like any government-controlled arrangement--highly sensitive to political manipulation. Pressure groups with effective lobbies will find their medical needs cared for (generously); people without lobbyists increasingly will not. The chief victims of "managed care" will be the sickest patients--those whose care is most expensive--and those unfortunates who are personally least productive and least politically organized. The political arithmetic is inescapable. It has already been worked out in England, Canada, New Zealand and Sweden.

There is a better way.

Medical Savings Accounts (MSAs) combined with high-deductible health insurance policies provide a means for most people to obtain better coverage than is now generally available (no net out-of-pocket expenses, no matter how high your medical expenditures, plus incentives to "shop smart," and avoid wasteful consumption. MSAs can be made available to all through high risk insurance pools and vouchers. MSAs could save DSHS up to $600 million dollars annually--and provide first-quality access to care--if MSAs are extended to all welfare clients. MSAs have been shown in pilot studies to reduce overall private care costs more than 25 percent. MSAs work, because they create healthy market incentives for all.

But there is a big practical drawback; MSAs empower the people. Patient power directly violates the letter and spirit of top-down elitist prescriptions for health care reform. Patient power allows the people to choose what care they want, and what care they do not. The special interests who dominate health care seem to prefer the veterinary model. But do we, the patients prefer it? We have a clear choice; elite control of our future health care needs, or patient power. Which will it be?

Sincerely,

Robin Bernhoft, M.D.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org