Response to the OCH White Paper

We distributed the OCH White Paper a couple of weeks ago. The responses we have received thus far can be summarized as follows:

• Single payer universal healthcare is government-run and won’t work.
• Single payer universal healthcare will bankrupt the country.
• Your white paper is long and complicated.
• Your white paper is a compilation of reform ideas that have already been analyzed and rejected.

I suspect that the first two responses were mostly from people who did not actually read the white paper, and the last two responses were from people who did. My answer to the first two would be no and no. My answer to the last two would be yes and yes. I hope to get into a point and counter-point debate at a later time if there is sufficient interest, but, for now, I have been asked if I could provide a short statement focused on the one most essential message I hoped to convey in the white paper. It is this:

We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.

The one question I am most often asked is: “How are we going to pay for it?” The answer is not by a huge subsidy from the federal government. Healthcare is an obligation we all share and we must all pay for it. While we must all be obligated to pay, the reformed payer system can use existing financial channels. The Federal Health Board would establish the “universal premium” we all owe each year. Since the risk pool includes everyone in the country—young, old, healthy, sick—the cost per life would be the lowest possible amount. That “premium” would be assessed to the Medicare and Medicaid programs, collected from all employers and employees, paid by the self-employed and covered as an unemployment benefit.

The payer system—built on the existing Medicare database—would be engineered to ensure effective and efficient delivery of services while preventing profiteering by individual or corporate providers. There is no reason why such a system could not also be designed to create an incentive for research and development, while rewarding wellness programs and innovation in technology.

The 30% “universal co-pay” applicable to all services initiated by the patient would not only reduce the basic premium, it would also create a disincentive for excessive utilization by patients. While the premium cost would be based on the average cost of providing care to all patients, the cost of the co-pay would be based on individual utilization and other risk factors. The Federal Health Board would regulate premiums for this secondary insurance and/or provide a public option, but it would do so with a mandate that individuals would suffer financial consequences for their lifestyle decisions.