Politicians Give Me A Headache: Part 3

Stanley Feld M.D.,FACP,MACE

As the Presidential campaign comes to a close the important issues of the campaign get blurred or discarded. Healthcare reform is one of those issues.

In the past I enjoyed the clarity of thinking of the Wall Street Journal editorial page. Lately it has adopted a patina of fuzzy thinking and muckraking. It frequently misses the essential issues in the name of free enterprise. Last week Newt Gingrich said something intelligent. He said the Republican party should abandon the notion of anti-government for the notion of government involvement with competent management. Barack Obama has hinted that he gets it. 

John McCain does not have a healthcare plan. His healthcare plan has one tactic but is not a strategy to repair the healthcare system. It is an anti-government tactic. An effective healthcare plan must have many tactics. The tactics must align the agendas of all the stakeholders. The most important agenda is the medical care provided to consumers. John McCain’s tactic keeps control of the healthcare industry in the hands of the healthcare insurance companies. The healthcare insurance industry is the stakeholder that has abused the healthcare system. Its abuse has led to the abuse by other stakeholders.

John McCain’s healthcare tax credit is supposed to permit the self-insured to pay for healthcare insurance with pre-tax dollars as opposed to post tax dollars. Employer provided healthcare insurance presently pays for employee insurance with pretax dollars.

Equal tax treatment for employers and self employed should have been instituted years ago. John McCain’s non healthcare plan has many problems. His tax credit is not large enough compared to the cost of healthcare insurance. His plan will give employers an excuse to abandon providing healthcare insurance for its employees. The result long term will be an increase in the number of uninsured. A worker earning $40,000 cannot afford $12,000 a year for healthcare insurance for his family even if $5,000 is tax free. The problem is the cost of insurance and the cost of care.

The Wall Street Journal editorial spends time criticizing the Obama campaign for John McCain’s deficiency.

“One underreported story of this election is how heavily John McCain has been damaged by Barack Obama’s television ad assault on his health-care plan. A lot of voters seem to believe the Democrat when he says that Mr. McCain wants to deny them coverage or bankrupt them with crushing hospital bills.”

Barack Obama’s television advertisement is correct. The result of Mr. McCain’s “healthcare plan” will be just that because “affordable plans” will be sold that do not provide adequate healthcare coverage. We are seeing it now with higher co-pays, higher deductibles and underinsured. The healthcare insurance industry’s goal is to maintain high profits without regard for other stakeholders’ needs.

The Journal spends most of the article criticizing Jason Furman, who is Mr. Obama’s economic policy director because he agrees with Mr. McCain’s tactic. John McCain’s tactic is a tax credit for the self employed that is long overdue. Jason Furman does not agree with the taxable income portion of employer provided healthcare insurance. John McCain’s tax credit, taxable income proposal would result in the elimination of employer provided healthcare insurance.

The problem is healthcare reform needs more than one tactic. It needs innovative reform of the healthcare system. Effective healthcare reform must put the consumer in control of his healthcare dollar with incentives for rewards if consumers use their healthcare dollar wisely. Government and the healthcare insurance industry’s control of the healthcare dollar has not worked. Government control does not work because the government can not manage effectively and outsources control to the healthcare insurance industry.

I do not agree with Senator Obama’s plan because it is going to head us down the road of government as a single party payer with healthcare insurance company management like the Massachusetts plan.

Neither candidate has a viable plan. The WSJ editorial does not focus on the issue of healthcare reform. It confuses us about a sidebar tactic.

“ But wait, let’s consult another one of Mr. Obama’s advisers. David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard, put it this way: “Health insurance is not something that is made better by tying it to employment. As a result, essentially all economists believe that universal coverage should be done outside of employment.”

That passage comes from Mr. Cutler’s 2004 book, “Your Money or Your Life,” which outlined a strategy for universal health care. Not surprisingly, Professor Cutler’s plan, like Mr. McCain’s, also applied subsidies such as “tax credits — people get a lower tax bill, or a refund from the government, to be used to purchase insurance.” In this he was echoing many other liberal health experts such as MIT’s Jonathan Gruber, another Democratic policy star.

I think the WSJ thinks Americans are stupid. If they throw enough unrelated quotes at us we will be totally confused.

I believe as Colin Powell believes. Barack Obama is potentially a transformational figure. He seems to have a deeper view of issues than most. Hopefully, he is smart enough to see through the folly in his healthcare advisors’ plans. John McCain is not transforming anything.