Great subject for discussion Ari. With new economic crises surfacing almost daily, I don't think the health care issue is getting the discussion it deserves.
I think it's helpful to distinguish between short- and long-term health care costs. In the short run, adopting a universal health care plan will cost more money. But if health care reform is carefully crafted, in the long run it will save money. That's because the American health care delivery system is badly broken. We already spend more money on health care per capita than anyone in the world--even those western nations that do offer universal coverage. One reason is that private insurers spend more than one of every four dollars they collect on overhead. Why? Lots of reasons, but here's the largest: the way the system works now, the best way they can boost their profits are to find ways to denying coverage to sick people. Now I am not blaming companies or insurers for this behavior. Like any businesses, they need to make money for their shareholders. But it should be obvious that a system built on these incentives isn't the best way to provide efficient care for Americans who need it.
Another little-recognized problem with our health system is its tie to employers. Think about it: that makes no sense. Your employer doesn't provide you with car or home insurance...why do they foot the bill for your health care? The surprising answer is that it's an historical accident! During the mid-twentieth century, wartime wage controls kept businesses from hiring enough people to fill the jobs that needed doing. So to compete for labor without breaking the wage controls, they offered health care benefits.
Fast forward to today. We have a situation where businesses who have to pay soaring health care costs are crippled by them, particularly when they face competition that offer no health benefits at all. Health care liabilities are a huge reason why Detroit is going under. And this bizarre system not only cripples businesses, but it hurts workers too. Millions of Americans stay in jobs where they are less productive solely because they are terrified of losing their health care coverage. That makes no sense.
The health care system is massive and hugely complicated. Change will be hard and will take time. Lobbyists will fill the air with howls of protest against anything they think might hurt their client's interest. But in my opinion, change is long overdue. The National Health Insurance Exchange is just a sketch at this point. But it has the potential of helping us work our way out of the huge mess we're in. We'll spend more in 2009 and 2010 if we go after this. But if we do it right, we'll be spending less by 2015-2020. More important, we'll have a healthier citizenry and a much more rational, competitive business sector to boot.
