Mitchell weighs in on the subject of healthcare today, and specifically
the problem that healthcare technology is driving prices up so far and so fast
that at present rates it won’t be all that long until there’s any money left
over for anything else. Mitchell’s solution comes from James Robinson,
a corporate health policy expert at the University of California-Berkeley, and
is, in a nutshell, better healthcare for the rich.
What we need, he says, is a real menu of health care packages, so people
can choose from a variety of programs matching their needs with their ability
to pay, from basic Mazda to luxury Mercedes. Employees (and the government,
for the uninsured) can decide what packages they’ll provide for how much.
By coincidence, I’m in Berkeley myself right now, and took the opportunity
to have coffee yesterday with Lance Knobel
and Brad DeLong. This very question
came up: Brad painted a picture of people having spare eyeballs and kidneys
stored in perpetuity in a hospital basement somewhere, which could be used to
replace the existing ones if they failed for whatever reason.
Brad, of course, knows a lot about the healthcare problem, having been intimately
involved in the original Clinton plan from the early days of the Clinton administration.
And he knows how intractable these sorts of problems can be. His solution is
similar to Robinson’s, but tries to make quality healthcare available to everybody,
and not just to the rich. How does he do that?
I’m sure I’ll get the details wrong, but in a nutshell, Brad would like to
see a health insurance plan or plans in which the deductible is very large:
20% of any individual’s pre-tax income in the previous year. Insurance would
have to be insurance, against catastrophically large medical expenses,
as opposed to the present situation, where consumers have no real skin in the
game and therefore no incentive to try to drive down prices.
Where consumers do pay their own money, Brad notes, as with laser
eye surgery, prices have a tendency to come down quite impressively.
Brad’s system isn’t perfect, of course. The cost of very expensive procedures
would probably not come down much, since people would be losing their entire
deductible anyway. It would be hard to ban supplementary insurance products
which protected people against the risk of losing their entire deductible. And
many people might end up not getting necessary healthcare because they didn’t
want to pay for it.
But it’s still a very interesting idea which tries to seriously tackle the
problem of health-cost inflation – an area where the present health plans
from Democratic presidential candidates are quite weak.
Update: Brad elaborates.