By Chris Ladd

There is a lot of discussion about the relative merits of the Democrats’ and Republicans’ proposed plans to transform our healthcare system.  Before walking through either of them it would be useful to build a scorecard, an inventory of things that a good reform plan should actually address.

One caveat here.  I am not a healthcare expert.  In my opinion, a lack of expertise matters far more on this subject than on the average political question.  Healthcare is in large part a technical matter that in a better world would be more cleanly divorced from political philosophy than it is.  But as best I can describe them, here are the key problems I think we need to tackle.  Excuse the length, it was unavoidable.  Feel free to weigh in.

Our healthcare costs far more than necessary

The relative cost of healthcare in America is spectacular.  Even compared to the high-cost, high-quality “Cadillac” health systems in Europe like Sweden, Germany and France, our costs are vastly worse, just short of double.  What’s more, our costs for healthcare are increasing at a baffling rate of more than twice the general rate of inflation, tripling since 1990.  Why?  These may be a few reasons:

We don’t take advantage of information technology in the health industry the way we could (try emailing your doctor and see what happens).  Decision makers (mostly you and I) don’t have access to information on costs – we are all buying blind.  And we are trapped in this scenario because our health system is almost totally controlled by government, insurers, and medical associations.

Our reliance on private malpractice suits as a primary means to compensate victims of negligence has added further costs.  Some of those costs come in the form of malpractice insurance, but the most serious effect may be the way it presses to doctors in engage in “defensive medicine,” recommending more treatment and testing than a condition may require.

There may be some other reasons for our high costs that will be much more difficult to contain.  Our rates of obesity are between 2 and 3 times the rates for most European countries and rates of teen birth are four and five times higher and more.  Our diet is heavily concentrated on processed food, with high levels of fat, salt and sugar.  Though government is sure to try to intervene in these areas, it is unlikely that any solution will come from legislation.

Medical coverage is too dependent on employment

Since a private insurance policy purchased by an individual in the marketplace is astonishingly expensive, almost every American with health coverage gets their policy through either an employer or some form of government aid.  There is almost no meaningful private market for either direct payment or a personal insurance plan.

This creates tremendous problems for two sets of Americans in particular – middle income workers and aspiring entrepreneurs.  People just starting a career, laborers, hourly workers, and others often have only spotty access to employer-provided insurance coverage and no realistic ability to obtain a private policy.  This leaves them vulnerable to devastating expenses at a time when they are trying to move up the ladder.

Small business owners face this problem from two directions.   Any plan to start a business has to include some way to provide health coverage for one’s own family.  It also involves the need to find affordable coverage for workers.  As costs rise, this is becoming a brutal dilemma.

We care for the uninsured expensively and ineffectively

All across the country there are facilities available to provide medical treatment to anyone, regardless of their ability to pay (Ben Taub in Houston, for example).  The trouble is that those institutions are mostly hospitals, they are heavily reliant on local funding, and as you might expect, they are perpetually strained.  They are also widely separated, making them inconvenient and difficult to access.  Most people using those facilities are there because their condition is extremely serious.  Conditions that could have been cheaply treated early are expensively treated late.

As a consequence of all these factors, we have a system that does in fact provide care to nearly anyone regardless of means, but it is extremely inexpensive and generally ineffective.

The nasty quirks

Because we have a health insurance system that is very old, has changed little in any of our lifetimes, and is constrained by an endless and ever growing network of laws and regulations, it has developed some “quirks” that many foreigners find horrifying.  Perhaps the nastiest of these is the “pre-existing condition.”  If you fail to carry or somehow lose insurance coverage and have a diagnosed medical problem of some kind, a future insurer can charge you more.  Even better, for an extended period of time they can refuse any coverage related to that condition. Cool, huh?

And because a private insurance policy for a family costs considerably more than, for example, the average home mortgage, the danger of falling into this insurance dead-zone hovers over nearly everyone in the middle-class who might conceivably face unemployment.

A couple of other quirks – health insurance companies can’t sell policies across state lines, limiting competitiveness and creating headaches for companies that employ people nationally.  Prescription drug research is unreasonably weighted toward nuisance problems that could generate big sales (male pattern baldness, weight loss) while research lags on more critical problems (new antibiotics).

Neither the Democrats nor the Republicans have in my opinion put forward a serious plan that would address all of these problems and the public seems generally unwilling to face up to them.   The Democrats are stuck on the appalling idea that healthcare (which is, let’s remember, someone else’s talents, investment, and labor) should be treated as a right.

The Republicans are lost in the delusion that healthcare can operate just fine as an unregulated free market, like buying groceries or wallpaper.  We want to pretend that somehow with enough privatization and tax cuts this problem, like all problems, would just go away.

I have argued elsewhere that the best next step in healthcare reform would involve greater state-level autonomy.  But in the next piece I’ll walk through the details of each side’s current federal proposals.  Before I do, what I have I missed here?  What else should healthcare reform address?

ABOUT THE AUTHOR:  Chris Ladd is a moderate Republican who writes for the online publication Republicans United