Health reform — the GOP’s direction forward

By Jack Bernard
The (Columbus, Ga.) Ledger-Enquirer, April 21, 2017

When he was in office, President Obama stated that my party, the GOP, had been highly critical of the ACA (Obamacare), but had offered no alternative for improving access and cutting cost. At the time, he was right.

For eight years, the GOP had talked vaguely about free market alternatives, but the only real suggestions coming out of the GOP at that time (via Paul Ryan and Tom Price primarily) were to (a) remake Medicare into a voucher program; (b) institute tax credits and health savings accounts versus the ACA ; and (c) convert Medicaid into a state block grant.

As a former state government budget analyst, I know where Speaker Ryan (in my opinion purely a budget guy versus an intellectual policy wonk) is coming from. These proposals will restrict federal expenditures.

However, they will not lower non-governmental systemic costs. Directly or indirectly, they simply dump the financial burden on the patient and will almost certainly add expenses to state and local government.

Morally, this position is wrong because it does not consider the pain caused by these proposed changes. Plus, on a purely pragmatic level, these initiatives have very little support from the American public, as shown by the town hall meeting protests that accompanied GOP representatives foolhardy enough to hold them.

Other GOP politicians, like my own representative and senators, chose either to hold no meetings at all or to have telephone calls instead. I call this the “repeal and run away” strategy.

The GOP should have anticipated this backlash. A Gallup survey a few years back found that preservation of Medicare was more important to Americans than deficit reduction. If the taxpayers have to choose, their preference is to cut the military rather than Medicare, per that survey.

This very visible and vociferous negative reaction most certainly factored into the rejection in the House of the AHCA (the GOP bill incorporating a variation of “b” and “c” above), especially for representatives in “blue” districts.

Both Democrats and Republicans know that it will continue to be hard to implement the ACA. But the GOP has been beating its head against a wall in opposition for many years. The House passing 60-plus bills for ACA repeal under Obama was a meaningless gesture, especially when considering that the GOP can’t come up with an acceptable alternative plan now that it controls the White House.

So, in the short term, the nation has to live with the ACA. The ACA will eventually expand coverage via: a (a) mandated private health insurance and (b) voluntary state Medicaid expansion, although not in 19 GOP dominated states, some having the most uninsured. But coverage will never be universal and tens of millions will not be covered under Obamacare.

On the flip side, the ACA makes relatively minor attempts at cost containment, tinkering with the private insurance systems generating much of the problem. But expenditures (public and private) will continue to rise significantly under the ACA.

So, the question is: Where should my party go from here to contain costs while improving coverage and outcomes? The answer may surprise you.

Nixon, a staunch anti-communist, weighed the long-term costs and benefits and correctly recognized China. Can you imagine what other nations would think if the U.S. had continued to refuse to recognize a country that would become the second-largest world economy?

Well, that is how the rest of the developed world currently views the U.S. when it comes to our healthcare.

Historically, despite the (when convenient) citing of us being the “party of Lincoln,” the GOP has been the more conservative alternative for the last century. When we go in the other direction, it has a significant effect on both national policy and politics.

Politicians in the GOP often state that “we have the best healthcare in the world.” But, what are the facts?

The National Research Council (NRC) and the Institute of Medicine (IOM) issued a panel report in January 2013, which described the dismal state of U.S. healthcare compared to other nations. Among their findings: “Americans are more likely to find their health care inaccessible or unaffordable” and “even advantaged Americans are in worse health than similar individuals in other countries.”

In 2008, the respected Commonwealth Fund found in a study of 19 industrialized nations that the U.S. placed last in preventable deaths and was improving more slowly than other countries. If we were just average, we would have had 75,000 to 100,000 fewer deaths.

In 2000, the World Health Organization did a comparative analysis of healthcare in the countries around the world and ranked the U.S. 37th, lower than nations like Colombia (22), Saudi Arabia (26) and Morocco (29).

To be fair, these studies do have us number one in a very important category: expenditures. We consistently spend more per capita on healthcare, though our outcomes are worse than in other developed countries. Per OECD, in 2016, the cost per capita here was $9,451. It was $5,227 in Sweden, with great cradle-to-grave care. Other nations with very good care were also lower; for example, Italy’s per capita cost was just $3,272.

For health expenditures as a proportion of GNP, we exceed all others (save the Marshall , with the GNP of many Georgia counties). And the proportion to GNP keeps growing. By 2021, healthcare expenditures will reach nearly 20% of our GNP (up from 18% now), according to the government actuaries (CMS, Medicare). This is money that would otherwise go to education or infrastructure improvements.

The government (federal, state, local) accounts for 46% of total expenditures currently and that will grow to 50% by 2021. We spend more tax money per capita than most other nations do, just not as wisely.

When we look around the world, there are a number of national healthcare systems that work much better. Many use models in which government delivers most services, similar to our VA. Although good enough for our vets, conservatives (many veterans) decry this system as too socialistic for Americans.

A more palatable solution for our country is to simply expand Medicare, which is widely accepted. With Medicare for All, everyone would receive coverage as those over 65 do now, leaving control of delivery (hospitals, physicians and other providers) in private hands.

During the 2009 congressional debates on structuring the ACA, the public option was abandoned. One reason given was that it was “unfair” to the private sector, which would be unable to compete for customers.

When it comes to Medicare, that is exactly the point. Medicare is more efficient than the free market. It has administrative costs of 3%, versus up to 20% for private insurers (it averages 12%). Overhead is lower; marketing costs are non-existent.

The best way to get U.S. healthcare expenditures under control is through one payer, Medicare. By recognizing this fact and pursuing real reform, the GOP can take the lead in the ongoing debate on how to replace the ACA.

And there is considerable support for this move by the public. According to a KFF 12-15 survey, 81% of Democrats want single payer, as well as 60% of independents. Although only 30% of Republicans lean this way, that number would rise dramatically if the President came out in favor of Medicare for All.

After all, in his 2000 book “The America We Deserve” he stated: “As far as single payer, it works in Canada. It works incredibly well in Scotland. It could have worked (here) in a different age.” Mr. President, do you mean before drug and insurance company lobbyists bought Congress?

This past election reflected an out–of-touch Democratic Party with an unlikeable candidate, as well as a celebrity populist candidate on the Republican side, resulting in a surprising upset. However, given the demographic changes under way in our nation, the GOP needs a hook to make it viable long term in national elections.

If the GOP proposed its own version of universal Medicare, there would be enough Democrats voting for the bill to pass (the Dems already introduced HR 676 proposing single payer). It would be the “Nixon goes to China” moment that might just start to turn around the party, moving it toward the middle where it needs to be for long-term success.

Jack Bernard, former chairman of the Jasper County Republican Party, is a former Director of Health Planning for the state of Georgia who now lives in Peachtree City.