The Health-Care Mess: How Do We Climb Out?

Appeared in The Wall Street Journal July 22, 2006, Page A11

It was refreshing to read Andy Stern's acknowledgement in "Horse-and-Buggy Health Coverage" (editorial page, July 17) that we cannot rely on employment-based health insurance for our increasingly-mobile 21st century workforce. But the red flags went up when he said that "we need a universal system . . . and shared financing among employers, employees, and government."

Big unionized companies are being smothered by health costs after giving in to demands for more and more generous tax-favored health benefits for half a century. We are hearing increasing calls for more government involvement so the American taxpayer can bail them out, especially calls for taxpayers to pick up the medical bills of higher-cost workers.

But it's up to companies to figure out how they're going to get out of the mess they've created. They could start by telling employees how much of their compensation package is going to buy health insurance, then working for policy changes that would give workers more freedom to purchase health insurance that is portable and can be purchased in a more affordable, less-regulated, national marketplace.

Grace-Marie Turner

President

Galen Institute

Alexandria, Va.

Mr. Stern is exactly right on the need for business leadership to push for health reform -- almost. American businesses, which pay more for health care than does Medicare, have been deafeningly silent on the broken health-care system. Yet business leaders aren't the only ones responsible for the bottom line that is eroding under the strain of health costs.

Shareholders and board members need to take a stand as well. Corporate charters could directly call on business leadership to make the public policy changes needed to create an affordable, accessible and efficient health system. Boards could direct CEOs to engage themselves in solutions to the health system crisis rather than outsourcing this job to trade associations. These associations leverage little real change since they must satisfy the lowest common denominator. And, if all else fails, shareholders should support resolutions that force their companies to advocate for system reform -- the only real solution to the health cost crisis plaguing businesses.

Tom Daschle

Distinguished Senior Fellow

Center for American Progress

Washington

I was completely on board with Andy Stern's criticism of our employer-based system until he turned to universal coverage as the "obvious" solution. I agree with him that the rapid turnover of jobs for younger (and older) workers renders obsolete the practice of tying one's health coverage to one's employer. But the solution is not more centralization, it's less. As Mr. Stern states very well, "we are rapidly moving from employer-managed work lives to self-managed work lives." Exactly -- we don't have employer-based auto insurance or home insurance, so why do we need employer-based health insurance?

But he rejects this initial call to individualism and heads in the other direction. For although he calls out to business leaders to make health care their top priority, universal coverage ultimately has to be a government initiative, which steers us back to an all-too-familiar argument. It was ham-handed government policy, in the form of World War II wage controls that created the problem; I hardly think more of the same is the answer.

Mark D. White

Associate Professor of Economics

College of Staten Island and The Graduate Center, CUNY

New York

I had to chuckle at the irony of Mr. Stern's "Horse-and-Buggy Health Coverage" -- as if that was a bad thing. Living in a community with a sizable Amish population along with having a spouse who is a physician, "horse-and-buggy" health care consists of:

-- 100% choice of doctors and hospitals.

-- No drug formularies.

-- No prior approvals.

-- Administrative paperwork consisting of a simple receipt for services rendered.

How do they do this? The Amish simply pay "set-aside" cash for routine services and contribute to a community fund for catastrophic health care. This successful 140-year-old system is what we "modern people" have invented and refer to as Medical IRAs.

So, as opposed to implementing another failed "universal system," as suggested by Mr. Stern, I contend we actually should pursue "horse-and-buggy coverage" -- a market-based system characterized by simplicity, freedom and personal responsibility.

Jack E. Jordan

Bremen, Ind.