Reunions panel discusses problems with U.S. healthcare system

The U.S. health care system demonstrates shortcomings in basing premiums on an individual’s health, economics professor Uwe Reinhardt said at apanelon Friday.

“It’s like shoving them into a shopping mall and saying, ‘Shop around efficiently.’ That’s still how it is. Prices vary widely among providers and have no correlation to quality, the research shows,” he said.

Reinhardt noted that former Massachusetts Gov. Mitt Romney’s health care plan, often called RomneyCare, served as a blueprint for the Affordable Care Act. RomneyCare was simultaneously a reform for the health insurance market and a move toward universal coverage. In terms of delivery, the act pushed for a more clinically integrated health care system by aiming to increase transparency surrounding quality of care, Reinhardt said.

The plan also hurt health insurance premiums for the young and old, Reinhardt said.

“Younger, healthier people saw their premiums increase and older, sicker people saw their premiums plummet,” he explained. “That’s, of course, what happens. There’s actually no denying that ObamaCare redistributes income in a major way among the insured.”

National healthcare reform involved political, ideological and moral debate, and the process of legislating the Affordable Care Act through the U.S. government system produced a “very disorderly bill,” Reinhardt noted. He said an additional hurdle preventing easy passage was President Barack Obama’s decision to finance the bill, whereas his predecessor George W. Bush would have simply added to the deficit.

In addition to the White House’s administrative mismanagement during rollout, Reinhardt said, the plan contained many rough edges. There was poor interface between ObamaCare and employers, and administrative costs ran high.

“Choice costs money, and ObamaCare gives you so much choice [that] it’s very expensive to run. But no more expensive than the private sector,” he said.Avik Roy, senior fellow at the Manhattan Institute and opinion editor at Forbes Magazine, offered an alternative vision of healthcare reform, arguing that universal health coverage can be market-oriented. The United States is not the world’s best model and should consider the examples of Switzerland and Singapore, he said.

In Switzerland, he noted, there are no public options, but rather private insurance companies. The government offers a sliding scale of subsidies for the entire population, not just for those in the lowest income brackets.

“[There] is a true safety net, where you’re actually subsidizing health insurance for people who need the help, but saying to everyone else, ‘No, but go buy your own insurance.’ So they are only subsidizing health coverage for about the bottom 20 percent of their population from that income and health standpoint.”

Singapore offers coverage for catastrophic health events but requires individuals to shop and pay for non-emergency care. Low-income patients can receive government subsidization, while the rest of the population’s social security taxes are rerouted to a health savings account for future care or even for their children, according to Roy.

Roy criticized the U.S. system for its lack of cost-effectiveness in government spending on health.

“Before the [Affordable Care Act] went into effect, the United States was spending more than all but two other countries on government healthcare — even though we had those 30, 40, 50 million uninsured. This, to me, is the remarkable testament to the profound inefficiency of our healthcare system," he said.

He proposed that individuals, regardless of their poverty level or age, be given the ability to choose the details of their plan coverage. He called for the liberalization of the Affordable Care Act, saying that the eligibility age should be increased and that a gradual expansion of the program should take place to allow more enrollees.

However, according to Roy, there are still political challenges facing conservatives. Since the task of repealing and replacing the policy would cause disruption to existing health plans, although the public may be opposed to the Affordable Care Act, the idea of repealing is also unpopular.

“People are tired of the drama, they’re tired of the shouting matches, and they’re tired of disruption,” he added.

The panel, titled “ObamaCare: Can It Be Fixed or Should It Be Repealed?” took place at11 a.m.in Dodds Auditorium and was co-sponsored by the Griswold Center for Economic and Policy Studies and the Center for Health and Wellbeing.