HAS THE TIME COME FOR UNIVERSAL HEALTH-CARE COVERAGE

We are the only Western country without universal health-care coverage, and this is damaging to its people and the country itself.


^1/1/07: A Healthy New Year

By PAUL KRUGMAN

The U.S. health care system is a scandal and a disgrace. But maybe, just
maybe, 2007 will be the year we start the move toward universal coverage.

In 2005, almost 47 million Americans -- including more than 8 million
children -- were uninsured, and many more had inadequate insurance.

Apologists for our system try to minimize the significance of these
numbers.
Many of the uninsured, asserted the 2004 Economic Report of the President,
"remain uninsured as a matter of choice."

And then you wake up. A scathing article in yesterday's Los Angeles
Times described how insurers refuse to cover anyone with even the
slightest hint of a pre-existing condition. People have been denied
insurance for reasons that range from childhood asthma to a "past bout
of jock itch."

Some say that we can't afford universal health care, even though every
year lack of insurance plunges millions of Americans into severe financial
distress and sends thousands to an early grave. But every other advanced
country somehow manages to provide all its citizens with essential care.
The only reason universal coverage seems hard to achieve here is the
spectacular inefficiency of the U.S. health care system.

Americans spend more on health care per person than anyone else --
almost twice as much as the French, whose medical care is among the
best in the world. Yet we have the highest infant mortality and close to
the lowest life expectancy of any wealthy nation. How do we do it?

Part of the answer is that our fragmented system has much higher
administrative costs than the straightforward government insurance
systems prevalent in the rest of the advanced world. As Anna Bernasek
pointed out in yesterday's New York Times, besides the overhead of
private insurance companies, "there's an enormous amount of paperwork
required of American doctors and hospitals that simply doesn't exist in
countries like Canada or Britain."

In addition, insurers often refuse to pay for preventive care, even
though such care saves a lot of money in the long run, because those
long-run savings won't necessarily redound to their benefit. And the
fragmentation of the American system explains why we lag far behind
other nations in the use of electronic medical records, which both
reduce costs and save lives by preventing many medical errors.

The truth is that we can afford to cover the uninsured. What we can't
afford is to keep going without a universal health care system.

If it were up to me, we'd have a Medicare-like system for everyone, paid
for by a dedicated tax that for most people would be less than they or
their employers currently pay in insurance premiums. This would, at a
stroke, cover the uninsured, greatly reduce administrative costs and
make it much easier to work on preventive care.

Such a system would leave people with the right to choose their own
doctors, and with other choices as well: Medicare currently lets people
apply their benefits to H.M.O.'s run by private insurance companies, and
there's no reason why similar options shouldn't be available in a system
of Medicare for all. But everyone would be in the system, one way or
another.

Can we get there from here? Health care reform is in the air. Democrats
in Congress are talking about providing health insurance to all children.
John Edwards began his presidential campaign with a call for universal
health care.

And there's real action at the state level. Inspired by the Massachusetts
plan to cover all its uninsured residents, politicians in other states are
talking about adopting similar plans. Senator Ron Wyden of Oregon has
introduced a Massachusetts-type plan for the nation as a whole.

But now is the time to warn against plans that try to cover the uninsured
without taking on the fundamental sources of our health system's
inefficiency. What's wrong with both the Massachusetts plan and
Senator Wyden's plan is that they don't operate like Medicare; instead,
they funnel the money through private insurance companies.

Everyone knows why: would-be reformers are trying to avoid too strong a
backlash from the insurance industry and other players who profit from
our current system?s irrationality.

But look at what happened to Bill Clinton. He rejected a single-payer
approach, even though he understood its merits, in favor of a complex
plan that was supposed to co-opt private insurance companies by giving
them a largely gratuitous role. And the reward for this "pragmatism" was
that insurance companies went all-out against his plan anyway, with the
notorious "Harry and Louise" ads that, yes, mocked the plan's complexity.

Now we have another chance for fundamental health care reform. Let's
not blow that chance with a pre-emptive surrender to the special interests.