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10.13.09

The Best Deal the GOP Will Get

The Senate Finance Committee passed Obamacare on Tuesday. Matthew Yglesias says if this bill doesn’t pass the whole Senate, the president’s next offer will be a far more bitter pill.

In Finland last December, where taxes are 43.6 percent of GDP (compared to just 28.2 percent in the United States), a politician told me “we’re not socialists like in Sweden” but still felt it would be absurd to charge tuition for people to go to college. Now for the past two weeks I’ve been in Sweden and Denmark, where taxes hover at around 50 percent of GDP, and socialism, as defined by Finns, actually looks pretty nice. Here in America, though, it’s Barack Obama who stands accused of wanting to turn the United States socialist with a health-care proposal that allegedly amounts to a freedom-sapping government takeover soon to end in disaster.

It’s true that the changes in the bill the Senate Finance Committee passed on Tuesday are fairly far-reaching. Still, it’s worth putting them in perspective. Compared to health-care systems that exist elsewhere—and that seem to work a lot better than ours—bill proposes extremely modest changes that would leave the overwhelming majority of the health-care system in private hands.

What Obama and Baucus are proposing is close to the minimum amount of change conceivable. If insurance-industry groups succeed in killing the bill, the lesson will be that appeasement hasn’t worked.

The opposition party's hostility to this modest reform looks hysterical, and the interest groups fighting against reform don't really seem to grasp how easy on them Obama and Congress are being. Private-sector players, in particular, ought to recognize that the Senate Finance Committee’s bill is incredibly generous to their interests by international standards and that if that generosity isn't rewarded with political success, next time around they're likely to see proposals they like a whole lot less.

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Consider, for example, not health insurance but the actual provision of health care. Under Obamacare, it doesn’t matter whether you’re covered by Medicare or an expanded version of Medicaid or employer-sponsored insurance, or a private plan purchased on the new health-care exchange, or the still-possible—and controversial—”public option” that may or may not be in the exchange; your actual health-care provider will be a private-sector entity. In Sweden, by contrast, most health care is provided by a hierarchy of government-run institutions. There are 18 county councils in Sweden given funds by the central government and charged with organizing the provision of health care. The 18 counties are grouped into six larger regions. The counties run just over 1,000 small “health centers” to provide basic care, about 70 county hospitals for more complicated cases, and eight regional hospitals for specialized care. Certain illnesses are sufficiently rare that not every region maintains the ability to treat them, and the counties are expected to work out arrangements to transfer patients from one county to another in order to deal with those cases.

The care provided at these institutions isn’t free, but it’s pretty darn cheap. Nobody ever has to pay more than a total of 900 Swedish kroner for treatment over the course of a year—that’s about $125 in terms of today’s very weak dollar. The point of the fees isn’t really to raise revenue, but to encourage people to seek care at the appropriate level. The health centers are dirt cheap, the county hospitals cost a bit more, and the regional hospitals a bit more than that. Overwhelmingly, the bills are being paid by the government; that’s what the high taxes are for.

In Denmark, by contrast, health care is absolutely free for 98.5 percent of the population. Everyone signs on with a general practitioner. If you have a problem, you see the GP. If he thinks you need to be admitted to a hospital or sent to a specialist, then to the hospital or the specialist you go. The country is divided into five regions, and the regions run the bulk of the hospitals. Thanks to the right-wing coalition that’s been ruling for about eight years, the regions also sometimes contract-out care to private hospitals. But either way, the government pays 100 percent of the cost. A further 1.5 percent of the population is in rare “Group B” insurance where you have a (small) co-payment to see a doctor, but also the right to make an appointment directly with a specialist without going through a GP.

This might sound like change you can believe in or change to fear, depending on your point of view. But one thing can’t be doubted—for the U.S. to adopt either of these systems would be a major change. The reform bills in Congress are, by contrast, small fry. In the United States, the idea that Medicare should simply be expanded to cover all citizens is regarded as something of a lunatic fringe position and even that wouldn’t take us all the way to what they’re doing in Scandinavia. The Democratic bills all hold sacrosanct the overwhelming role of the private sector in the actual provision of health care as well as the dominant role of the private sector in insuring the non-elderly, non-impoverished population. They also preserve the American principle that, in a fundamental sense, the quality of the health care you get should depend in crucial ways on your ability to pay. This is a deep contrast with Sweden, where official government documents explain that “health and medical care is based on the principles that care should be provided on equal terms and according to need, that is should be under democratic control and financed on the basis of solidarity.”

Whether that sounds good to you or not, it’s not the principle we operate under in the United States and it’s not the principle that the Obama administration is aiming for. Instead, they’re simply trying to achieve the much more modest aim of guaranteeing that a basic standard of care is available to everyone irrespective of the idiosyncrasies of employment status and medical history.

In part, the administration’s goals are so modest because the overwhelming lesson of the past is that changing American health care is hard. So rather than try to crush the special interests, Obama has tried to appease them. But it looks like that may not be good enough, as the insurance industry decided to cast a cloud over this week’s Finance Committee vote on reform by releasing a deeply deceptive report accusing the Max Baucus version of reform of unleashing a dystopian future.

Something they may want to consider: Whether reform passes this year or not, the status quo really is untenable. Something will have to change someday. And what Obama and Baucus are proposing is close to the minimum amount of change conceivable. If insurance-industry groups succeed in killing the bill, the lesson will be that appeasement hasn’t worked. And that may mean that next time around, reformers will start thinking big and try to put health care under Democratic control and financed on the basis of solidarity. Industry may vehemently oppose even modest reforms, maybe trying to kill it off entirely. That would be an ugly fight that would mean years of delay in providing help to people who urgently need it. But unless insurers can recognize how much the powers that be are bending over backward to be nice to them, it might be the only way forward in the long run.

Matthew Yglesias is a fellow at the Center for American Progress Action Fund. He is the author of Heads in the Sand: How the Republicans Screw Up Foreign Policy and Foreign Policy Screws Up the Democrats.