Going Forward

After Waterloo

06.28.12 6:10 PM ET

As I've argued below, conservative intransigence on healthcare in 2010 will look ever more reckless with the passing years. Republicans need to move rapidly to a more constructive approach. What would such an approach look like?

Obviously (super-obviously!) I speak only for myself, but here would be the main elements of my approach:

1) Universal coverage has been extended. It won't be retracted, and it shouldn't be retracted. Not only will universal coverage lift a wholly unnecessary misery from the lives of millions, improving the health and welfare of the whole population, but it will also be a spur to economic productivity. Ending the fear of loss of coverage will encourage people to launch new businesses and to change jobs.

2) We should want gradually to sever the connection between employment and coverage for the same reasons as Point 1.

3) We should want to merge the coverage system for under-65s and over-65s. Because over-65s are the largest healthcare consumers, the design of the post-65 program inevitably shapes healthcare for everybody. That design is perverse, freezing in place a fee-for-service model that inflates costs and multiplies procedures rather than maximizing health.

4) We should want to give states the decisive role in defining and shaping healthcare service within their boundaries. The defense of local design of services is an important role for conservatives.

5) We should want to control costs, and indeed to drive them down to levels prevailing in other advanced economies. If the US paid e.g. same 13% that Switzerland pays, rather than the present 17%, that would be the equivalent of getting the entire defense budget for free. Healthcare costs are the hidden drivers of so many US social ills. They explain why education costs run so high (because teachers get generous health benefits) and why wages have stagnated (because productivity gains increasingly are consumed by the cost of maintaining employee benefits).

6) It's important that healthcare be financed in ways that share costs broadly. Highly progressive financing of healthcare programs—as contained in the ACA—invites cost inflation. If the 1% are paying almost all the bill, why should the 99% care about cost control? Yet from the point of view of American growth and competitiveness, costs must not only be controlled, but actively driven down. Only when all feel the burden of cost will all agree on the importance of cost control.

I think that's a pretty conservative program, actually.