McCain's prescription for health care is very different from Hillary Clinton's top heavy, government-oriented plan, but it also contrasts greatly with those of his Republican rivals, Rudy Giuliani and Mitt Romney. Unlike Giuliani, Romney, and all of the Democrat candidates, McCain's focus is not on insuring more people. Instead, McCain's approach is to make health insurance more affordable:
From the Wall Street Journal (registration required):
While the debate among the presidential candidates so far has focused on how to cover more people, Mr. McCain's strategy of attacking spiraling costs could provide a compelling argument for voters. The high cost of care affects all voters, the majority of whom have health insurance but may be frustrated with rising premiums, co-payments and other out-of-pocket costs....
Sen. McCain, who hasn't taken a leadership role on health in the past, has compiled a collection of cost-cutting ideas, many of which are supported by Democrats as well. His proposals include promoting generic drugs and biologics, supporting retail walk-in clinics at unconventional locations such as Wal-Mart Stores, and shifting some care to nurse practitioners because they are cheaper than doctors. The plan will also espouse setting national standards for measuring treatments and outcomes, and allowing doctors to practice medicine across state lines.
Mr. McCain would also use Medicare as a "lever" for pushing change in the rest of the health system by increasing payments, for instance, to better coordinate care, and cutting payments because of preventable errors and unnecessary hospitalizations.
His advisers acknowledged that some of these ideas won't be politically popular, but said Mr. McCain is eager to take on the opposition. Doctors and hospitals are likely to object to some of these proposals, though they are all within the mainstream of Republican thinking on health.
McCain may be onto something. According to the Journal:
Consensus is growing among academics that continued growth of health-care spending is unsustainable and that the U.S. must do something to bring costs under control. The U.S. government estimates health spending at 16% of the gross domestic product in 2006 and projects it to rise to 20% of total U.S. spending by 2015. The result could be that more small and medium-size businesses drop coverage for their employees.
The impact of increased spending on the federal government is also expected to be acute. Under current trends, the Congressional Budget Office projects that by 2050, spending on Medicare and Medicaid alone will eat up nearly one in four federal dollars. Any effort to subsidize health coverage for the uninsured would quickly be overwhelmed if health costs escalate faster than the government subsidies.
It will be interesting to see how this plays out over the course of the campaign. Here's an excerpt of the Healthcare Marketplace and Policy Review's response:
Like all of the other presidential health care proposals, this is a political proposal in outline form--well short on details.
We will need a great deal more detail than a few bullet points. But generally, Senator McCain has prompted many more questions than he has provided answers.
His program won't cost a lot since most of his spending comes from rearranging the existing tax exemption on employer-provided health insurance. But it is not at all clear how he would give the individual health insurance market the fundamental overhaul it would need to become the primary insurance market he would make it. Age rating, medical underwriting, and pre-existing conditions are on top of that list of overhaul questions.
He also needs to show us how a $5,000 tax credit will give a near-poor family enough assistance to buy a health insurance policy with meaningful benefits when the average cost of employer-provided care is $12,000 a year. Even HSA-style employer-based plans still develop costs in the $10,000 area. Cheaper plans are available to young and healthy people in the individual market but it will be the sick and old we will need to hear more about. Beware of claims that cheap individual insurance is already available--it is if you can pass medical underwriting.
He says that cost containment and improved quality are essential to a sustainable system--and he is clearly right on that point. But he has very little in the way of cost and quality improvement in his outline. The primary proposal here is to put providers at risk in Medicare by taking us back to the days when the market believed the same thing and unsuccessfully tried to implement capitation.
His system would also take many years to implement before it finally begins delivering the benefits he believes it has the potential to give us. How would he manage the transition and what would we do with 47 million uninsured in the meantime?
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