Tuesday, January 30, 2007

Some thoughts on universal healthcare

 The best universally-accessible health care would have the following attributes:

1. Preventive care is preferred to emergency care.
2. Inexpensive care is preferred to expensive care of equal effectiveness.
3. Necessary care is preferred to cosmetic (or superfluous) care.

In addition, you want people to get the care they need, but conserve resources wherever possible. Since people will not do this when others pick up the check, you have to appeal to their own self-interest. We will add the following attributes:

4. Everyone pays something.
5. Every poor health care decision will have financial consequences (if you're a hypochondriac, you'll pay for it).
6. Every good health care decision will have financial benefits (if you go in for regular checkups, the amount taken out of your paycheck will almost certainly go down).
7. Interest will be paid to the account for surpluses and removed from the account for shortfalls.

Basically, I was thinking of a variation of the health savings account. People would have money deducted from their income and placed into an account, the amount depending on their actuarial risk, pre-existing conditions, and dependents. To prevent people from being forced into bankruptcy, there would be a graduated rate that would be the absolute maximum a person would have to pay at once (poor people would have a lower percentage than rich people), but any shortfall would be a loan on the account, and their rate would be set equal to the maxixum allowable until the debt and interest was paid off. If there is an account shortfall for all Americans, then there would be a minimum, graduated rate set to bring it into balance.

If you made a graph of it, you would have income on the horizontal axis, percentage tax on the vertical axis, another horizontal line at the maximum cap (for argument, say at 50%), a sloped line from the origin to the upper right that crosses the cap (graduated upper rate), and a much smaller, sloped line from the origin that also crosses the upper cap somewhere in the far distance (lower graduated rate). Everyone's rates would fall somewhere in that triangle.

To encourage smart spending toward the end of life, I'd add the following two items:

8. A portion of the funds remaining in an account would be passed on to a person's heirs.
9. A portion of a person's estate will be used to help settle any account deficits.