Improve health care

Health care is an important issue, both nationally and for Washington University.

In 2006, there were 47 million Americans, or roughly 15 percent of the population, without health insurance. While this number does include many who are eligible for Medicaid but have not chosen to sign up, it is still a sobering statistic. The wealthiest country in the world should not be leaving so many of its own behind. The next president must take measures to ensure that this insurance gap is closed within the next four years.

At Wash. U., the administration has worked to tackle this problem by implementing a university-wide health insurance program for students. This plan ensures that uninsured students do not fall through the cracks into bankruptcy or worse due to catastrophic health problems. However, many Wash. U. students are understandably dissatisfied with the health insurance plan offered by the University. The plan’s coverage seems meager, and students who are already covered by their parents’ insurance reasonably ask why they should have to pay for coverage that could not get used.

Ultimately, however, the concerns about Wash. U.’s particular plan only obscure a much bigger and more important issue. In a country where health care was more widely available, the issue of students buying into a plan they will not use would not arise in the first place. The fact that the University must take on such an inefficient plan because of the high risk of uninsured students is a serious problem.

At the root of many of our health care problems is the standard method of health insurance provision in the U.S.: as an employee benefit. Under the current system, the money spent by employers to insure their employees is tax exempt. The unemployed or self-employed, on the other hand, must pay for health insurance plans out of their taxable income. Because of this, and the staggering price of private insurance, people overwhelmingly acquire health insurance through their employers.

This method of provision must be scrapped or strongly supplemented. With the stakes of unemployment so high, few will be willing to remain outside the workforce for even a short period of time. This leads to inflexible labor markets and inefficient outcomes, as people will often be unwilling to strike out on their own as entrepreneurs or leave bad jobs to find better employment. This method of provision is bad even for employers such as GM who are now finding themselves unable to keep up with rising insurance costs. Furthermore, the unemployed are precisely those who are most at risk of being overcome by health care costs, as they have little money to spare to purchase private insurance.

How exactly we will move away from employer-provided coverage is unclear and up for debate. But whatever changes are decided upon, the next president must have a plan for how we are to control rising health care costs that threaten to spiral out of control.

The United States currently spends about 16 percent of its national income on health care, far more than any other nation in the world, and the costs are projected to keep rising in the future. This is not a sustainable path, and health care spending, like everything else, is subject to Stein’s Law: If something cannot go on forever, it will stop. Difficult choices will have to be made about how to contain future spending if health coverage is to become more widespread. Do we force the insured to bear some of the costs of their coverage to prevent extravagant consumption? Do we limit the coverage of medical procedures with high costs and low benefits? We do not know the answer to these questions, but it is crucial that they be asked.

These are difficult problems, without easy solutions or silver bullets. However, this only makes it all more important that the next president should devote a great deal of effort to find the best way forward.