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February 09, 2007

Wal-Mart and SEIU: Who drank the Kool-Aid?

Wal-Mart and SEIU, together with other large employer and union reps, formed the Better Health Care Together coalition and held a press conference yesterday.  Check out coverage in the N.Y. Times and the excellent roundup (including reactions from all angles) from the Kaiser Network's Daily Health Policy ReportThe latter summarized news reports thus:

The purpose of the coalition -- called Better Health Care Together -- is to "end the nation's reliance on employer-backed health insurance and develop a system for providing universal low-cost coverage within five years."  While the coalition offered no specific plan, it outlined four broad themes to fulfill this purpose: health coverage for every U.S. resident by 2012; shared financial responsibility by businesses, government and individuals; a sense of personal responsibility for maintaining health; and a more efficient health care system.

Summit to start working out the details will be held in May.

So, who drank the Kool-Aid? 

Unions see the writing on the wall -- generous employment-based benefit packages are contributing to layoffs and buyouts, so unions need to serve their membership (and themselves, by ensuring that they can stave off loss of membership through buyouts, early retirements, etc.) by rejiggering this piece of the social contract.

Big employers are eager to embrace the President's rhetoric about decoupling health care coverage from employment because it's so damn expensive.

And now folks on both sides of the table come together with this pabulum.

No one can argue against the prompt roll-out of low-cost universal coverage that increases personal responsibility and consumer-directedness of care, and also increases the efficiency of the U.S. health care system.  But what what does it really mean? 

So far, it just sounds like cost-shifting to individuals with a vanishing tax benefit (medical inflation outpaces general inflation, so the value of the President's proposed tax benefit will disappear over time).  Consumer-directed health care -- in the form of HSAs and HDHPs -- still hasn't worked out all the kinks. 

Nobody really knows if this will work.  Maybe it will.  But for now, this exercise is generating more heat than light.

Update 2/9/07: For a more eloquent dissection of the current band-aid approach to fixing the health care coverage system in this country, together with a broad-brush proposal for sweeping reform (slightly more specific than that of the BHCT coalition), see the Victor Fuchs and Ezekiel Emanuel piece in Wednesday's Washington Post.  (See also further discussion and link to a related Fuchs and Emanuel paper at the Health Affairs Blog.)  I agree that wholesale reform would probably be preferable to the incrementalism being bandied about in the political theatre, but I fear it is about as likely to be enacted as "HillaryCare."

-- David Harlow   


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You state: "No one can argue against the prompt roll-out of low-cost universal coverage that increases personal responsibility and consumer-directedness of care."
Ewe Reinhardt has argued that consumer directed health care is just the latest gimmick we Americans have developed to deal with the health insurance crisis. We cannot have consumer directed health care at this time. I cannot direct my health care if I don't know what the care costs or what the quality is. The market forces that would generally drive lower cost/higher quality don't seem to work in health care. I am a health care provider, and I agree with what Professor Reinhardt once said: Americans don't have the stomach for what it will take to reform health care. We don't want to say no to anyone, nor do we want to spare any expense no matter how hopeless the case might be. And, we live a reckless lifestyle--evidenced for example by our obesity epidemic. I am suspect of the motives of Wal-Mart et al. I believe they want to save themselves money by trying to slip out of a social contract (employer based health insurance) that has been in place since WWII. If we are going down this path, I'd rather we not cloud the issue with rhetoric about patient safety, efficiency, etc., and state what it is really about--money. Lets make US employers and the government honest about what they're doing.

Dan --

Thanks for keeping me honest. I agree with Uwe (and you) on the quesiton of CDHPs, and I believe my post reflects agreement with your closing point on changes to the social contract of emplyment-based health insurance.

Re: CDHP's, I was saying -- in shorthand -- that they *can* work, assuming much better information available to consumers than we have today. At some point, they could be an important component of the health care system of the future. See some of my earlier posts on this subject, e.g.,

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