McCaincare: provocative but vague.

McCaincare: provocative but vague.

McCaincare: provocative but vague.

Gossip, speculation, and scuttlebutt about politics.
Oct. 16 2007 6:30 PM

McCaincare: Provocative but Vague

The health-care primary, Part 5.

(Continued from Page 1)

Susceptibility to the insurance lobby: There's nothing I can find in this plan that would displease insurers. Indeed, McCain proposes eliminating rules that prohibit insurers from selling policies across state lines. There's nothing inherently wrong in that idea, but in implementing it insurers would surely press to eliminate existing consumer protections.

Cost: Not stated, but since the thrust of the plan is to limit expenditures rather than improve health care, that isn't much of an issue.


How universal? The plan isn't universal, butMcCain would extend a tax credit of $2,500 to individuals and $5,000 to families for the purchase of health insurance. That wouldn't come close to covering the market cost of a decent health-insurance plan, but presumably it would increase the proportion of people who purchase health insurance directly to those who receive it through their workplace.

How socialistic? There's no mention anywhere of expanding government-paid health insurance. If McCain's proposed changes to the way Medicare pays hospitals and doctors were mimicked by private health insurers, as they almost certainly would be, you could argue that constituted a pinko intrusion into the marketplace. It would be as ridiculous as the claim Republicans often make that demanding volume discounts for drugs purchased by Medicare—something the Bush administration refused to do when it expanded Medicare to include pharmaceuticals—constituted pinko intrusion into the marketplace. (To be clear, allowing the government to buy senior citizensdrugs is the pinko intrusion, one that was long overdue.) Like demanding bulk discounts, changing the way the government pays doctors and hospitals would merely be a rational exercise of the government's buying power. Calling McCain a parlor pink for proposing such a change would therefore be vile. But McCain's rivals for the Republican nomination will probably do it anyway if his poll numbers rise, and possibly even if they don't.

How disciplined? That depends on how effective McCain is in reining in fee-for-service payments. "You don't want to pay per procedure," a McCain staffer explained to me, "you want to pay per episode, per outcome." This would entail getting the various parties involved in treating a patient for a specific "episode" to coordinate their care (a good in itself with regard to patient care) and send the government a single bill. (As noted above, McCain also wants Medicare to stop paying for medical errors, which sounds reasonable.) Even episode- or outcome-based payments, though, are susceptible to profit-maximizing manipulation if coordination shades into collusion. That's why the best payment reform of all would put doctors on salary. The only way the government could exercise sufficient market leverage to do so, however, would be to institute single-payer health insurance.

Impact on employers: Favorable. The point of the health-care tax credit would be to encourage people to get health insurance on their own rather than through the workplace. As I've written before, I don't see why private businesses should pay for health care in the United States, when they don't have to in other countries.

Longevity: McCaintalks about extending the period of insurance coverage and encouraging portability of health-insurance policies, but still his plan would leave insurers focused mainly on the here-and-now rather than on the patient's health over his lifetime. Like everyone else, McCain talks about promoting competition, but greater competition among health insurers would shorten their time horizons with regard to individual patients, not lengthen them.