A Newish Approach to Healthcare

Interesting frontpage story in today's Wall Street Journal. In summary:

Starting in 2006, the Netherlands has required all adults to buy their own health insurance, or pay a penalty. And insurers must offer policy to all comers, no matter how sick or old they are, WSJ’s Gautam Naik reports. The government subsidizes policies for adults who can’t afford to pay premiums and makes “risk-equalization” payments to insurers that cover the elderly and those with some chronic conditions such as diabetes. The current Dutch program differs from plans in other parts of Europe, which mostly offer national health care, and the U.S., which largely relies on employers paying for the bulk of coverage.

The idea behind the Dutch is that individuals will enroll in health plans that provide the coverage they need instead of a one-size-fits-all plan chosen by an employer. And individuals will pay more attention to health costs, which are largely ignored when the government picks up the tab. The Dutch want the "risk-equalization" incentive payments to motivate insurers to cover more than just healthy customers. It's too early to tell if the Dutch treatment to manage costs and improve quality will become a model for the rest of the world. But anecdotal reports show things are moving in the right direction.

Insurer Rival UVIT offered to pay the gym membership fee for Rianne Boel, who was overweight and diabetic, if she lost 7.5% of her weight in 15 months. Boel cut back on french fries and pizza and started walking, cycling and rowing. The changes helped her reach the goal. “I don’t like exercising,” Boel says, “but at least I can now walk without a stick." 

And the competitive nature of the local healthcare field is such that premiums have stayed modest — substantially below the optimistic estimates of the Dutch state.

The headline of the WSJ piece is "In Holland, Some See Model For U.S. Health-Care System," and I do think the Dutch are on to something here. When I recently declared myself a "reluctant socialist" in the healthcare debate, this is akin to what I had in mind — a free market whose U.S.-style excesses are tempered by limited government interference.

I realize that by saying that, I once again dilute libertarian tenets to reach for a pragmatic solution. So be it. 300 million people's lives are more important to me than political purity.

Comments

[somebody]

You seem to miss the point that to a libertarian liberty is the most important tenet and every single aspect of life only gets better with more freedom. This includes health care because once again, as in this case, other people will force you to live your life differently than you see fit. And let's not forget all the economic/innovative loss that occurs because of mandated employee insurance. Hey, why find a new miracle drug for cancer when we can just chemo everybody? I have a better solution. Instead of worrying about me, why don't your worry about yourself and I'll worry about myself. You dismiss free market health care as political libertarian purity, but a true libertarian knows the free market works for everyone's advantage, regardless of the service. Please.

[Piled high & Deep]

"a true libertarian knows the free market works for everyone's advantage, regardless of the service"

I would agree that in general the free market works for most people's advantage; however, to say it always works for everyone for every service is ludicrous, and seems to be the result of a weak mind seeking solace in ideological purity. RvB is promoting a practical solution to address a shortcoming in free markets with as little interference as possible. While I would not likely support a 'pure' libertarian, I certainly wish more politicians would adopt such an approach.
PhD

[Martin Owens]

This is the same principle that any supermarket lives by. If you need pineapples, or toothpaste, or ice cream, they got it in there. But you fill your own cart- you know what you want.

Now imagine you walk in there with a voucher from your boss, and like it or not you get a case of canned corned beef, 20 lbs of potatoes, and a basket of mangoes ( which are fashionable now- who cares if you're allergic?). Same ration for everybody whether you live alone or have eight kids. This is the arrangement all the planners of " health care" (whatever that is) want us to have.

While I would prefer a pure market solution, it would seem the Dutch have got it right, more or less, by letting the market stabilize itself.

[Dave]

As much as I like the idea of pure libertarianism I just don't think it will work as a form of government. The market does not work for everyones best interest. We had that in the days before government regulation. Remember the Robber Barons of the 19th and early 20th centuries? Remember coal miners and steel workers that made so little that they were practically slaves? It is human nature that those in power will do anything to gain more power and kill anything that tries to take it away. That's the major problem we have with government all over the world now but if you completely remove the regulators then industry will just take it's place as the new masters.

I agree Roger, I think the Dutch may have come up with a workable solution. I had a similar idea for this country a few years back. I would give all the health insurance companies utility status so that profits could be regulated. Require them to insure everyone and require anyone over 18 not covered under a policy by someone else to buy their own coverage. All monies would be paid into a fund and dispersed to the companies. The government could directly subsidize low income participants and any left over money could be divvied up to make sure all the companies met their utility regulated profit levels. It needs a little work but I think it could be worked out. Of course we would also need some tort reform to keep the damn trial lawyers from making a cash cow out of it and causing rates to go up.

[Tony]

The details matter*, of course, but regardless of whether this is optimal, it's the right direction. As a libertarian it's easy to get caught up in seeking the perfect, while ignoring that progress towards the perpetually elusive perfect is vital. A private system that puts people in control and provides a government safe-guard for those who presumably can't help themselves is far better than any nationalized system.

* I'm not keen on the mandatory part, but it's a lesser quibble in the larger debate.

[Timothy]

Rogier: Your pragmatic solution may be the best option in an array of sup-optimal choices. At this point I take it as given that most parts of the electorate will demand SOMETHING BE DONE, so "leave it alone and let normal market mechanisms work" doesn't seem like it's a politically feasible solution.

HSA+High Deductible Insurance seems like a good option, but in order to avoid Britain's NHS or something equally dreadful, there may need to be some sort of government fiddling to get that to happen.

[curiousgemini25@hotmail.com]

It seems like the best of both worlds. I thought the Dutch would be more socialistic in thier healthcare, but, this is clearly a more pragmatic approach.