Before he became an outstanding governor of Tennessee, Phil Bredesen was a highly successful health-care entrepreneur. And I doubt whether anyone else in the land combines his grasp of the nation's health-care system from the perspective of both public and private sectors.
So when Phil Bredesen speaks on health-care issues, people ought to listen. His recent pronouncements that have gotten the most attention have centered on concerns about the affordability of the Affordable Care Act that Congress enacted last year. He's labeled its provisions that would place anyone with income less than 133 percent of the federal poverty line on state Medicaid rolls as, "The mother of all unfunded mandates." And he's warned that the health insurance subsidies provided for anyone making up to 400 percent of the FPL will probably cost far more than official estimates.
Less attention has been paid to his indictment of the entire foundation on which the act is based. But unlike the act's critics on the right who mainly lambast its thrust to make health insurance mandatory or those who lambast its failure to "bend down" health care's escalating cost curve, Bredesen doesn't stop with criticism. Rather, he propounds a sweeping change in the nation's health-care construct and a set of building blocks on which it would be erected.
These are all embodied in his recently published book, Fresh Medicine. How Bredesen found the time to author a book while resolutely guiding the state through the worst economic downturn since the Great Depression is almost beyond me. It's certainly a further testament to the acumen and energy of a man for whom multi-tasking is almost second nature.
To be sure, many of his principles and prescriptions have been espoused by others, but the ways in which he has assembled them are original, as far as I can tell. And unlike his progressive yet pragmatic modus operandi as governor, Bredesen's blueprint for achieving a national health-care system with universal coverage is visionary and, as he acknowledges, probably not grounded in political reality in the short run.
For starters, he asserts, "American health care needs to be set on a new foundation. Too many things are wrong, not from malice or ignorance, but just as the result of the accumulation of structures over the years that have outlived their usefulness." One of the first things to go is "the insurance paradigm for how we pay for health care," which he contends is "at the root of the perverse incentives that damage our health-care system."
In its place, Bredesen would build on the Social Security model under which health care for all citizens would be funded by payroll taxes into a trust fund for which they would receive a voucher that covers what he terms a "standard plan" of benefits: "a set of services that meet the reasonable health-care requirements of any individual." (Just how these would be determined isn't clear, but Bredesen stresses that the trust fund must be kept actuarially sound and will take "some very aggressive—draconian—cost management.")
For critics who would brand this government-run health care, Bredesen insists that such is not the case. "We'll begin with the concept that the proper role of government is to raise the money that it takes to run a comprehensive health-care system and then back away and use the private sector—both nonprofit and for-profit—to deliver it," he writes.
To deliver the care, Bredesen envisions the formation of what he terms Systems of Care. These systems might be outgrowths of the health-insurance companies of the present, hospital systems, or other provider organizations. But they would have to be integrated systems of care surmounting what he perceives to be the fragmented way in which health care is mostly delivered today. He holds out Kaiser Permanente in California and the Mayo Clinic as the closest models.
The Systems of Care would be licensed and regulated by the states, and Bredesen presumes there would be multiple, competing systems in each of them. The competition would be based, per one of his cardinal principles, on their quality of care as measured by standards set by an American Medical Standards Panel that Bredesen would establish as a "government chartered but independent agency."
The AMSP would draw upon the types of measurements already put in place by the National Committee on Quality Assurance, a highly regarded not-for-profit organization. Bredesen acknowledges that the standards and their metrics will have to become much more extensive than they are today, and he envisions the AMSP incorporating all of them into what he labels a Red Book that will serve as "the dashboard that we'll use to actually measure quality."
Each System of Care would then be subject to a National Independent Quality Audit for which Bredesen suggests that NCQA might be responsible or formative. Bredesen believes that these metrics can, in time, be used to "assign a single numerical score to every System of Care in the country." These widely publicized scores can then be used by everyone in making their choice of health-care system.
Basing universal health care on a Social Security-like trust fund—funded by a payroll tax—represents a far more equitable and efficient delivery system than the hodgepodge of ways in which the public or private sectors would pay for it under the ACA, Bredesen postulates. For one, "it's firmly grounded in a sense of dignity and fairness...and doesn't appear to citizens as some government largesse." No one would be means tested for eligibility as with Medicaid or premium subsidies, and no one's coverage would be jeopardized when they change or lose their jobs as under employer-based insurance plans.
Bredesen reckons that a payroll tax on the order of 20 percent would be needed with employers paying three-fourths of it and employees one-fourth (as opposed to the 50-50 basis on which Social Security payroll taxes are levied). He justifies the higher employer share on grounds that it approximates the split under most employer health plans. To those who may be shocked by the prospect of a new 20 percent payroll tax, he responds that, "for most middle-income Americans who have employer-sponsored health insurance today—which is most middle-income Americans—this actually represents a decrease in what they and their employers would already be paying."
Anticipating contentions that the standard plan of benefits covered by his proposed vouchers would result in rationing of care, Bredesen has this to say: "Politicians may and will fulminate at length against ‘rationing,' but the day is rapidly coming when, say, a third of all Americans can extend their lives for a couple of years with treatments that cost a large fraction of their lifetime earnings. When that happens, we start running out of other people to pay for what we want. We have some choices to make. Political leaders need to trust Americans—we as a people are perfectly capable of making very difficult choices if we can see and feel not only the benefits, but also the costs. We do it all the time. When Americans are presented with these choices in a clear way, they will likely become the most powerful force we have for containing costs."