The Purple Health Care Plan (a Plan Democrats and Republicans can like)

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    Apr 06, 2011 7:27 PM GMT
    An interesting proposal - that blends not the Canadian and American systems but more that of Germany, Holland, Switzerland and Israel.

    Lawrence Kotlikoff:
    http://www.zerohedge.com/article/lawrence-kotlikoff-fiscal-crisis-spitting-distance-here-my-proposed-solution

    To that end, I launched www.thepurplehealthplan.org last week to solicit endorsements for what I call the Purple Health Plan - - a proposal that offers common ground to both Republicans and Democrats. To date, five Nobel laureates in economics, George Akerlof, Edmund Phelps, Thomas Schelling, Vernon Smith and William Sharpe, have signed on. So have other prominent economists.

    If you’re a Democrat, don’t worry. This system is more or less what’s in place in Germany, Holland, Switzerland and Israel -- hardly right-wing bastions. If you’re a Republican, don’t worry. This is a voucher system that’s fair to all and keeps government spending from exploding.

    If you like the plan, please endorse it and share it with others. This includes the president and House Speaker John Boehner, who should take the Purple Health Plan and adopt it as their joint proposal.


    From the website:
    http://thepurplehealthplan.org/node/2

    The Purple Healthcare Plan

    We, the undersigned economists, support the following principles governing fundamental healthcare reform and endorse immediate implementation of the Purple Healthcare Plan.

    Principles of Healthcare Reform
    1. All Americans need a basic health plan and should be free to purchase supplemental health insurance coverage.
    2. Healthcare should be privately provided with people free to choose their doctors and hospitals.
    3. All who can pay for their health plans should do so through a combination of existing tax payments and health plan co-payments.
    4. The government's projected healthcare costs must be strictly capped and affordable on a long-term basis.
    5. Health plans should be affordable regardless of one's pre-existing health conditions or risk.
    6. The system must provide strong incentives to prevent overuse of healthcare services and discourage bad healthcare behavior.
    7. Medical malpractice reform is needed to keep providers from engaging in unaffordable defensive medicine.


    The Standard Plan
    1. All Americans receive a voucher each year to purchase a standard plan from the private-plan provider of their choice.
    2. Vouchers are individually risk-adjusted; those with higher expected healthcare costs, based on documented medical conditions, receive larger vouchers.
    3. Participating insurance companies providing standard plans cannot deny coverage.
    4. Each year a panel of doctors sets the coverages of the standard plan subject to a strict budget, namely that the total cost to the government of the vouchers cannot exceed 10 percent of GDP.
    5. Insurance companies providing standard plans contract with private providers to cover their plan participants.
    6. Americans choose doctors and hospitals included in the standard plan they choose.
    7. Plan providers compete and provide incentives to improve participants' health and limit bad health practices.
    8. Plan providers offer supplemental plans to their participants and cannot deny supplemental insurance coverage to their participants.
    9. The government (federal and state) ends the tax exclusion of employer-provided health insurance premiums.
    10. Like all other Americans, Medicare, Medicaid, and health exchange participants are covered by the Purple Health Plan subject to appropriate transition provisions.
    11. The roughly 10 percent of GDP now spent or allocated by federal and state government on these and related programs, as well as on the tax exclusion of employer-provided health insurance premiums, is reallocated to help finance the vouchers.
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    Apr 06, 2011 8:54 PM GMT
    Sorry, but repubs hate europe.

    Wont work, wont even consider it.
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    Apr 06, 2011 8:57 PM GMT
    TropicalMark saidSorry, but repubs hate europe.

    Wont work, wont even consider it.


    Lol - ah, but would you?
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    Apr 06, 2011 10:42 PM GMT
    TropicalMark saidSorry, but repubs hate europe.

    Wont work, wont even consider it.


    Nonsense, I love Europe.
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    Apr 06, 2011 10:45 PM GMT
    mocktwinkie said
    TropicalMark saidSorry, but repubs hate europe.

    Wont work, wont even consider it.


    Nonsense, I love Europe.

    So now you're republican? In another topic, which I can get and link here, you said you were liberal, and in previous ones libertarian.

    Ay-yi-yi
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    Apr 06, 2011 10:55 PM GMT
    I'm not opposed to most of it thought I would want to see more about tort reform.
  • tongun18

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    Apr 06, 2011 11:11 PM GMT
    Interesting find Riddler, could you support this?

    Like Christian, I would like to see more details but at first glance I think I could support this.
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    Apr 06, 2011 11:31 PM GMT
    Frankly, I don't see how it's different from HCR as it passed here in the US. Or, more to the point, I think it would be fairly simple to make some modifications to the existing HCR legislation and approach something like this.
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    Apr 07, 2011 3:09 AM GMT
    Christian73 saidFrankly, I don't see how it's different from HCR as it passed here in the US. Or, more to the point, I think it would be fairly simple to make some modifications to the existing HCR legislation and approach something like this.


    Here's an oped from Kotlikoff where he is pretty scathing of both the Republicans and Democrats:

    http://www.businessweek.com/news/2011-01-05/health-law-s-demise-may-permit-better-plan-laurence-kotlikoff.html

    Don’t get me wrong. I think Obamacare is a third-best answer to our health-care woes. It adds another expensive entitlement -- federally subsidized health exchanges, with no solid cost controls -- to Uncle Sam’s continually skyrocketing Medicare and Medicaid obligations. Moreover, given the way the health-exchange subsidies and employer fines are structured the law will likely lead to the unraveling of employer-based health care, leaving the government paying the bills of the entire population.

    Current System

    The government’s involvement in health care, per se, is no sin. We’re already far down that path. Our private, employer- based health-care system is heavily subsidized -- to the tune of $200 billion through federal and state income tax breaks. Medicare and Medicaid cost federal and state governments another $962 billion. And the uninsured are now being covered, albeit poorly, through emergency room and other services, at another $323 billion in public expense.

    Add it up, and government health-care spending is $1.5 trillion, or more than 10 percent of gross domestic product. We’re spending another $1 trillion privately, making our total bill 17 percent of GDP. Germany’s population is older, but its total health-care bill is only 11 percent of GDP. At an extra 55 percent cost, we’re delivering unequal health care and worse outcomes. On average, Germans live longer and have lower infant mortality.

    ‘Socialized Medicine’
    Our government is heavily involved in health care -- paying 60 cents of each dollar -- for good reason. Left on their own, the private insurers will cherry pick the healthy and charge astronomical premiums for those with pre-existing conditions. This is why one in six Americans is uninsured.

    Call our system “socialized medicine,” “subsidized medicine,” or something else. It doesn’t matter. Whether we are blue, red, or purple, we agree that everyone needs a basic health plan, that everyone who can pay for health insurance, should pay, and that those with bad genes or bad luck (that is, pre-existing conditions), as opposed to persistent bad habits, shouldn’t face higher insurance costs.

    We want universal health insurance. What we don’t want is inefficient and unaffordable universal health insurance. Obamacare delivers both, which explains its reception.


    Have a read of the whole thing - my guess is that you'd probably agree with most of it. And yes, this is a plan that I could definitely support that still allows for flexibility for spending such that it can take out the bloat while keeping room for innovation at the ground level for how services are met. You definitely don't want to wipe out the innovators who are in some cases dramatically reducing the cost of care while improving outcomes (ambulatory care + service providers like qliance or lower cost nurse practitioners in places like Walmart or Walgreens for the minor medical needs).
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    Apr 07, 2011 3:56 PM GMT
    A pundit on the Economist's blog, which has been generally supportive of the current administration (and also endorsed Obama), is fairly supportive of Kotlikoff's plan:

    http://www.economist.com/blogs/democracyinamerica/2011/04/health-care_options

    I like it lots, but it does strike me that the plan's potential to rescue us from Zimbabweisation come 2017 relies on #4's "panel of doctors" to a worrying degree. The explicit aim to keep health-care costs from eating an ever-growing portion of national income seems very necessary. Yet I'm not sure what to expect from the American public and their representatives in Congress when Drs Gawande, Emanuel, Krauthammer, et al. approve coverage chintzier than the lavish medical plan to which the median American has grown accustomed. We are not facing insolvency because of a culture of frugality and self-restraint.


    I think the response here that Kotlikoff might make is that the difference is that users have the ability to buy supplemental insurance over the basic plans that everyone is enrolled in.
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    Apr 10, 2011 1:19 AM GMT
    I don't think anyone disagrees that the American healthcare system is broken (and few think the Canadian system is ideal)... and while there are a lot of details that need to be fleshed out with respect to the Purple Health Care plan, I think it represents a step in a direction that even ideologues can agree with.

    Number of the Week: U.S. Spends 141% More on Health Care:

    http://blogs.wsj.com/economics/2011/04/09/number-of-the-week-u-s-spends-141-more-on-health-care/

    141%: How much more the U.S. spends on health care, per person, than the average OECD nation

    At a time when politicians in Washington are battling over — among other things — the future of the U.S. health-care system, it’s instructive to see just how well that system operates. According to the Organization for Economic Cooperation and Development, we’re doing a terrible job.

    A new report finds that the U.S. spends far more on health care than any of the other 29 OECD nations, and gets less health for its money. Annual public and private health-care spending in the U.S. stands at $7,538 per person, 2.41 times the OECD average and 51% more than the second-biggest spender, Norway. Meanwhile, average U.S. life expectancy is 77.9 years, less than the OECD average of 79.4.

    Improving the health-care system could go a long way toward fixing the U.S. government’s finances. The OECD estimates that if the U.S. reached the efficiency level of the best-performing countries, the government could save the equivalent of 2.7% of economic output every year. That’s enough to solve about a third of the country’s budget-deficit problem.

    The hard part is figuring out how to make the system work better. Here, the report attempts to derive some guidance from the experience of the most successful countries.

    Interestingly, the type of system doesn’t seem to matter much. Countries with state-run systems do about as well on average as countries with private systems. Among the things that do matter: Consumers need to have some skin in the game, through mechanisms such as co-payments; care needs to be well-coordinated among doctors’ offices, hospitals and nursing homes; providers of care need incentives to do a better job, such as pay for performance; and the price and quality of services should be better monitored and easier to see.

    Many of those features are included in the health-care law the U.S. passed last year, though much has yet to be implemented. Improvements are undoubtedly possible. Whatever we decide to do, it’s time we did something.