My Perspective: McCain’s Health Care Plan

[Thanks John for letting me guest post at RWN, now on with the show…]

On Tuesday, I was one of the many bloggers and members of the media on a conference call with two of Team McCain’s top advisers, senior policy advisor Doug Holtz-Eakin and former Hewlett-Packard CEO Carly Fiorina. (Unrelated to health care but you can click here to see my video interview with Carly a few weeks ago.)

A thorough overview of McCain’s health care plan can be viewed by clicking here.

As a single male at the age of 29 with little real need for health care, as a technology enthusiast and a small businessman, two particular nuggets jumped out at me worth fleshing out. I’ll also note by way of disclosure that one of my clients operates in the health care space so I understand the issue from all sides.

Use of Technology to Provide Better Health Care

The first item of interest is that one of the pillars of McCain’s health care plan is the smarter embrace of technology to help provide more helpful information to consumers. As a free-market health care enthusiast, this makes perfect sense.

As Carly noted on Tuesday, our doctors should be posting their prices, rates, and customer ratings on the Internet. After all, as someone who seldom uses health care but pays for it through my HSA (Health Savings Account), I’m interested in finding the best quality of health care for the lowest price. That’s just commonsense.

But naturally, I wanted to dig in more on this point about how technology could add value to our health care delivery system.

In an exclusive follow-up interview today with Carly, I asked her to elaborate:

“One of the things that McCain will push for is to use technology to require hospitals and doctors to post prices, results, and what I’ll call ‘customer feedback’ on the Internet.

“In full spirit of disclosure, I serve on the Board for Revolution Health.

“Rating services already exist today that effectively rate health care providers and doctors. But what doesn’t exist is the requirement to do it.

“People deserve to see how health care providers perform with regard to effectiveness and efficiency. Health care providers need to treat patients like customers.”

Treating patients like customers — novel idea.

I followed-up with Carly and asked her what, if any, opposition she expects to see from McCain’s requirement:

“Opposition? Absolutely. But it takes someone with strong leadership and the will to do this. People have been talking about changing health care for a long time but there hasn’t been the leadership to actually do it.

“Look, anytime you try and change something there are a host of vested interests that rise up to keep the status quo. Some health care providers will resist. They will resist because they may feel like they will not stack up well. They will resist because customers will become more demanding. But, that’s the point of doing this — giving patients more information to make informed decisions and the ability to choose.

“Health care is priced by procedure/test so the more you have the more it costs. It’s one of the reasons why McCain would push for tort reform. It is also why he’d begin to focus on the outcomes of treatment. For example, if a diabetic patient goes in for treatment, you’d look at the outcome of the treatment a year or so later. That effect is what would be paid for.”

Regarding opposition to transparency and openness in health care, I don’t think McCain will meet it with Docs. In fact, the American Medical Association has already started moving forward on this issue by implementing efforts “to enhancing quality of care and patient safety by taking the lead in the development, testing, and maintenance of evidence-based clinical performance measures and measurement resources for physicians.”

As free-marketers, we should continue to encourage both John McCain and the health care community to better embrace the Internet to give us as much information as possible.

Indeed, John McCain may be a few years wiser than me, but he (and the team he surrounds himself with) clearly understand the importance of utilizing the Internet to help facilitate choice for consumers with regard to their health care. Wise indeed.

Farewell Employer-Sponsored Health Care?

The other item which jumped out at me is the proposed transition away from the system which allows employers to provide health care benefits for their employees tax-free to a system that offers employees a $5,000 per family tax break to pay for the family’s health care (independent of the employer).

On the conference call, both Carly and Doug responded to multiple questions about this point by noting that employers will continue to provide health care benefits because it’s a benefit that’s attractive to a skilled workforce. They continued by saying that the goal of this transition is the need to expand health care beyond the employer-based system.

But from where I sit as a small businessman and an employer who pays 100% of my employees’ health care benefits, this raised my eyebrows. As they were talking about it, I thought to myself whether or not I’d continue to provide health care benefits for my employees.

In a recent study released by the non-partisan Commonwealth Fund which took on the task of dissecting the health care proposals offered by all of the candidates (including some of those who are no longer in the race), on this point regarding the future of employer-sponsored health care under McCain’s plan (and other Republicans) it found:

Most of the Republican candidates have proposed eliminating or changing this special tax treatment and replacing it with a new standard income tax deduction that would apply to anyone with private insurance, either employer-based or individual market. This change has the potential to weaken the incentive of some employers, particularly small employers, to continue providing health coverage to their employees if they knew their employees could gain an equivalent tax deduction if they purchased coverage in the individual market. The Republican candidates have not addressed how they would replace any lost employer financing.

So as a small business owner who intends to grow and hire more employees in the immediate future, how does this affect my decision to continue providing health care coverage to my employees?

I asked Carly today how McCain’s plan would keep me in the system of providing benefits to my employees and she said:

“Employers can continue to offer health care to their employees. And if they do so they will continue to receive a tax-credit. But the individual will have the choice. Either the employer can provide the health care benefit and get the tax benefit or the individual can decide to not opt-in to health care coverage and would benefit from the tax credit. Similarly, John McCain proposed a Flat Tax system where he said there will be a choice — we will leave the current system in place or an individual can opt-in to the new system.”

While I generally support every other bullet point on McCain’s health care plan (especially over the government-run health care proposals offered by the liberals) I still have questions about the above point.

I’m all for choice — who isn’t? But critics of this point in McCain’s plan point out that while employers would still receive a tax-incentive to provide health care benefits, the employee (who often pays the other 50% or so of the premium) would not receive a tax benefit UNLESS they leave the employer-based system.

This could be troubling and could jeopardize the employer-based system.

I sent my contact with Carly a follow-up note and they said, “McCain’s plan puts power and choice in the hands of the employee. The employee can evaluate and make their choice based on their needs.”

Sadly, this doesn’t really answer the question. We’ll have to continue to look into this point.

Perhaps there are others in the small business community, like me, who have similar concerns? Weigh in on the comments of this thread let us know what you think.

David All is the co-founder of Slatecard.com, a Republican counter to ActBlue which was called a “Facebook for Republican campaign donors” by Wired, is the founder of TechRepublican.com and is the President of the David All Group.

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