Health-care isn’t the first boon that President Obama tried to give us through a public-private partnership. When he took office, more than 25 percent of US home mortgages were underwater—meaning that people owed more on their houses than they could get if they tried to sell them. The president offered those homeowners debt relief through banks. Now he’s offering healthcare through insurance companies.
In both cases, the administration shied away from direct government aid. Instead, it subsidized private companies to serve the people. To get your government-subsidized mortgage modification, you applied at your bank; to get your government-mandated health coverage, you buy private insurance.
Let a Hundred Middlemen Bloom
In other countries with national health plans, a variety of independent healthcare providers—hospitals, doctors and clinics, among others—deliver medical care, while the government doles out the compensation. They let a hundred healthcare providers bloom, but there’s only a single payer. If the US moved to single-payer healthcare, however, what would happen to the private health insurance business?
In the 1990s, the conservative Heritage Foundation floated the idea of extending health coverage to more Americans via government exchanges or “connectors” that would funnel individual buyers to competing, for-profit health insurance companies. In other words, let a hundred middlemen bloom.
On the face of it, such a plan would seem expensive, since it means supporting two bureaucracies, one of which would be obliged to take profits for investors. Meanwhile, doctors would still have the expense of trying to collect from multiple insurers with reasons to stall. But the Heritage plan had one great advantage. Since Harry Truman, American presidents have tried unsuccessfully to get us national healthcare. The exchange system, however awkward it might be, pacified the insurance companies, which had previously spent millions of dollars to defeat other plans for “socialized medicine.” With the support of those companies for a program that not only kept them in the picture but also promised to deliver millions of new, subsidized customers, Obama gave us a national healthcare law.