Jason Shafrin, author of the Healthcare Economist blog, wrote an excellent one-page summary differentiating Obama’s and McCain’s strategies for healthcare reform: http://healthcare-economist.com/2008/08/18/obama-vs-mccain-health-care-policies/. Obama’s government-led plan focuses on creation of larger risk pools and compulsary health insurance for children and young adults. McCain’s plan is based on individual agency and free market principles.
If health is a right, as decided by the World Health Organization, and only governments can provide citizens with real rights, then the government must be involved in ensuring its population has the capability to access a basic package of health services. The healthcare system is fundamentally different than the marketplace, which means consumers interact with the healthcare system very differently. Some of the differences:
- Information Monopoly – Consumers cannot easily make informed decisions about what services should be provided or how much they should pay for them.
- Emergencies – Most consumers, especially sick ones, don’t have time or the knowledge to navigate the health care system to find the best deal. Obama said it very succintly: “When your child gets sick, you don’t go shopping for the best bargain.”
- Insurance Pools – Insurance plans require large subscriber bases to spread risk and share costs. The private, state-specific insurance plans have not been capable of creating large enough pools to bring costs down.
- False Competition – The open marketplace forces companies to compete for customers on prices and quality. In healthcare, companies compete for market shares but not in a way that improves quality. Costs are usually lowered at the expense of quality. Consumers will sacrifice on the comprehensiveness of their insurance plan for lowered premiums without realizing that the uncovered services statistically improve population health.