Friday, Oct 20, 2017
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Federalism and choice


Sen. Lindsey Graham (R., S.C.) is surrounded by reporters as he arrives at the Senate on Capitol Hill in Washington.


We need some fresh thinking in the United States on health care and health insurance. And the proposal from Sen. Lindsey Graham (R., S.C.), now making the rounds in Washington, may be one small start. He would keep federal health-care funding steady but block grant that funding to the states, giving them wide discretion to create their own systems.

Mr. Graham’s approach may not be fiscally conservative enough for the House, but it appears to be picking up Senate support and has gained the attention of the President.

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To pass, any repeal also needs to be a repair, and the principle of federalism may hold the key.

The ugly truth about modern health care is that it cannot be allocated with market efficiency and remain accessible to most people. America has been trying to have it both ways since the end of World War II, and the result — an incomprehensible patchwork of public subsidies, private insurance, and out-of-pocket costs — is by far the most convoluted and costly health-care system in the developed world.

Yet for all our health-care system’s expense, Americans live shorter lives and get treatment that is mostly inferior to what citizens of other developed countries receive. Its rapidly growing price tag is a cancer on our economy, and the tumor will only keep growing until we truly try some fresh approaches. Real reform is radical reform.

And contrary to what you usually hear, reform can incorporate both conservative and liberal ideas.

The conservative principle of federalism and the liberal cause of a single-payer option could, for example, be combined.

Both sides understand that the source of America’s ballooning health-care costs lies in the system’s vast complexity, which makes government and insurance companies alike unaccountable in keeping costs under control. Liberals rightly recognize that simplifying the health insurance market on free enterprise principles would make insurance utterly unaffordable or simply inaccessible for millions of Americans. But conservatives rightly fear that a health-care service based in Washington would be too far removed from patient needs. They also bridle against the rationing and wait times such a system would require to control costs and equalize access. Canadians in need of a hip or knee replacement wait an average of six months for the procedure. With a much larger population than Canada — or any of the other countries with single-payer health care and comparable governments — America under an equivalent system could see substantially worse waiting periods.

But such a system need not be administered from Washington — a state could do it.

This is where conservatives and liberals could perhaps find common cause: have the states create their own systems — a truly federalized approach. The reason Massachusetts’ and Vermont’s experiments in state-provided health care failed is that they were basically state-sized Medicaid programs added on top of the existing Byzantine structure.

Conservatives have good reason to believe the health-care systems of Europe and the Pacific Rim would translate poorly to our much larger democracy. But they are wrong to deny the relative success of the universal model in those countries. Rather than simply copying and pasting that model, let’s consider an adaptation. We can devolve government health-care administration to the states and thereby revive the great American ideas of federalism and choice. Health care in this decentralized context would afford Americans more options than anywhere else in the world — 49 more options, to be exact.

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