2013 and Health Care (a redux)


(I may be repeating myself here.  I don’t know.  You can search through the blog and see.  If I did, my apologies.)

Assuming Mutt closes the deal, count on him to stir the soup and fiddle one again with health care.  Maybe he — or even Obama — could follow the footsteps of Ted Vail.

Theodore N. Vail was president of American Telephone & Telegraph during its salad days, circa 1900.

At that time, telephones had been around for a while, but telephone service was a mish-mash of competing companies and technologies. If you wanted the ability to call everyone in town who had phone service, you may have had as many as five different telephone instruments from five different companies sitting on your desk.

Not only that, but the rates were all over the place and, worse, the farther away you were from the telephone companies’ central offices, the higher the monthly rate — “cream skimming,” we’d call it today. If you were too far away, the company would simply tell you to fuggitaboudit — unless, that is, you wanted to pay (up front) the entire cost of running the line, and it wasn’t cheap.

Kind of like health insurance.

Well, Ted Vail made a bargain with the government. If the government would grant AT&T geographic franchises in which AT&T and its subsidiaries would be the legally enforced monopoly, and guarantee AT&T a reasonable profit, AT&T would voluntarily submit itself to government regulation and provide universal service at uniform rates. (Please make special note of that word “universal.”) Under this scheme AT&T went on to become the most valuable company in the country; not only were the Capitalist Swine who held its stock as happy as clams, so were AT&T’s subscribers.

Return to autumn, 2009: The dung-throwers, thanks to their canards, fictions and scurrilities, have soured the public on any sort of government-run health plan (i.e., Medicare for all), so maybe we should revisit AT&T’s way of doing things. Maybe we should regulate health insurance companies as public utilities in the same way we regulated AT&T. Where AT&T’s plan guaranteed universal service, this plan would guarantee universal coverage. There would be no discrimination for pre-existing conditions. No age bias. No dropping of coverage.

How would such a thing be accomplished? Simply draw a circle on the map, pick the largest provider in that circle, designate it the monopoly and forbid competition. Give that company a reasonable rate of return and, for the public good, regulate the daylights out of it. Everyone living in that franchise area would be covered by a basic plan paid for by a sales tax or a value-added tax with, perhaps, a small means-tested co-pay. Supplemental plans (paying for nose jobs and Botox injections) would be available to those who wanted them, but at non-regulated fees. People would, of course, pony up the doctor’s fee for any and all special treatments they may desire.

Where AT&T was regulated by the Federal Communications Commission and state agencies like the Washington Utilities and Transportation Commission, the new quasi-public/quasi-private health insurance companies would be regulated by new commissions constructed for that purpose. These commissions would have enforcement powers and require the insurance companies to publish tariffs describing their services and rates. Rate hikes and service adjustments would be subject to public scrutiny in open hearings and the commissions, at their discretion, could approve or reject proposed changes. Indeed, the commissions could order necessary changes independent of the companies’ wishes.

To ice the cake, these commissions would also have the power to arbitrate malpractice suits and weed out the quacks who are the source of most such claims. This would satisfy the thirst in many quarters for so-called “tort reform.”

Of course these franchises would have to be large enough to encompass a self-sustaining, self-contained economy or else bedroom communities would have sharply different rates than city cores. Also, to make this especially palatable to the public, regulation would include government approval of pay scales for the employees — as was the case when I worked for Ma Bell many decades ago.

So what’s not to like about this idea? Everybody gets covered and nobody gets dropped. And it’s all private enterprise! True, this plan would cost more than if we went to a pure public plan, but it will cost one hell of a lot less than the mess we have now.

When it came to providing telephone service, the unfettered free market had failed. Today, when it comes to providing health insurance, it has failed again. It’s time for something new.

-Merlin-

PS: Mutt Romney has an overly large head with a surgically enhanced jaw.  He also puts Grecian Formula No 9 and  Brylcreem in his hair. Of course, he might just be wearing a rug — it all depends on if it attracts midges and fruit flies

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