Health Care: Too Big to Fail

In the frenzy over jump-starting the economy, the House stimulus bill includes, among other straws being grasped, $117 billion of spending for health care, most of it to maintain coverage for the disabled and newly poor. Otherwise, the political consensus is that we can't "afford" to reform the system.

If anything, there is a stronger case to be made that we can't afford not to. Paul Krugman scratches the surface today with the argument that "helping families purchase health insurance as part of a universal coverage plan would be at least as effective a way of boosting the economy as the tax breaks that make up roughly a third of the stimulus plan--and it would have the added benefit of directly helping families get through the crisis, ending one of the major sources of Americans’ current anxiety."

He cites research showing that Obama's campaign promise of universal coverage would add “only” about $104 billion to federal spending next year, but this overlooks the huge possible benefits in reforming a system that rewards greed and inefficiency.

Start with health care fraud by hospitals, doctors, pharmacists and other care providers. which the FBI estimates at between $60 and $100 billion a year. Stopping that could be a small growth industry to employ some of the analysts being laid off by the banks and Wall Street, to say nothing of starting to fix a system that has been criminalizing the healing profession in order to let its members survive.

But the big payoff would be in transferring the estimated one-third of the $2.4 trillion-and-counting that goes for insurer overhead and profits into patient care.

In the current economic climate, the SCHIP expansion of coverage for children which George W. Bush resisted on "philosophical" grounds is about to be signed by the new president, and the money in the House stimulus bill has aroused Conservative fears about "nationalizing" the health care system.

Just so, and it opens the way for a healthy debate over whether the current health care system, like greedy Wall Street, is really "too big to fail" and why it can't evolve toward the single-payer system that rational analysts favor.

Krugman cites Rahm Emanuel, the White House chief of staff, declaring that “you never want a serious crisis to go to waste” and points out that FDR "was able to enact Social Security in part because the Great Depression highlighted the need for a stronger social safety net."

In repairing the economy, health care can be both part of the stimulus and the 21st century social safety net.