Economic Anxiety and Healthcare Reform

I am reading a very interesting book by Peter Gosselin titled High Wire: The Precarious Financial Lives of American Families that analyzes the current economic situation of many in this country.

Gosselin’s thesis is that the new economy is a bad deal for many American families, because while they may have access to the possibilities of more economic success, they also have a greater chance of taking a great fall from which they may never recover.

He profiles several people who seemed to have it going all their way, until a minor slip puts them in an economic abyss from which they never recover.

Gosselin, a Boston Globe reporter, seems to looks fondly upon the good old days, when most Americans seemed to have more security, if less ability to ascend rapidly up the ladder of success. He is not a big fan of the philosophy of “creative destruction” where the churn in the economy leads to some insecurity but also greater economic progress for the country as a whole.

The safety net for the upwardly mobile is not that secure, Gosselin argues, and the government should do more to make it stronger for everybody.

I don’t agree with all of what Gosselin says, but I agree with his basic assertion that we are living in an age of great economic anxiety. I believe that President Bush’s greatest political liability has been his inability to communicate an effective program to deal with that anxiety.

Looking at the common thread that links all of Gosselin’s profiles, it is clear that the biggest cause of anxiety for most Americans is healthcare costs and healthcare access.

This issue is especially dangerous for Republicans because most Republicans don’t like talking about healthcare. In poll after poll, Democrats are seen as having more credibility than Republicans on this issue.

Democrats have a simple, but wrong, solution on healthcare. Have the government run it. This is the wrong solution, because government control of such a huge part of our economy will be bad for taxpayers, bad for doctors, bad for hospitals, and ultimately bad for patients. It will lead to healthcare rationing, and it will stifle healthcare innovation.

But the idea of government-run healthcare is gaining more traction, and not only from labor unions and left-wing Democrats. Within the business community, more and more business leaders are toying with the idea of just having the government deal with the increasing burden of healthcare costs.

Some Republicans believe that the best solution to the healthcare mess is to give individuals more purchasing power, so they can use the power of the marketplace to drive down costs. But I am not sure if the majority of Americans are comfortable with this model. My guess is that most want somebody else to pick up their healthcare tab. For the last hundred years or so, that tab has been paid by their employer.

We shouldn’t just throw in the towel on the employer-based healthcare system. We should seek ways to strengthen that relationship while creating incentives to drive down costs, whether through health IT, wellness initiatives or malpractice reforms. And for small businesses, allowing them to band together to offer a bigger pool for risk management is an idea that needs to be tried tomorrow.

It is not practical to present a comprehensive plan that will cure every American of their intense bouts with economic anxiety. But it is possible to come up with common-sense plans to deal with some of the root causes of that anxiety. Healthcare is a big driver thereof, and coming up with credible plan and a better way to communicate that plan should be a priority for Republicans in the coming election.


More in Economy & Budget

Federal fiscal indecision causes uncertainty for states

Read more »