The Health Care Crisis and What to Do About It
by Paul Krugman & Robin Wells

Acknowledging that the U.S. spends on average twice as much money on health care as other industrialized nations, and has overall worse outcomes, Paul Krugman’s & Robin Wells’ commentary ("The Health Care Crisis and What to Do About It," The New York Review of Books, 3/23/06) is a good overview of the problem of U.S. health care and why employer-provided health care is unraveling. The authors attribute the U.S. health care crisis in part to high dependence on fragmented, for–profit private insurances, hospitals and numerous middlemen that add cost without adding value.

Noting "the strange persistence, in the teeth of all available evidence, of the belief that the private sector can provide health insurance more efficiently than the government," Krugman and Wells remark that free-market ideology is "wholly inappropriate to health care issues." As many observe, health is not a commodity, like a car or house. Krugman and Wells note that failure of political will to stand up to the insurance and pharmaceutical lobbies is a key factor to lack of meaningful health care reform. Lacking political will to push for the economically smarter single payer system, the authors say "things will have to get much worse before reality can break through the combination of powerful interest groups and free-market ideology."

Spectacularly missing in the U.S. health care reform debate is the political will to overcome the powerful health insurance and pharmaceutical lobbies, who continue to write health care policy, as they did Medicare prescription drug reform, with billions of dollars of subsidies and inflated profits to enhance their bottom lines. AHIP's (representative of commercial insurance) proposed solution for health care reform calls for private insurances to insure the healthy, with taxpayers subsidizing private premiums for the low-income; they also propose that taxpayers subsidize care of the sick -- another large cost-shift to taxpayers. Thus, commercial insurance garners all the profits, and taxpayers pick up the bulk of the costs. The tremendous financial influence of these interest groups over legislators and candidates is further testament to the need for public financing of campaigns.