BY BILL STEIGERWALD
Syndicated Columnist

Saying that America’s semi-private, semi-public health care system needs a complete overhaul, President Obama last week challenged Congress to send him a health care reform bill he can sign by the end of the year. The president said that a new health care system would have to meet three strict criteria, however: it’d have to lower costs, allow patients to choose their own doctors and provide affordable, quality care to everyone.

To get an expert’s reaction to the president’s ambitious hopes, on Wednesday, May 13, I called economist Regina Herzlinger of Harvard Business School. Herzlinger, dubbed the “Godmother” of consumer-driven health care by Money magazine, is widely regarded in Washington and elsewhere for her innovative research in health care and for writing books like her latest, “Who Killed Health Care?” (2007).

Q: Do you think Congress will be able to meet president Obama’s three criteria — lower costs, doctor choice and affordable quality health care available for everybody?

A: I don’t see how that’s going to happen. I don’t know of any remedy that we have had in the U.S. — and we’ve tried a lot — that has controlled health care costs and produced quality care. The only thing that has controlled cost is managed care and it did it by rationing care. And the American people said, “‘Hey, wait a second. That’s my money and you’re not giving me access to health care.” This is not a solution the American people will accept.

I wish Obama well. I hope he will succeed. But let me talk about the Democrats in general…. The Democrats had hoped that they could get Medicare as an option on this market that they are going to create. Their hope was — because Medicare is so low-priced relative to private insurance — that people would sign up for Medicare. One very good analysis predicted that 112 million people would move into Medicare. And then they would have a de facto single-payer system.

However, there was a little inconvenient truth about Medicare. Due to the eccentricities of government accounting, Medicare owes you and me and people like us who have been paying into Medicare all our working lives about $34 trillion.

That is about three times the GDP of the United States. Medicare does not have $34 trillion. So if we enlarge Medicare — it’s about 40 million now — by another 112 million people and the Congress is as parsimonious in pricing it correctly — the reason we have this liability is that Medicare is mispriced and is a bargain — the United States would just die.

I’ve spent a lot of time in D.C. since October explaining this $34 trillion and what it means. I believe — not because of my efforts but because of my and similar efforts — that Medicare will not be offered. That’s dead. So what is he going to do? I’ll be damned if I know. The only thing that has worked is the Swiss health care system, and I hope he goes to it.

Q: Speaking of the Swiss health system, why can’t health insurance be like car insurance — where it’s mandated that you have it but then the government gets out of the way and the marketplace provides a wide array of plans?

A: Be darned if I know. I believe that Medicare is dead. I may be wrong, but I’m tenured, so I can afford to be wrong. I believe that Medicare — which is a code word for a single-payer approach to controlling health care cost — is not going to happen.

Q: So what will?

A: I think we need to create a consumer market. An easy way to do that is right now harbored by my health insurance only because they can do it pretax and I can’t. I would like that tax exemption passed on to me so that they give me back the $15,000 they now take out of what would otherwise be my salary to buy a health insurance plan that is not remotely like what I would want. If they give it to me — I can use it tax-free, too. I would not buy $15,000 worth of health insurance. There is no way in hell that I am going to spend that much money. And people like me are going to put a lot of pressure on this system. That’s the way to do it.

Q: Is Switzerland a country Congress should look to as a role model?

A: Yeah. They have universal coverage. They don’t have rationing, unlike the Brits in the UK. You can get transplants. You can get dialyzed. People who are sick get good health care in Switzerland and they spend 40 percent less as a percentage of GDP than we do. The reason is, the Swiss buy their own health insurance. Actually, Switzerland has no Medicare and has no Medicaid.

Q: Individual Swiss citizens buy health insurance the way we buy car insurance?

A: Absolutely. In Switzerland, instead of being relegated to a really degrading program like Medicare — a lot of doctors won’t see M patients because they get paid terribly for those Medicare patients — a poor person gets in effect a voucher equal to the average expenditures of the average Swiss. Then she goes and she buys health insurance like everybody else. I think that is a much better system.

Q: What are the chances that Congress will make things better and not worse?

A: I believe they are going to go for the Swiss system, which would be better. The recession has made so many people nervous about their health insurance that it seems to me, rightly or wrongly, that they really want universal coverage. The only way to do it is the automobile insurance-Swiss model.

The Swiss model is a real model. It’s not some BS, theoretical “We’ll promote health! We’ll have IT, blah, blah, blah.” This country has been doing it since 1996. It’s a very stable and not terribly wacko country. It works there. It works in very precise ways. Everybody has universal coverage. The care is great; 40 percent less cost. So I think that’s where we are going to go. It’s just going to take a while for us to get there.

Bill Steigerwald is a former columnist and associate editor at the Pittsburgh Tribune-Review who’s also worked at the Pittsburgh Post-Gazette and the Los Angeles Times. E-mail Bill at bsteige@verizon.net