Opinion

Let States Have Their Own Healthcare Systems

REUTERS/Kevin Lamarque/File Photo

Deane Waldman Director, Center for Health Care

Washington cannot seem to make a good decision regarding healthcare. Yet the answer is staring them in the face: just say yes…to the states.

California wants single payer. The California Senate Health Committee just passed a resolution (5-2) to create a statewide, single payer system that would “dramatically expand the government’s presence in medical care.”

Texas wants the government to get out of healthcare. They want a free market-based system where Texans are in control.

In terms of population and resources, both California and Texas are comparable to Canada. Each could support its own healthcare system. With a GDP of $1.5 trillion, Canada has a single payer system for its 32 million inhabitants. California has 38 million people and a SDP (state domestic product) of $2.5 trillion. Texas’ SDP is almost identical to Canada ($1.5 trillion) with a smaller population, 27 million.

According to a bill introduced in February 2017 by State Senator Richard Lara (D-Bell Gardens), California’s new system would “cover all medical expenses for every resident regardless of income or immigration status, including inpatient, outpatient, emergency services, dental vision, mental health and nursing home care.” There would be no copays, deductibles, or preauthorization process. Private insurance companies would be prohibited from competing with the government.

Detractors worry there won’t be enough money, facilities, or care givers—that it won’t work. Yet, is that Washington’s concern? Shouldn’t the people of the Golden State be allowed to rise or fall based on their own choices?

Texas wants a free market. They would construct a healthcare system that reconnects buyer with seller, reestablishes personal responsibility, eliminates perverse incentives, and returns insurance to its original function. Texas believes that is the best way to get care to the most Texans in a timely manner, and at a price they can afford.

Opponents fear that medically vulnerable Texans will be lost in the shuffle; that many will be incapable of using the free market to shop for healthcare goods and services; and that corporate profits could subvert the health of poor people.  Good or bad, shouldn’t those decisions be made by Texas? By what authority does Washington tell Texas what to do for the welfare of its people?

California thinks government control of healthcare spending will be most dollar efficient (the largest number of healthcare dollars expended that produce health care.) Texas believes that the free market would do a better job.

In a 1932 Supreme Court case titled New State Ice Co. v. Liebmann, Justice Louis Brandeis gave us sage advice that a “state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Wouldn’t it be smart to let the two most populous states in the union take their different approaches and see which one works better?

Money is always a sticking point in healthcare, especially the relationship of state spending to federal mandates, and how much money the states contribute to Washington versus how much money is returned. For decades, Washington has lived well beyond its means, spending more money than it took in, and then adding the difference to the national debt. If Congress stopped the unsustainable mandated spending and simply gave each state a fixed sum to use for healthcare, both the states and the nation would be on a path to fiscal sanity.

Recent GOP plans for healthcare are touting a façade of greater state-level flexibility. But that “flexibility” is tightly constrained within a rigid structure and a set of rules established by Washington. A small amount of wiggle room within a federal straightjacket is not flexibility.

States should be able to make all decisions about healthcare within their boundaries: money flow, insurance, market forces (if any), size of bureaucracy, licensure, personnel, physical facilities, and regulatory structure (how much). Across borders, they should be allowed to make compacts with other states.

Instead of imposing a one-size-fits-all solution, the 114th Congress could become our national hero. Simply listen to the people and let them have the healthcare they want.

Thirty-eight million Californians want one thing. Twenty-seven million Texans want something else. Four million Oregonians want their interpretation of universal health care. Let the people of each state decide their own destinies. Washington: Just Say Yes.

Deane Waldman, MD MBA, is Emeritus Professor of Pediatrics, Pathology and Decision Science, and Director of the Center for Health Care Policy at the Texas Public Policy Foundation. He is the author of The Cancer in the American Healthcare System and can be reached at dwaldman@texaspolicy.com.