The Financial Crisis and Healthcare

The financial markets are gyrating. The world economy is teetering. The U.S. government is making a $700 billion or more bailout to avert a worldwide disaster. No surprise, health care has become a side show. Or has it? Not only does this upheaval actually make health-care reform more pressing, it makes comprehensive reform—change in the way health care is paid for and how care is organized and delivered— more realistic and feasible.
"Socialism" has come to Wall Street. For more than 60 years, Republicans have criticized as "socialized medicine" any reform proposal that gave government a central role in funding health services or in regulating providers.
The charge has always been false. True socialism requires governmental ownership of the means of production. No health-care reform proposal, even the most ardent single-payer plans, ever suggested the government should employ doctors, or own hospitals, pharmacies, home health-care agencies or drug companies. Moreover, in the current system, the government already pays for more than 40 percent of the health-care bill. With a Republican administration leading the takeover of Freddie Mac, Fannie Mae, American International Group Inc., and the purchase of housing securities, it hardly seems credible to criticize health-reform plans as socialized anything.

The phenomenal failure of Wall Street dramatically changes the appetite of the country for regulation and for shoring up the safety net. With trillions of dollars evaporating in this crisis, millions of middle-class Americans face the prospect of losing their homes and jobs, and witnessing a dramatic contraction of their retirement savings. In response, the public will desperately want financial security, and health care is a critical element of that.

This financial crisis also means Americans may be more willing to forgo gold-plated comprehensive insurance that covers everything with few restrictions. Under the threat of losing everything, Americans may feel content with the guarantee of a decent plan that covers cost-effective treatments with some restrictions on choice and services to save money. This should enhance the chances for a bipartisan deal on health care.