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God Only Knows

There's the joke about the health policy wonk who dies and goes to heaven for his entrance interview with God. He gets to ask God one question, and it's this: "Do you think the U.S. will ever have universal health insurance coverage?"

To which an exasperated God replies, "Maybe one day, but not in my lifetime."

God only knows, but universal coverage may come sooner than He thinks. The reason: Genetics and the perils of asymmetric information.

Imagine a future when it becomes possible to use genetic screening to precisely test for all manner of diseases and medical conditions. Under a private health insurance system, at least three scenarios might unfold:

1. Health Plan Asymmetry. Consumers have access to genetic screening information, but health insurers don't. Consumers may choose to use the screens to determine how much, if any, health insurance they ought to purchase in the face of their probability profile for certain diseases and conditions. High risk candidates may be motivated to buy lots of insurance at low rates, thus skewing the insurance pool and creating a potential financial nightmare for insurance companies. Health plans respond by raising rates across the board to protect themselves.
   
   
2. Health Plan Symmetry. Health plans - and employers for that matter - have access to member genetic screening information, as do consumers. Plans could conceivably use genetic testing to determine insurability or insurance ratings; employers could subject potential hires to "suitability for employment" tests. More individuals are found to be high risk and can't get coverage or even good jobs. The ranks of the uninsured increase, as does the cost of public programs.
   
   
3. Legislative Ban. Genetic testing and screening are restricted for both ethical and economic reasons. Neither plans nor consumers get access to genetic information except under rigorously defined and controlled conditions. The economic and scientific progress of the biotech revolution comes to a screeching halt, jeopardized by the straitjacket of prohibitive regulations and "controlled" markets. Congress feels the heat from Big Business and reverses the restrictions on genetic screening, resuming some variation of the above scenarios.

These scenarios are overdrawn, but they illustrate the "damned if you do, damned if you don't" nature of the U.S. health care reform debate, which pits consumer against payer against provider against regulator in a circle of misplaced self-interest, misaligned incentives and misguided practices. Promises of the genetic revolution notwithstanding, they pale against the Rube Goldberg complexity of figuring out how to apply the benefits of science for the greater health of the greater good in a system that grew out of a set of historical antecedents in the mid-twentieth century that no longer apply at the beginning of the twenty-first.

One solution is to consider the benefits of universal coverage. More specifically, we ought to revisit the old idea of community rating: the individual who purchases insurance becomes part of a large community and is insured on the basis of the large group rate.

Individual differences would be averaged over millions of enrollees. There would be one national pool, and everyone would be part of it at a cost based on national risk averages. Demographic, geographic, genetic and other types of differences would not be factored into individual policies, but would reflect the risk of the national pool.

This need not be a "socialistic," government-controlled solution to health care access and affordability. Government's role would be that of basic rule setting, verification and accountability. Multiple private plans and providers could provide services in any number of innovative configurations, but all would be required to use the same actuarial data for pricing policies. Tax credits, vouchers and other "market" solutions could be used as incentives for greater individual involvement and responsibility for health care. People could "trade up" for better benefits and services in a thriving private health care market that would sit on top of the universal pool and basic benefit package.

Are there problems with community rating and universal health coverage? You bet. But they pale in comparison to the problems of the current system, which will be compounded in spades by the inevitability of genetic testing and its reverberation through a private health insurance market that is based to a large degree on the principles of exclusion and risk aversion. On the whole, universal health coverage and a national rating pool are a better bet all the way around.

But don't hold your breath waiting for a change. God apparently isn't. Maybe He knows something the health care idealists don't.