Monday, February 27, 2017

Make It Work

Those of us who work in the public sector are used to variations on “we don’t care what your constraints and drivers are -- your allocation is flat.  Make it work.”  It’s frustrating, but we’ve been there enough times to know the drill.

But health insurance costs go up ten percent per year, year after year.

I’m thinking fair is fair.  If we have to get by on flat allocations, so should Blue Cross.  

If we could get that line item to stop crowding out everything else, managing our own budgets would be infinitely easier.  It wouldn’t solve everything, but it would go a long way.

And it would establish a badly needed principle of shared sacrifice.  

So, here’s my proposal.  Collectively -- and yes, I know the whole “collective action problem,” but bear with me -- we simply declare that whatever we spent on health insurance this year is what we will spend next year.  After that, we’ll agree only to increases in line with general inflation.  

When the insurers complain, we’ll tell them the same thing we hear every year.  Make it work.

When one sector has austerity imposed upon it and another is licensed to grow unchecked forever, you get some pretty serious distortions.  We need to establish some sort of balance.

Right now -- and I swear I am not making this up -- the government is barred by law from price haggling with drug companies.  That means, in effect, that the drug companies charge whatever they want.  And they do.  And that money comes out of our flat budget lines.

Fiscal discipline can’t be unilateral.  It has to be shared.

Until the 800 pound gorilla of our institutional budgets is brought to heel, we’re going to struggle.  We can’t keep pretending that isn’t true.  

President Trump is a businessman who prides himself on dealmaking.  And he’s discovering that the “replace” part of “repeal and replace” is untenable when costs keep increasing heedlessly.  He’s certainly not allergic to the grand gesture.  Here’s a chance to make an actual difference.

Tell the health insurers the same thing we get told every single year.  Here’s your allocation; make it work.