RIGHT OF CENTER: COMPETITION KEY TO ANY HEALTH REFORM

Last week in this space, while conceding the need for health-care reform in this country, I discussed some of the reasons I'm opposed to the federal government taking over health care, which represents one-seventh of the economy. Of course, it always is easier to criticize government initiatives than to furnish alternatives. In this column, I'd like to discuss two alternatives to comprehensive, national health care.

This first, which I'll call consumer choice, was drafted by the Heritage Foundation and is modelled after the Federal Employees Health Benefits Program, which already covers nearly 10 million federal employees and retirees, including all members of Congress.

Under consumer choice, workers -- rather than a national health board -- decide for themselves which services they want and those they don't. The consumer selects benefits packages that meet their needs rather than a one-size-fits-all package selected by federal bureaucrats.

Consumer choice, which first was proposed by Heritage in 1989, avoids the creation of a massive new bureaucracy required by the Clinton approach to national health care. Clinton's plan, and similar plans being debated in Congress, imposes price controls to contain health-care costs, which will lead to government rationing of health care. Consumer choice, on the other hand, relies on competition between health-plan providers to contain costs and places no limits on the amount of health care available to Americans.

In order to pay for the plan, individuals would receive tax credits to offset the cost of health insurance and medical expenses, with more generous tax credits and vouchers going to the unemployed and working poor. The key is that consumers are free to spend their own money on health coverage of their choice, shopping for the best health-care bargain and introducing competition among health-care providers -- the most effective way to bring down costs.

The second health-care reform option has garnered less national attention. I'll call this reform the health-bank approach.

Many of the advantages of health banks, or medical savings accounts, mirror those of consumer choice. The proposal would work something like this:

-- A portion of an employee's health insurance premium is earmarked for purchasing low-cost catastrophic health insurance with a high deductible.

-- The remainder of the premium goes into a health bank or medical savings account.

-- The worker can draw from his account for the care he wants.

-- At the end of the year, what is left in the health bank can either be refunded to the employee or rolled over into the next year's account.

The primary advantage of health banks is that individuals, knowing they have a limited cache of funds for health care, will make cost-conscious decisions about the care they need, which will foster competition among providers. Also, consumers have an incentive -- a refund of their unspent premium or the accumulation of rollover funds -- to keep costs down in a healthy year rather than make frivolous visits to the doctor to meet their insurance deductible.

This is merely a thumbnail sketch of both of these proposals, which ought to be fleshed out in Congress. Health care has become an important issue, and consumers ought to be afforded the opportunity to have legitimate options debated fully before a decision is made that could make us, in retrospect, yearn for our present health-care system and its problems.

Jay Eastlick is the news editor at the Southeast Missourian.