The Reality-Based Community

Well, it's sure new to me.
I like the idea because it is daring and unconventional and counter-intuitive.
I dislike it because it seems to preserve the perverse notion that health care is for people who "deserve" it - like veterans - as opposed to some mythical group of people that does not deserve health care. (AIDS activists have always been alert to the insidious nature of the "innocent victim" meme.) And because it reinforces the specter of state-run medicine.
On the other hand, the memes of choice and paying as you go - which you create by brilliantly tying this to marginal cost - are very powerful.
Nice job, Mark.

I would think you'd have a problem with adverse selection, unless everyone without healthcare coverage switched to that system.

Big issue is that the VA system is capacity constrained. It currently has rules that prioritize users for services through VA providers among those nominally eligible.

Nor is it a system that can be rapidly expanded. While one might buy or lease existing beds and clinic space, getting the VA electronic medical records system in place would be a challenge. Even more critical, getting physicians and others oriented toward and practicing like VA providers and using the VA tools would take time.

I like the idea, but I have to agree that it does sound like there would be a problem with adverse selection. Nor can I see how to get around it--this is a problem with any non-mandatory insurance program.

So, you could decide you don't care (society is going to provide medical care to these people, so you might as well do it efficiently.), or you could do what private insurers do and limit eligiblity in some way.

The capacity problem doesn't that serious--you don't have to let everyone join at once, so as you ramped up capacity you could increase the pool or possible insured. As Jack Needleman suggested, there isn't enough capacity now, so they should be working on growing the system anyway. In the meantime you could allow enrollment at centers that aren't at capacity, of which there must be some somewhere.

Rather than trying to slide national universal health care into the VA system, which -- thanks to our current wars, and an adminsitration that cares more about those wars than the service members who fight them -- isn't sufficiently resourced for its current mission, why not be straight up about it, acknowledge that the US needs a national health care system that gives everybody access to care, and get to work on it.

Filling up already crowded rooms at VA regional clinics and medical centers makes the challenge of health care for veterans worse, not better.

Certainly, we can use the VA health care system as a model for how a national health care system could work. Let's capture those lessons without straining the VA system to the breaking point.

Ultimately, the story of Ken Kizer suggests why government health care may always run into opposition. This man--the hero of the Washington Monthly story--was chased out of government by Democratic Senator John Kerry.

Why join a system when John Kerry can get the system's CEO fired?

Make the buy-in price be the marginal cost plus two percent, with the two percent helping to fund vet benefits. Market it as a "Support our Troops, Support Your Health" program. Vets could hardly oppose this, and it would be tougher for Repubs to sink it.

Adverse selection would be a problem - you'd have to guess who would be the adversely selected, and make them the basis of your marginal cost.

Marginal cost would work fine, IF you underwrote--so it's the marginal cost of the person added, NOT the marginal cost of the average person. Underwriting--the antidote to adverse selection.

If we're going to add lots of people to the VA system, shouldn't they pay average costs, not marginal costs? After all, marginal costs are realistic only for marginal changes. Adding lots of people will require additional fixed assets.

Or, was the goal to create yet another subsidized healthcare system? That's a curious goal given the specific praise for the VA system.