‘Mandates are your friend’ economist tells Chamber group
BY JOHN SCHROYER
THE COLORADO STATESMAN
At the Denver Metro Chamber of Commerce’s fifth annual health care policy breakfast Friday morning, economist Len Nichols received a rousing ovation even after informing a room full of business leaders that they should not be afraid of government mandates.
“I submit to you that a mandate can be your friend,” Nichols argued in his hour-long presentation. Nichols, the director of the Health Policy Program at the New America Foundation and a former Clinton appointee, told his audience that what is needed is heightened cooperation between private companies, health insurance providers, the government, and consumers.
“I tell you, it’s not a question of charity. It’s a question of stewardship. We’re spending money stupidly,” Nichols said, and added that it would cost less to provide basic health insurance than it currently does to provide care for unintended illnesses and related costs.
He argued there was a balance to be struck between the free market and government regulation, and that message — perhaps surprisingly — resonated within the crowd that morning.
Bill Lindsay, spokesman for Colorado’s Blue Ribbon Commission for Health Care Reform, called Nichols’ speech “powerful” and said it definitely struck a chord with his colleagues. “There were quite a few of the commissioners there in attendance, and virtually all of them had the same reaction: that it was a good message,” Lindsay said.
He added that Nichols’ speech is “clearly going to be taken to heart” by the commission, which will consider 29 different proposals this year before offering final recommendations on Nov. 30. One of three appointees to the commission made by state Senate Minority Leader Andy McElhany, R-Colorado Springs, Lindsay is the epitome of a businessman who is interested in a solution to the health care dilemma. He’s the president of the Benefits Group of Lockton Companies of Colorado, Inc., an insurance brokerage firm that specializes in advising small businesses on how to provide benefits. The fact that he was appointed by McElhany, a wellknown fiscal conservative, indicates that his priorities are business-oriented.
As Lindsay noted, Nichols didn’t specify exactly what he meant by mandates. He wasn’t necessarily advocating mandated benefits, which “are one of the things the business community has been concerned with for years,” Lindsay said.
Rather, Nichols used the term broadly, so that it could be applied as it has in Massachusetts, where a 2006 law signed by former Gov. Mitt Romney, a Republican, requires all residents to have basic health care coverage by July 1 of this year. Nichols also pointed out that uninsured people are often “the healthiest on the planet.” “What’s kind of not working is that they have no way to signal to insurers just how cheap they are. So the price they see are the prices insurers set to protect themselves against adverse selection. This is a hint. This is why we need mandates,” he said.
Said Lindsay, “It isn’t a true mandate on business. What it is in effect creating is a bottom-up pressure to encourage business to offer health benefits.”
A true mandate, he said, would evince a “visceral reaction from the business community.” “Doing it this way, it’s a very clever and effective way to get to the same point,” Lindsay said.
Nichols added that the main reason health care reform is being pushed through is not Democrats and bleeding hearts, but small business owners.
“State reforms passed not because there was a sudden paroxysm of leftist impulses all across the country. State reforms passed because small
business came to state legislatures and said, ‘Help! I can’t do this anymore. It’s killing me,’” Nichols said.
He pointed out that with the rising cost of health care, the cost on small business is simultaneously skyrocketing, to the point where many businesses simply don’t know what to do.
“We can no longer expect business to bear the burden they’ve been bearing. We’ve got to get them out of this somehow,” Nichols said. A self-described “preacher who was kidnapped…
and forced to go to economics graduate school,” Nichols also laced his speech with Biblical references. In the book of Leviticus, he said, there is a particular passage that requires farmers to leave a portion of their crop in the field after harvesting for “the widow, the orphan, and the stranger.”
“Now there’s a concept. I submit to you because they believed, fundamentally, that every human being was made in the image of God, and every human being had a right to participate in
the life of the community,” Nichols preached.
“It is about life. It is about the life of the community, preserving it and nurturing it,” he continued. “To deny health insurance because of cost is very similar, if not identical, to denying food to
the widow, the orphan, and the stranger.”
The balance comes in, he said, when you realize that the farmer is not required by the Bible to “invite him into his home and cook for them.” “That is to say, it’s okay to put an obligation on the individual to go get it, i.e. require them to take care of their health, require them to buy health insurance, but make it possible for them,” Nichols said.
He noted that roughly 18,000 to 20,000 people in the United States die annually because of lack of access to health care, and also that health care is “rationed by income.” Part of the growing problem is the rising cost of health insurance, which has jumped to 19 percent of the median family income in 2005 from 7 percent in 1987. One part of the problem that should present a fairly simple fix, Nichols said, are cases where costs skyrocket because preventive care is not obtained.
He told a story about a young boy who died from an infection that spread from a tooth ache to his brain. In the end, he said, $200,000 was spent in vain trying to save the boy, when $80 could have been spent earlier to fix the tooth ache.
Tom Clark, the executive vice president of the Denver Metro Chamber of Commerce’s Economic Development Corporation, said he was “pretty impressed” by Nichols’ platform of balance between business priorities and social conscience. “That’s still the Rubik’s cube for all of us,” Clark said of how that balance is to be struck. “Obviously the system is not working.”
He did warn, though, that not everyone was going to be accepting of Nichols’ thesis. “I’m sure there are plenty of people in the audience who had a hundred objections to what he said. There could be a (conservative columnist) Mike Rosen response, which is, if you want better health insurance, get a better job,” Clark said. “Those to me are more the nits and nats. I think the message was much more powerful than that.”
Nichols also, however, had a political message for Colorado. The nation, he said, is watching the state because of the Blue Ribbon Commission, and in addition, health care is going to be “the domestic issue in 2008.” As a director of a think tank, Nichols has already consulted with six presidential candidates on health care issues. Three of them have been Republicans (but none were Romney), and two of those asked how they could make universal coverage consistent with Republican principles.
“They get it,” Nichols said. “You can see it in every poll… People are really worried about being able to pay for this. And it is systemic. It is not
going away.”
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