Out of the Office!

Jake Weisberg has a good piece in Slate on the way our health care system reflects the best and worst of our national character--and how to fix it without pretending we're going to become Brits or Finns. One of his central points is that we need to get the whole business out of the workplace. People don't spend their whole career at one place anymore. He might also have mentioned the many disadvantages of workplace-based coverage, including that it discourages entrepreneurship. Besides, the arrangement is a historical accident. It's got nothing but inertia going for it, as I made clear in this New York Times column from 2003. Here's the heart of it:

Why should we hate the employer-financed system? Let us count the ways:

It makes it difficult or sometimes even impossible for people to change jobs, not only damping economic efficiency but reducing the competition for labor and, therefore, reducing wages. Without alternative health coverage, there is "strong evidence for job lock," wrote two economists, Jonathan Gruber and Brigitte C. Madrian, in a National Bureau of Economic Research study released this year.

It suppresses the creation of new businesses because, for many potential entrepreneurs, quitting a job means forgoing health insurance, a risk too big to take.

It handicaps traditional industries like autos and steel, whose medical burden for retirees is staggering. The estimated lifetime expense for today's steel retirees alone is $14 billion. In the auto industry, General Motors alone provides coverage to nearly one-half of 1 percent of the American people; One analyst, Gary Lapidus of Goldman Sachs , calls Detroit's Big Three "H.M.O.'s with wheels."

It unfairly excludes the unemployed, the self-employed and low-skilled workers. And it can shortchange single people, whose employers effectively pay higher wages to workers with families when providing dependent coverage.

On top of everything else, our employer-based system seriously obscures who is paying what, making cost controls difficult.