With Health Care, First Fix Terms of Engagement

That doesn't mean there aren't ill-advised government policies that need fixing, as Bush suggests, like the malpractice-tort system or the tax-free treatment of employer-provided health insurance.

Nor does it mean that we shouldn't make health costs more transparent or find market mechanisms to make patients and doctors more cost-conscious in deciding which treatment to choose or how much health care to consume.

Health savings accounts combined with higher-deductible catastrophic insurance -- the centerpiece of the Bush consumer-driven health care push -- are already gaining traction in the marketplace and show some real promise.

And yes, preempt those crazy state laws mandating coverage of chiropractors, podiatrists and massage therapists.

At the same time, the president must acknowledge that there can be no credible reform without extending health insurance for every American. In the context of our employer-based system, every employer should be required to pay half the cost of basic health insurance for every employee, with the government pitching in to help the unemployed and working poor. We already do that for unemployment insurance, worker's compensation and Social Security. Now its time for the world's richest country to extend the approach to health care.

Both economic theory and recent experience tell us that "universality" is an economic necessity. In a competitive marketplace, the sick and poor tend to be priced out of the system while an increasing number of employers and healthy workers try to free-ride by getting others to pay for their emergency-room care.

Just as important, universality is a political necessity. Leave it out and you can be sure that Democrats will mau-mau the issue and refuse to participate in the discussion. On the other hand, include it as a central purpose of health care reform and Democrats will have no choice but to join in.

Steven Pearlstein will host a web discussion today at 11 a.m. at washingtonpost.com. He can be reached atpearlsteins@washpost.com.