I Stand Corrected

Posted: October 1st, 2009 | Author: | Filed under: Economics, Politics, Video | Tags: , | No Comments »

Three weeks ago, I thought we were moving towards a coherent piece of health care legislation. I was wrong. Let me review this one more time:

A. If your primary goal is achieving universal insurance coverage, you can: 1. Have a single payer system where the government provides insurance; 2. Have an employer mandate with a super-strong public option where the government might as well provide insurance; or 3. Have a universal individual mandate with aggressive regulatory reform and generous subsidies.

Of these three, the first, single-payer, hasn’t ever been on the table. The third—otherwise known as the Wyden-Bennett bill—would be the easiest on the public fist, as well as the most conducive to medical innovation. On those grounds, it’s my favorite.

B. If your primary goal is reducing the cost of medical treatments, you can: 1. Have a single-payer system where the government centralizes and rations care; 2. Have a super-strong public option where the government might as well provide it; 3. Have aggressive reform of our medical profession and training, with incentives for people who set up small community clinics, say, or better tuition grants for folks who go to med and nursing schools.

Of these two, the first has never been on the table. The second would undermine medical innovation (see point a, above). The third, which I support, isn’t something that can be legislated, but has to be pursued long term.

If this is still confusing, watch the awesome animation below.

Eliminating the single-payer non-options, there are only two things Congress can pass that will achieve EITHER of the stated goals of reform: a strong public option based plan or a full-on, aggressive, overhaul of employer-based insurance. While I prefer the second, because it’s better fiscal policy, better for innovation, and leaves room for overhauling medical education and provision at a local level, I’d RATHER have the first option, in its entirety, than some bastardized hybrid of the two.

Yes, that’s right. I’d rather get NONE of the provisions in the bill I favor, than get only some of them. Why? There are some areas of policy where each line in a bill is actually dependent on each other piece to work. Imagine, for example, a defense bill that appropriates funds for a battle, where the general’s battle plan requires attacking a city from north and south simultaneously. Passing a bill that authorizes only half the attack would probably lead to failure, and more soldiers dying than if you didn’t authorize the attack at all. This is in contrast to something like infrastructure spending, where a bill that appropriates funds for a bridge in San Francisco and a tunnel in New York can be tweaked to nix the tunnel without impairing our ability to build the bridge. Health care economics is closer to defense economics than infrastructure spending. In this area, compromises don’t work, because they don’t result in internally coherent economic systems.

Obama’s vagueness during the summer’s town halls, linked to his wish for bipartisan compromise, was bad politics because it ceded control of the debate to his opponents. But it was also bad policy, reflecting his unwillingness to commit to either policy system. We’re now likely to get reform passed, and it will be a hybrid of market- and public- mechanisms. It’ll be a bill that emanates from Obama’s political vision (of bipartisanship) rather than from a policy vision (which I’m not sure, on economic issues at least, he has). And the result is that it wouldn’t achieve his, or my, policy goals—universal affordable coverage—at all.

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