There is a big health care vote in the House today. From what I hear, the way the procedural stuff is set up, passage in the House pretty much paves the way for making the health care reform package law. What really caught my attention today was some ranting about how the Constitution will die today – this from people who did not bat an eye at warrantless wiretaps and suspension of habeas corpus for individuals designated by the executive branch as “enemy combatants.” To repeat: Tapping phones and suspending habeas corpus? No problem. Health care for the poor and uninsured? Constitutional crisis!
So, on to the substance. Do I think this bill is well designed? No. Not really. But I’m convinced that a well designed system can’t pass Congress. And, given the political capital spent on this bill, there will not be another effort made for at least another 15-20 years. So, the choices are the status quo or this. The status quo is simply unsustainable. We are spending 16% of our considerable GDP on health care already. We spend twice as much per person on health care as other countries. We already pay for something like 45% of those costs from public funds. And costs are increasing. (And no, despite what you may have heard, medical malpractice lawsuits aren’t the prime or even substantial cause of these increases.) Despite spending half as much, those other countries have health care results that are comparable or, in some cases, superior to the U.S.
To date, nobody has been able to direct my attention to an example of a successful market-based system of health care; leading me to be skeptical of whether such a thing can exist. One country that sometimes comes up in this context is Singapore. However, while its system makes use of private insurance, it also ensures affordability largely through compulsory savings and price controls.
Singapore’s system uses a combination of compulsory savings from payroll deductions (funded by both employers and workers) a nationalized catastrophic health insurance plan, and government subsidies, as well as “actively regulating the supply and prices of healthcare services in the country” to keep costs in check[.]
Markets are very good at allocating resources. However, to function properly, it seems to me that buyers need to have good information and the ability to walk away from a transaction. That’s a problem in health care negotiations. Health care decisions involve analysis of medical information that’s generally beyond the understanding of most people. And, even if you can rely on your doctor or otherwise master the medical end of the decision making process, medical pricing is often ridiculously opaque. Try calling up half a dozen hospitals and trying to get the actual price of a hip replacement. Even if they’re willing to tell you, there are likely to be an array of prices depending on who’s asking. And those will be qualified prices because any number of contingencies can affect the price, even in the middle of the surgery. Then you have the problem of getting an insurer to be clear, up front, about the terms of the insuring contract and then honoring those terms after the fact. The insurer operates from a position of strength, collecting premiums for years when there are no significant health issues, then being able to withhold a determination of whether it’s going to pay for a procedure until after the procedure is complete. Finally, any negotiating options you have in the ordinary situation pretty much go out the window once you’re in an emergency situation. It’s like negotiating with a gun to your head.
Politically, the pundits like to tell Democrats they are doomed if they vote for this thing. That may or may not be. I think it’s a certainty that they’re doomed if they vote against this bill. A political wind pretty much always blows against the party in power. It’s just easier to criticize than it is to govern. But, pretty much regardless of the substance, that wind will turn into a maelstrom if they are unable to pass legislation during tough times. During good times, the electorate will pretty much ignore ineffectual dithering as leaving well enough alone. However, during bad times, “strong and wrong” seems more comforting to people than weak and either right or wrong. Of course, “strong and right” is best of all. When asked about particular policies in the legislation, folks are generally on board. When asked about the bill or the legislative process as an abstract entity, that’s when public opinion goes negative. Once the law is passed, a lot of the negativity about procedure will probably evaporate pretty quickly. When the armageddon predicted by the bill’s detractors never materializes, they will be discredited and a lot of that negativity will evaporate as well. So, politically, the best option for Democrats is going to be voting for this bill. If the bill fails, there will never be anything concrete for the electorate to judge. Instead, the health care bill will always be the inchoate monstrosity built up by its detractors. Anyone associated with that monstrosity will be judged harshly – even if a particular lawmaker only dithered about supporting the monster and even if the monster never existed in reality.
Now, it’s all over except the shouting. And the voting.