Engineered to Fail

By lex, on March 28th, 2010

The chattering classes in the US want to have it both ways over the president’s health care victory. It is to be at once  “the most sweeping reform since the Great Society” era of the 1960s and nothing to get all het up about. You racist.

That 53% of the population inclined to wonder whether 1/6 of the market economy ought to have come under direct federal control for the first time ever ought not peek behind the curtain at the parliamentary procedures used to shove it across the finish line. You really don’t want to watch sausage get made, if at some future point you might want to eat sausage.

And anyway, it’s none of your business.

The president was fond of saying that “doing nothing” about the 60-year old health care crisis was not an option, that cost growth was unsustainable. And while conceding that some in the health insurance business industry acted unconscionably when terminating benefits for those with emergent medical conditions, the vast majority of insurance malfeasance went the other way: People declined to purchase insurance until they had a palpable need. There isn’t an insurance business worth of the name that can make money offering coverage to people whose houses are already on fire.

And between “doing nothing” and “doing the right thing” there is often a world of difference. Not all motion is progress. Look overseas to Britain, where editors of the Economist know a thing or two about government health care takeovers, to learn about “cost control”:

The short answer is that the reforms will expand coverage dramatically, but at a heavy cost to the taxpayer. They will also do far too little to rein in the underlying drivers of America’s roaring health inflation. Analysis by RAND, an independent think-tank, suggests that the reforms will actually increase America’s overall health spending—public plus private—by about 2% by 2020, in comparison with a scenario of no reform (see chart). And that rate of spending was already unsustainable at a time when the baby-boomers are starting to retire in large numbers…

The Congressional Budget Office (CBO), a non-partisan agency, estimates that the new health reforms will cost the federal government some $940 billion over the next decade. Of that, roughly $400 billion will be spent by 2020 on the subsidies and about $500 billion on increased spending on Medicaid.

But that underestimates the full cost of this new reform. Elizabeth McGlynn of RAND points out that the huge numbers of newly insured—who now typically skip medical care or simply turn up, in a crisis, in emergency rooms—will soon consume a lot of routine medical services. She thinks this spending will expand the country’s health outlays even more than the direct cost to the federal exchequer.

And wasn’t that the point?

(This) points to the only certain thing about Obamacare: that this is just another episode in the long saga of health reform. Indeed, by adding tens of millions of people to an unreformed and unsustainably expensive health system, this reform makes it all the more urgent to tackle the question of cost.

On that, at least, left and right seem to agree. Paul Krugman, an economics professor at Princeton and a liberal booster of reform, wrote on the eve of the votes: “There is, as always, a tunnel at the end of the tunnel: we’ll spend years if not decades fixing this thing.” Robert Moffit of the Heritage Foundation, a conservative think-tank opposed to the effort, agrees, albeit in darker terms: “This marks the beginning of the next phase of this hundred years war.”

Nancy Pelosi was forced to admit time and again to her left wing that there weren’t the votes in Congress to pursue the liberal vision of “single-payer” health care, wherein the government taxes the people to provide blanket medical insurance via the existing health care infrastructure, earning the right to form a monopsony over the medical system. Once in that position, government would dictate to the medical system the approved schedule of treatments and prices. Expensive procedures will be rationed by availability. Innovation will be stifled. Wise Bureaucrats will be empaneled to pick at the extraordinary costs pertaining to end-of-life care. Choices will have to be made, and they will be – like this legislation – too important to leave in the hands of the people.

When Obamacare fails – as it will – to constrain costs, hands will be thrown into the air over the whole matter of private choices for personal services. It simply can’t be done, they’ll say. We tried.

The next tunnel at the end of Paul Krugman’s tunnel is single-payer health care. When it comes, it will fundamentally restructure the relationship of the American citizen to his government.

It may take a while to get there.

Sometimes you settle for half a loaf.

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Filed under Best of Neptunus Lex, by lex, Carroll "Lex" LeFon, Carroll LeFon, Lex, Politics and Culture

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