Before I write this post, let me say three things.
First,
a lot of this has already been argued elsewhere, more persuasively, by
others. That's what I get for waiting so long to publish this.
Second,
I'm
not being a "party of no" guy. I want some version of health care
reform to pass. In fact, I support all of the president's major reform
principles. I just have grave doubts about his proposals for getting us
there.
Third, I'm not going to say much about
solutions, despite having spent an inordinate amount of time thinking
about them. At a certain point it occurred to me that even if I came
up with the silver bullet of reform, who would care? It's not as if I'm
the Dems' go-to guy on health care.
Sooooooo, with all of that out of the way, here we go.
I
said in my earlier post that the problem with the Obama press
conference was that it wasn't intellectually honest. In my mind, if
these reforms make sense, then you ought to be able to present them
honestly. If you can't present them honestly, they probably don't make
sense.
I'll give
two primary examples (though only one in this post). On the crucial
"how do we pay for it?" question, the president said that two-thirds of
of the cost could be covered through more efficient use of current
resources. In part, this was a "waste, fraud, and abuse" argument, the
sort of argument that Democrats used to mock when it came from Ronald
Reagan. Why did they mock it? Because reducing waste, fraud, and abuse
is easy to talk about but hard to do. That's why the normal state of
affairs for our federal government is to run very large deficits.
That's why most states have been through agonizing budget deliberations
over the past couple of years.
The
simple truth is that one man's waste, fraud, and abuse is another man's
pet program. I mean, if big health care savings in the form of waste,
fraud, and abuse were really there for the taking, would we not have
taken them already...in this era of annual budget deficits that exceed
a trillion dollars? in a time when Medicare is facing imminent
bankruptcy?
Despite
the seemingly obvious answer, the president insists that we are paying
for expensive treatments when cheaper ones would do the job just as
well; and that we are paying for treatments that are simply
ineffective. Let's assume that he's right on both scores, and that
we're able to identify the unnecessarily expensive and ineffective
treatments. If you're going to save money on this basis, someone will
have to say, "No, we're not going to pay for that any more." This is
NOT something that patients will want to hear, nor is it something that
politicians will want to say.
On
the former point, I know from years of debating politics and policy
that your average person does not think in terms of, and is not easily
persuaded by, scientific research. To use a very simple example, if you
tell someone that medical researchers have failed to find a link
between daily use of echinacea and the avoidance of colds, that person
might very well say, "But my kids and I take echinacea every day, and
we never get sick!" If you tell them that the generic version of a drug
works just as well as the brand name version, you're likely to hear,
"But my husband switched to one of the generic cholesterol drugs, and
all of a sudden his bad cholesterol went through the roof." If you tell
them that there's no evidence that such-and-such a procedure helps to
cure Disease X, once again, they are likely to repond with, "But I know
someone who...", or to tell you that even if there's only a
million-in-one chance that the procedure will help them, they want to
try it.
In short,
many people believe what their own experience tells them, or what they
want to believe, or what they have some vested interest in
believing--notwithstanding any medical/scientific evidence to the
contrary. Accordingly, when a reformed system refuses to pay for things
that people believe might help them, they're not going to be dissuaded
by a stack of peer-reviewed journal articles. Instead, they're going to
complain to their elected officials who, as I noted above, are not very
good about saying "no."
Mickey
Kaus also suggested an interesting thought experiment on the subject of
waste, fraud, and abuse: Imagine that Obama were applying this argument
to education instead of health care. Imagine, that is, that he had
proposed a new, trillion-dollar education initiative. Dems would love
it, right? But then imagine that the president had proposed to pay for
it through $650 billion in specific cuts taken from existing education
programs. And on top of that, imagine he had claimed that the programs
slated to lose $650 billion would suffer no loss of effectiveness as a
result.
Such a
proposal would be dead before reporters finished jotting down the
details in their notebooks. Congressional Democrats would never accept
that you could take that much money out of existing programs without
doing damage to them.
In
the case of health care reform, though, the cuts are non-specific, that
is, we don't know exactly where they will come from. So, it's easy
enough for Democrats to suspend disbelief--or worse, to secretly think,
"When the rubber meets the road, there aren't going to be any serious
cuts. But the president will take the blame for that one, not us..."
Rammesh
Ponnuru raised another insightful point of on waste, fraud, and abuse:
If there are tens of billions of dollars (at least) in wasted spending
to be found in government-funded health care programs, does it make
sense to expand the government's role in the provision of health care?
Maybe we should be looking for a more responsible steward of our tax
dollars.
One final
note on the savings argument. The president mentioned the possibility
of saving substantial sums by changing medical delivery systems. One
has to infer what he meant, because he was never quite explicit. But he
did make reference to the Mayo Clinic and its combination of low cost
and excellent outcomes. He and his advisors have referred elsewhere,
too, to the relatively high costs of a fee-for-service payment system
in comparison with a system of capitated payments.
So,
let's assume that there's lots of money to be saved by switching to a
medical service model based on capitated payments and Mayo's
coordinated care approach. How, exactly, do you switch the vast public
and private healthcare industry over to this new model? Who bears the
cost for that? How long will it take? What if providers don't want to
go along?
I mean,
really, imagine saying to a three-person urology practice with a heavy
Medicare caseload: "Okay, we're going to start paying you per patient
rather than per service. Maybe you'll get lucky and all of your
patients will cost you less than what we pay. On the other hand, if one
or more of your patients costs more than what we pay, well, the
difference comes out of your pocket. Also, we're going to need you to
find some way of coordinating each patient's care with that patient's
other medical providers. We're really looking for a team approach. So,
figure out a way to provide coordinated care, or we may have to take
you off of the Medicare approved provider list."
It's
not hard to imagine the doctors in this particular urology practice
saying, "Screw you. We just won't take Medicare patients any more."
That might save the government a lot of money, but only because
Medicare patients won't be able to find doctors willing to take on the
risks and burdens associated with treating them.
Recognizing
all of the foregoing, if we're really concerned about the cost of
health care reform, shouldn't we be skeptical about the capacity of our
political system to produce the promised savings, and shouldn't we wait
for those savings to appear before we start spending them?
