The blogosphere is humming (or is it a roar?) with glee and angst in regards to Obama’s speech. Honestly, I didn’t pay much attention to it, but I did appreciate Robin Hanson’s comments last night.
So he’s going to save $500+ billion over ten years by having an independent commission “encourage best practices”? Actually doing that would require this commission to have enormous power and be willing to use it to create many politically powerful enemies. I see no sign whatsoever that they are actually willing to do this, nor any sign that they would actually be willing to cut medical spending if “spending cuts” somewhere were required by law. So far this still looks like the usual empty campaign promise to pay for spending deficits by “cutting waste and abuse.”
We’ve now seen this claim a hundred times, but does anybody really believe we’ll be able to finance a public option entirely by cutting costs to medicare and then have regulatory bodies keep costs under control by reducing inefficiencies?
I mean it sounds nice, but the federal government has not, in general, demonstrated an ability to improve efficiency in other areas, so why here?
Usually I take this argument with a grain of salt – we can’t assume that the “clash for clunkers” program will tell us anything the public care program (very different infrastructure will be set up) – but there’s something to be said about the central planner problem in cases like these.
How will it be possible to cut waste and not reduce care? I don’t think this is possible, because patients will have a very different idea about what constitutes waste than bureaucrats (even doctors are involved in making decisions).
What I suspect, is that if the public option gets passed, we will realize that the studies comparing American to European health care weren’t telling us the whole story. Health indicators depend on a lot more than complete health insurance coverage. I suspect we’ll see wider coverage, but higher costs (until price controls are legislated, of course) but no significant improvements in general health statistics.
It seems like they are going to game the system with incentives to promote treatment (rather than healthy prevention; diet and exercise, etc) – things that keep people from dying, but not necessarily healthy. Unless price information is introduced, I can’t see how the system – public or private – will be improved.
That being said though, I wouldn’t necessarily say “no” to a public plan that was able to use pricing incentives to encourage consumers to make choices about health care options and introduce real competition between providers. I believe that only a market system can keep costs under control.