Wednesday, January 26, 2011

Obama Assessment, Year Two: Health Care

Universal health care will be the signal achievement of the first Obama administration. Long after the recession is gone and the Iraq and Afghanistan wars are over, all Americans will be able to afford basic health care.

I am confident the net effect will be to reduce health care costs, as we eliminate the overhead costs of preventing some people from getting care, and of forcing other people to use emergency rooms for basic medicine. As we integrate the health care system better, standardizing reporting, records, and electronic information, we should make the whole system much more efficient. Indeed, we should be able to make it a true health care system for the first time.

The health care law as we have it has many problems, most of them inflicted by legislators protecting specific home-state or big-donor industries. The government will improve the law for decades to come. Right now the Republican leadership is making a show of repealing universal health care, but this is more theater than substance. Universal health care is overwhelmingly popular, and they know that it will become more so as Americans come to count on it as much as they do on Social Security and public schools. The act will cost more in the short run, as millions of people are included in regular (not just emergency) health insurance, but the Republicans know it will starting saving money soon - that is why they specifically exempted health care repeal from their requirement that all new bills reduce the deficit.

The United States has the best health care for those who can afford it, but a truly terrible health care system. We have started on the long road to fixing that problem.


Phil 3:14 said...

I'm highly skeptical that it will keep down costs. As evidence I would point you to this graph.

If Medicare is any indication as to how a US Governmentally run-program controls health then I'd suggest that this bill, PPACA, which increases Federal Government involvement in health will at a minimum, have the same impact on cost reduction (i.e. none)

The highly-touted GAO cost assessment was "plugged in" with faulty assumptions, not the least which was the absence of the "doc fix". Increasing costs are at the core of the problem of the uninsured

Phil 3:14 said...


eliminate the overhead costs of preventing some people from getting care, and of forcing other people to use emergency rooms for basic medicine

Most people who use the ER for "non-emergent" care have insurance. Access to primary care and other "convenience" factors play the big roles. "Successful" health systems elsewhere have a 2/3, 1/3 ratio of primary care to specialty care. That ratio is reversed in the US. We will not have a more effective and cost effective system without a larger primary care base.

In Mass they passed universal coverage and their ER utilization went up. There aren't enough PCP's to handle the demand.

Gruntled said...

As I have argued in several earlier posts, I think health care is now a common good like education. There are many ways to provide it, but we need to come up with one that will get us there.

I think the German system, with private insurers competing to supply a required basic coverage to all is the model that would work best in the U.S. I do think T.R. Reid is right that if we a German market with French medical information systems, costs would be lower. And, of course, coverage would be much better than we have now.

Your call for more primary care physicians is fine with me. I think the National Health Service is a good base to build on, but I am open to any system that works.

Whit said...

I think the biggest conceptual problem with health care is your "common good" assumption (and we see how much good the common good of public education has done in inner cities). The problem is not so much that society might wish to supply basic healthcare to everyone, but that ObamaCare seeks to prevent the provision of the best healthcare to those who can afford to, and want to, insure against it.

A better concept would be to provide every American a Health Savings Account with a set government deposit into the account each year (which might increase with age). Allow interstate competition and remove most coverage mandates to reduce cost and increase choice. Then require insurance companies to take all comers younger than say age 26. Companies could not drop you because you get sick, and the HSA would cover the cost of basic insurance. The only uninsured would be those who either elect not to be covered or who drop it later.

Insurance would not be tied to your job, so you could quit to take another job or start a business without worrying about insurance. You could choose the level and type of coverage, and the cost, so no need for the government to prescribe what should and should not be covered. If you are pro-life, your policy would not cover abortion. If not, you could buy abortion coverage. And it would be best to have high deductible policies to bring a little cost consciousness into medical decisions.

What ObamaCare does is, in effect, have the government take over deciding what care should be provided to everyone, at what cost to the taxpayer, and then make the successful pay for it all. Sure it could be less expensive if care is rationed, or prices are controlled (which leads to rationing as supply decreases). But thinking that smart, unbiased expert elites, if such exist, can better set prices or allocate resources than a free, competitive market (which we don't have now)can only be a product of ideological assumptions divorced from factual reality and history.