We’re waist-deep in the Big Muddy,
And the old fool says, “Push on!”
– Vietnam era song lyric
At my age, one doesn’t give up seven-plus hours of one’s life lightly, so I didn’t watch the “bipartisan health care summit” last Thursday. Leaving aside a handful of outliers, the pundits who did watch agree that, if the President’s objective was to hold the Republican Party’s neanderthal tendencies up to the ridicule of the world, he failed.
Predictably, his and the Democratic Congressional leadership’s immediate reaction has not been to rethink their scheme for vastly expanding the government’s role in health care. No, they will push on in the teeth of negative public opinion and daunting legislative obstacles. Didn’t these guys ever learn about quagmires?
The motivation is, I suppose, expressed in another old lyric: “Freedom’s just another word for nothing left to lose.” The Democrats have placed themselves in what looks like a politically hopeless position. Either advance or retreat almost certainly dooms them in November. Having nothing left to lose, they are freed from the restraints of prudence.
The argument for advancing is, I suppose, that “something may turn up”. The bill might pass, which would be a fine progressive achievement, and then some fortuitous circumstance – a dramatic economic turnaround, decisive victories in the War on Terror, the discovery of John Boehner in Dick Cheney’s bed – might make the voters forget that they loathe the Democrats for having enacted it. Or the bill might fail but so inspire rank-and-file progressives that their unprecedented turnout at the polls holds Democratic losses to a minimum. Or the horse might learn to sing; that is, having had Obamacare rammed down its throat, the public might discover that mandates, taxes, deficits, price controls, shortages, rationing and bureaucracy taste great.
The real obstacle to the last prospect is that the horse’s teacher is tone-deaf. What Americans dislike about the current state of American health care is the seemingly inexorable rise in costs. There are lots of reasons for that: an aging population, market inefficiencies (because near-universal third-party payment makes consumers indifferent to price), an excess of “defensive medicine” impelled by the threat of malpractice suits, the decreasing attractiveness of careers in the medical profession, the inescapable fact that the most effective medical treatments often require the greatest expenditure of human, technological and intellectual resources. In brief, many factors collude to push the demand curve up and the supply curve down.
On the other hand, care is not made more expensive by the mere inability or unwillingness of a fraction of the population to obtain health insurance. Insurance is a hedge against risk (or, in the case of medical care, very often a method of pre-payment for routine services). Having car insurance doesn’t mean that a new car will cost less if your old one is totaled. An insured house that burns down can’t be replaced more cheaply than an uninsured dwelling. It is a petty fallacy to think that, because an insured patient pays only a small amount out of pocket, insurance “bends the cost curve downward”. The price is the same; only the payor changes.
Obamacare deals almost exclusively with the mechanics of paying doctors, nurses, hospitals and pharmaceutical companies, with the aim of making insurance companies (stigmatized as heartless ogres in Democratic rhetoric) a nearly universal conduit. Some of its provisions, such as banning policies that protect only against catastrophe, will increase demand. The measures that may dampen demand are secondary and chancy. It’s not impossible that panels of experts applying “evidence-based medicine” will expose and eliminate a plethora of expensive, ineffective treatments. It’s also quite possible that they will stifle innovation and metamorphose into arbiters of who is “worthy” of top-notch care.
Nothing at all in the Democrats’ plan even tries to make medical resources more abundant. Quite the contrary: As the terms of arrangements between patients and providers become more and more a matter of regulation, price signals will grow weaker and less effective. We will all have the right to cheap, abundant, high quality health care. Unfortunately, no one will have the duty to give it to us.
On the most optimistic view, all that Obamacare can accomplish is what, in objective fact, it aims to accomplish, namely, shift the burden of paying for medical care away from its immediate recipients. Beyond that, either costs will continue to rise, or the rise will be halted through price controls and rationing. Neither outcome is likely to lead to Barack Obama’s being remembered as a second FDR.