There seemed to be at least two over-riding criticisms of the newly passed healthcare reform law:
1) It would not, contrary to official estimates, reduce the deficit, but rather add to it.
2) It would represent something more or less "un-American"- a significant expansion of government at the cost of free market choice and competition and a general ideological move towards socialism.
What I am perhaps most pleased about with this bill is that over the coming years, certainly the next 5-10 years, we can evaluate these claims with real world results and see who is right. We can test these claims, comparing Congressional estimates of cost with those of the Administration and the Wall Street Journal and Rush Limbaugh and the American Enterprise Institute and Brookings- and we can see who was most correct. Afterall, prejudging outcomes and assuming away complexity in favor of one sized fits all answers and ideology is anathema to science. So let's sit back and see the results of this experiment. These arguments will not linger abstractly out in the ether of public debate and controversy forever, with two sides eternally duking it out over fundamentally unproveable philosophical or moral questions (I'm sure more than a few come to mind). We will get hard data about how many more people get healthcare, on the rate of price growth, on the cost of these new mandatory government spending programs on the budget and tax rates, on the success and replicability of the 27 cost control and quality care pilots this bill establishes, on whether we remain a country of elections and predominantly privately produced and procured goods and services, or whether we become the new Venezuela. All of this, and much, much more, time will reveal.
For instance, the intent of these new pilots is to look for best practices, cost control measures, and general innovation in healthcare delivery. The point is to test new things for proof of concept, cutting funds for what doesn't work, and scaling up what does. Evidence based, pragmatic cost control measures are good ideas whether in corporate America or government. Many (potentially) good, cost-saving ideas are in this bill, and the potential savings weren't even priced into the budget estimates. Stuff like bundling payments across hospitals and outpatient services to reduce administrative costs and create greater negotiating leverage, paying hospitals with higher infection and readmission rates less, sending out undercover inspectors to look for waste and abuse, working on payment systems that reward quality of outcome and care over sheer volume (as is currently the case for the fee for service model) and clearly conveying the state of peer reviewed medical literature to practitioners in the field, so there is no ambiguity about the state of scientific knowledge on what works, and what is a waste, both of treatment and money. After all these assertions and claims that have been discussed the last 14 months during the genesis of this law, we will get to concretely see what savings and best practices come out of these 27 seperate case studies. For economists or researchers looking for good data sets and means to test null hypotheses, it's almost overwhelming to think of all the good analysis that could be done. Yet one thing is for sure, we know what healthcare costs today, we know how much waste there is, we know how many errors there are, we know how many people are covered- and now we are about to discover which way this law pushes all these indicators.
One could spend a great portion of her life reading criticisms and attacks of every aspect of this law (and even criticisms of things not in it!) from countless think tanks, research institutes, lobbies, and yes, gasbag bloggers such as myself. But what is so exciting about this historic piece of legislation, in addition to the potential to provide care for millions and root out inhumane abuses in the insurance industry and expand competition and choice- is that we will get to test these assertions very clearly. I just hope we keep score, and in 2020 if everyone takes for granted that kids can't be denied health coverage, or domestic abuse can't be classified as a preexisting condition, or a consumer isn't forced to buy into an oligopoly because the government now forces companies to post their plans side by side online to drive choice and innovation, or that healthcare costs are growing slightly above inflation rather than 250% of it- that we don't shrug this off as just the natural progression of things, as some inevitable outcome or industry innovation. No, like any good science experiment, we have been operating a good control scenario for about the last 50 years, and now we can compare it to the future. If these changes come about, we can make clear scientific arguments of attribution. Whichever side has it right, it will be a triumphant essay they pen in the National Review or Cato blog- an epic example of "told you so!" In other words, after 40 years of debate, it's finally down to the 4th quarter of a close contest, and we're getting closer to seeing who the winner is.
As a caveat, on the first two criticisms- deficit control and socialism- I would point out that this bill cuts $550 billion from Medicare in the next 10 years by eliminating 15 cents on the dollar of Medicare Part D (because it's 15% more expensive than public run plans and gets no better results). CEOs and turnaround private equity guys gets plaudits for this constantly, ruthelessly cutting waste and ineffeciency to force better results and make hard decisions. Oh, and in this case, it will also fulfill a promise the previous administration made to seniors about prescription drug coverage but didn't actually fund. But cutting medicare funding hardly seems like adding to the deficit to me, and curtailing the size of government payouts hardly seems like expanding government. Also, creating competitive transparent online exchanges, for customers to review and scrutinize plans, none of which will be government programs by the way, hardly seems like something that would be expected to increase prices, and hardly something that is socialist, in fact it seems like the essence of market based capitalism.
And from a behavioral economics standpoint, I've decided to take this new system for a spin, test out all my new government benefits by being a little clumsier here and there. JK
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