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The Public Option and The Camel's Nose

Peter Boyer at The New Yorker reacted to last night's presidential speech with a short essay that upbraided Republicans for turning the term "public option" into "the most effective weapon against reform." This response, hysterical on the part of the zealots and cynical on the part of the vested interests, is completely at odds with the option's humble aspirations and limited potential, since it "was conceived as a means of accommodating moderates, bringing market forces to bear on the problem of cost by creating a new entity to compete with private insurers."

Who, exactly, conceived the public option in these humble terms? Not Jacob Hacker, the prominent health policy expert at UC Berkeley, and not Roger Hickey of the Campaign for America's Future. According to Mark Schmitt of The American Prospect, Hacker and Hickey were the driving force behind the successful effort to sell the public option to liberal activists and the leading Democratic candidates in 2007 as a way to surmount the political impediment posed by the "hard reality" that large numbers of Americans are not willing "to be put into one big health plan run by the government." The point was to assure the Democrats' single-payer advocates that the public option was "a kind of stealth single-payer," one that "would someday magically turn into single-payer." The new public option was designed, not merely to compete with private insurers, but to win that competition in a rout and "become the dominant player" in the health insurance market.

Neither is Jonathan Cohn of The New Republic playing small ball. He recently urged liberals not to let the best be the enemy of the good on health care policy. Even if only part of the whole wish list can be enacted now, those parts will make possible the enactment of the rest down the road, he advised: "It's not as if it will be impossible to scale up these reforms later on. If Congress passes and the president signs a bill putting in place the key institutional elements of reform now, they can always revisit, and strengthen, the measure later. During the 1980s, Henry Waxman almost single-handedly expanded Medicaid to its current levels by gradually making more people eligible and securing the funding to pay for them. All he needed was the institutional structure--the program, the rules, and the basic funding stream--on which to build the new coverage. The fact that Waxman is a chief architect for this year's program ought to give liberals confidence that, once again, these reforms needn't represent the upper limit of what might be achieved over the next few years. They are a start, and a very good start, but not a finish."

Pres. Obama's characteristically self-effacing pronouncement - he "will not waste time with those who have made the calculation that it's better politics to kill this plan than improve it" - has nothing to say to legislators or citizens who believe it is better governance to abandon a plan that is flawed in ways so fundamental that no improvements could possibly mitigate the damage it will do. There is precedent. Democrats four years ago did not exert themselves to find ways to improve George Bush's Social Security plans. Instead, they decided that it was good politics and good enough governance to kill it, rather than haggle over details about private retirement accounts or formulas for curtailing the growth of benefits to more prosperous Social Security recipients. Indeed, seven years after Pres. Bill Clinton had made the urgent need to "save Social Security first" the focus of a State of the Union address, the Democratic consensus became that there was nothing to save Social Security from, that the program's finances were in splendid shape for as many decades into the future as any sane person could care about.

Republicans today are similarly averse to entering negotiations that require them to jettison, as a condition for a place at the table, their fundamental belief about American health policy: The bigger cause for the shortcomings of the American health care system is not the good things government should be doing but isn't, but rather the many things it is already doing - some badly, and others that it ought not to be undertaking at all. Before discussing the next increment of government regulation and spending, say Republicans, let's optimize the government's current massive and maladroit intervention into the financing of medical care.

As it happens, Rich Lowry of National Review provides several recommendations along these lines today:

  1. Modify tax policy to eliminate the disincentives for individual purchase of health insurance and health care.
  2. Eliminate regulatory barriers that prevent small businesses from cooperatively pooling and self-insuring their health risks by liberalizing the rules that govern voluntary health care purchasing cooperatives.
  3. Eliminate laws that prevent interstate purchase of health insurance by individuals and businesses.
  4. Eliminate rules that prevent individuals and group purchasers from tailoring health insurance plans to their needs, including federal and state benefit mandates and community rating requirements.
  5. Eliminate artificial restrictions on the supply of health care services and products, such as the overregulation of drugs and medical devices, as well as state and federal restrictions on who may provide medical services and how they must be delivered.
  6. Improve the availability of provider and procedure-specific cost and quality data for use by individual health consumers.
  7. Reform the jackpot malpractice liability system that delivers windfall punitive damage awards to small numbers of injured patients while it raises malpractice insurance costs for doctors and incentivizes the practice of defensive medicine.

So, Mr. President, should Republicans waste time with those who have made the calculation that it's better politics to kill these proposals than improve them?

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