Should Congress Even Try to Achieve Universal Coverage?
If the goal is to improve health, then the answer is clearly no.
Ironically, even though universal coverage is presumably about helping the sick, the Democrats’ pursuit of universal coverage demonstrates not how much, but how little they care about their neighbors’ health.
Economists Helen Levy and David Meltzer explain, in a book published by the Urban Institute, “There is no evidence at this time that money aimed at improving health would be better spent on expanding insurance coverage than on…other possibilities,” such as clinics, hypertension screening, nutrition campaigns, or even education. In the Annual Review of Public Health, they explain further:
The central question of how health insurance affects health, for whom it matters, and how much, remains largely unanswered at the level of detail needed to inform policy decisions…Understanding the magnitude of health benefits associated with insurance is not just an academic exercise…it is crucial to ensuring that the benefits of a given amount of public spending on health are maximized.
If Democrats were serious about improving health, they would first gather evidence about which of those strategies produces the most health per dollar spent. (As I recommend elsewhere, the $1.1 billion Congress allocated for comparative-effectiveness research should just about do the trick.) Democrats would then fund the most cost-effective strategies, which may or may not include broader insurance coverage.
But the fact that Democrats are pursuing universal coverage without any such evidence necessarily means that they are willing to sacrifice potentially greater health improvements to achieve…whatever else they hope universal coverage will achieve.
Universal coverage is not about improving public health. It is about subordinating health to some X-factor that supporters value even more.
Which leads to an even more intriguing question: what is that X-factor?
Financial security? (If so, would universal coverage achieve that? Or are there better strategies?) Political power? Dependence on government? Industry subsidies? The appearance of compassion?
I’d like to see that question put to the group.
(Cross-posted at National Journal’s Health Care Experts Blog.)
Why the Democrats’ Health Care Overhaul May Die
The problem that Democrats have faced from Day One is finally coming to a head.
The Left and the health care industry both want universal health insurance coverage. The industry, because universal coverage means massive new government subsidies. The Left, because that’s their religion.
But universal coverage is so expensive that Congress can’t get there without taxing Democrats.
- Sen. Jay Rockefeller (D-WV) is the biggest opponent of Sen. Max Baucus’ (D-MT) tax on expensive health plans because that tax would hit West Virginia coal miners.
- Unions vigorously oppose that tax because it would hit their members.
- Moderate Democrats in the House oppose Rep. Charlie Rangel’s (D-NY) supposed “millionaires surtax” because they know it would hit small businesses in their districts.
And on and on…
But if congressional leaders pare back those taxes, they lose the support of the health care industry, which wants its subsidies.
- That’s why the health insurance lobby funded this PriceWaterhouseCoopers study saying that premiums would rise under the Baucus bill: the $500 billion bailout they would receive isn’t enough. They also want – they demand – steep taxes on Americans who don’t buy their products.
- The drug companies, the hospitals, and the physician groups are likewise demanding big subsidies, and will run ads to kill the whole effort if those subsidies aren’t big enough.
As always, health economist Uwe Reinhardt put it colorfully:
It’s no different from Iraq with all the different tribes…‘How does it affect the money flow to my interest group?’ They are all sitting in the woods with their machine guns, waiting to shoot.
Once the shooting starts, industry opposition will sway even Democratic members, because there are physicians and hospitals and employers and insurance-industry employees in every state and congressional district.
Can President Obama and the congressional leadership satisfy both groups? My guess is, probably not, and this misguided effort at “reform” will therefore die. Again.
Panic Starting to Set in Among Advocates of Government-Run Health Care
Until now the usual suspects hoping to win a government takeover of America’s health care system appeared to be confident of victory. No longer, however. Some of them, at least, are starting to notice the fact that health care “reform” will be incredibly expensive at a time when the U.S. government has no money. Indeed, the problem is not that the Treasury is empty. Rather, it is filled with IOUs for which foreign creditors, such as China, now worry about collecting on.
Writes Jonathan Cohn at the New Republic:
Attention fellow liberals who want health care reform: You are in danger of losing the fight for universal health insurance. And it’s not only–or even primarily–because of the public plan.
It’s because of the money.
Well, contrary to the belief of many on the Left, money does matter. As much as we all might wish, money does not grow on trees. And running the printing presses isn’t the panacea that some believe.
Cohn seems surprised that the Congressional Budget Estimate came in so high, but a complete bill almost certainly would cost even more. Thankfully, the government-takeover bandwagon has hit a large bump, and even larger barriers must be overcome for health care “reform” to triumph.
Filed under: Health, Welfare & Entitlements; Tax and Budget Policy
Why Health Care Reform Is Not a Sure Thing
Over at NPR.org, I’ve got a commentary that explains why comprehensive health care reform is far from certain — current events notwithstanding. Read it, recommend it, comment on it.
From the NPR piece:
There are two things standing in the way of Democrats’ plans for universal health insurance coverage: math and politics.
First, the math. According to the Urban Institute, covering the uninsured would cost a minimum $120 billion per year. Over 10 years, that comes to about $1.6 trillion.
That money’s gotta come from somewhere. And that’s where politics comes in. Everybody wants that money to come from someone else.
UPDATE: Here’s my appearance on Fox News today, discussing lobbyists’ proposal to cut health care costs:
Also, is health care a right?
There Ain’t No Such Thing as Market-Based Universal Coverage
Over at The Corner, Harvard Business School professor and Manhattan Institute scholar Regina Herzlinger urges conservatives to support universal coverage — but in a market-oriented way. That is an absurdity. Once the government adopts a policy of universal health insurance coverage, a free market is impossible and the casualties begin to mount.
As a model, Herzlinger points to Switzerland, “which enables universal coverage without any governmental insurance through this system.” Switzerland requires all residents to purchase “private” health insurance; dictates the content of that insurance; and dictates the price. As I explain in a recent Cato paper, once the government controls those decisions, you’ve got socialized medicine.
My colleague Mike Tanner observes that the Swiss government’s power to control the content of “private” health insurance allows special interests to lard up people’s health insurance with their services — whether Swiss consumers want them or not:
The expansion of benefits has driven up the cost of insurance…As Uwe Reinhardt has noted, “Over time, the growth in compulsory benefits has absorbed an increasing fraction of the consumers’ payment, thus compromising the consumer-driven aspects of the Swiss system.”
Tanner also reports that the government’s power to dictate health insurance premiums is harming the sickest Swiss:
Evidence shows that the community rating requirements are…leading to the over-provision of care to the healthy and the under-provision of care to the sick. In addition, the prohibition on risk management discourages the development of new and innovative products.
In this Cato paper, University of Chicago business school professor John Cochrane explains how such price controls harm sick patients and suppress innovative new products.
Herzlinger is an extremely passionate and knowledgeable advocate of market-based health care. But when it comes to universal coverage, readers of National Review are better counseled by the magazine’s editors, who write:
to achieve universal coverage would require either having the government provide it to everyone or forcing everyone to buy it. The first option, national health insurance in some form or other, would either bust the budget or cripple medical innovation, and possibly have both effects. Mandatory health insurance, meanwhile, would entail a governmental definition of a minimum package of benefits that insurance has to cover…
Republicans should go in a different direction, proposing market reforms that make insurance more affordable and portable. If such reforms are implemented, more people will have insurance.
Some people, especially young and healthy people, may choose not to buy health insurance even when it is cheaper. Contrary to popular belief, such people do not cause everyone else to pay much higher premiums. Forcing them to get insurance would, on the other hand, lead to a worse health-care system for everyone because it would necessitate so much more government intervention. So what should the government do about the holdouts? Leave them alone. It’s a free country.
Herzlinger is correct that “it is 2009, not 1992.” If we want America to remain a free country in 2009 and beyond, we must reject universal coverage.
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