Health Care Reform Moves Ahead

Even for a skeptic such as myself this is good news. The idea that the Senate Democrats have reached an agreement and have legislation that they can get sufficient votes to pass is a massive step forward for the country. That the bill being proposed lacks many features I would have preferred to see – I am an unreconstructed advocate of a single payer system – is, ultimately, less important than the simple fact that a bill, any bill, is being voted on this week. If all goes according to plan [Joe Lieberman we are looking at you] America will, at long last, have a chance to untangle the mess that is its health care system.

The reason I can support the bill is not so much its content, as I have said I find much to be critical of, but that at a more fundamental level we have just seen a sea change in our politics. For the first time in many years, if not decades, our government has been presumed to have an important role to play in shaping economic outcomes. This sea change in the terms of our national debate explains the hysterical opposition that right wingers have thrown up. Ever since Reagan sent us down the road of illusion the central premise of legislation was to limit government and expand the market. That road brought us to grief in the financial sector and has us headed to an even more cataclysmic crash in health care. We have finally altered the shape of discussion. Hopefully from here on similar debates will be somewhat more easy and less fraught with ridiculous and often contradictory claims of creeping socialism or fascism.

This is something for us who do not believe in the magic of the market, as told to us by the ideologues anyway, to cheer about the holiday season.

For those of you who remain unconvinced I turn your attention to the following facts, culled from Atul Gawande’s excellent reporting:

• The Senate bill will extend coverage to about 94% of all Americans.
• Lack of coverage caused approximately 45,000 premature deaths last year.
• Health care costs are slowly destroying our economy: the annual premium for a typical employer provided plan has risen from $5,800 to $13,400 in just the past ten years. At the same time the average cost per beneficiary of Medicare has risen from $5,500 to $11,900. This is the very definition of an unsustainable trajectory.
• Health care consumes about 18% of every dollar the nation earns. That figure is set to rise to 25% as the population ages.
• Health care costs are sinking our competitive ability: our auto industry was largely destroyed by the burden of providing coverage for workers who were not even employed any longer. Other manufacturing industries are sinking under the same weight.
• Our health care system is legendary for its inefficiency. We lead the world in paperwork, but lag way behind in health care outcomes. For a nation wired end to end, our health care providers are stuck in the technological dark ages.
• While other Western nations may struggle with the cost of their systems, ours sets the record for waste. The cost has doubled in ten years while the outcomes have generally stayed the same or even worsened. We are pouring money down the drain.
• Our system is awash with glittering new technologies and drugs all of whom have a common theme: they are expensive. We lag the world by vast stretches in cheaper treatments and low cost approaches.

This list could go on further. But there is no point. The salient feature to hammer home is that our system has failed us as a social enterprise. Completely. We get a very poor return on our huge investment. With the impending demographic shift the nation is to undergo as the baby boomers age and start to cost a lot more – yes, that’s the right way to think about it – we have a clear choice: bankrupt ourselves or reform.

As I have said here many times, health care reform is a cost driven issue first and foremost.

Does the Senate bill past muster in that regard? Yes it does. The Congressional Budget Office scoring is quite strong. This legislation, flawed as it is, will save the country money. Frankly those whose opposition to health care reform was predicated on its cost should either now apologize or simply shut up: the CBO has given it the green light. The Federal budget can breath a sigh of relief. Deficit hawks can sing songs of rejoice. That is if they have the courage to recognize the reality of what this legislation represents.

Those who cling to market magic as the be all and end all for economic problem solving have totally failed to build an alternative case. This is for a very simple reason: they can’t. Market based economic theory doesn’t work in health care. It breaks down on many technical and theoretical levels. The best evidence is the system we have today: the incentives to doctors and other providers is to use the most expensive care they can. That’s where the money is. That’s where they can make the most profit. Whenever a system is driven by the profit motive it will hurtle out of control unless competition is strong enough to rein it back in. It is impossible to build the right level of competition into health care without using draconian regulations that are far more invasive than a simple government system would be.

Markets are not always perfect. How refreshing to able to say that in the context of a major national debate. Sometimes the government is less of a problem than the market is.

The ability to make that comment alone makes this legislation worth holding my nose for.

So today’s news that the Democrats have to votes to move forward is the first step towards not just cheaper health care, but better health care.

And even a skeptic like me can be happy about that.