Help with the Spinach
By Arnold Kling
In health care reform, I have described cost controls as the spinach and expansion of coverage as the dessert. I continue to predict that the Democrats will first go for expansion of coverage in a way that alienates Republicans, and then come back and ask for bipartisan help with cost control. I call this the “dessert now, spinach later” strategy.
I am more than willing to tell Republicans that they should support doing something to control health care spending. But we should have an honest debate over how to do that. I think that spending ought to be controlled in a decentralized way, by having consumers pay for a larger share of health care spending out of pocket (that share is 10 percent currently. Forty years ago, it was 50 percent).
Wonkish Democrats, such as Peter Orszag, want to control health care spending from Washington, by telling people to cut back on wasteful medical procedures. Rabid Democrats, such as Paul Krugman, claim that we can control health care spending by taking profits out of the system.
The rabid Democrats are wrong as a matter of arithmetic–in the long run, there is no way to “bend the curve” by squeezing providers to take less money for the same services. Nonetheless, all of the cost containment currently on offer from the Democrats is of the rabid “screw the drug companies, screw the insurance companies, screw the doctors” variety. I would not advise Republicans to join that game.
The wonkish Democrats recognize that we need to move away from fee-for-service and to cut down on the use of medical procedures. But there are two problems with trying to do this from Washington.
1. The most powerful political influence is not the consumer, but the producer–in this case, health care providers.
2. In choosing where to forego medical procedures, there is a lot more ambiguity involved than Orszag and company are willing to acknowledge. We are not going to find that health care procedures neatly divide between effective and ineffective. Instead, we will find all sorts of morally fraught issues. Does someone with terminal cancer and a broken hip really benefit from hip surgery? Does a colonoscopy protocol that prevents colon cancer cost too much per life saved? etc.