Put healthcare to a vote, hope it is defeated, and move on.

The US healthcare system has two fundamental problems: It costs too much and at least one-sixth of Americans are effectively excluded by lack of insurance or inadequate insurance from reasonable access to the system. At the beginning of the legislative process in 2008, it seemed possible that there could be a "grand bargain" in which insurers and healthcare providers would receive the enormous benefit of mandatory, government subsidized insurance coverage for almost all Americans, and in exchange would accept provisions to stop the growth of overall costs and perhaps start to reduce them. That didn't happen. The pending bill is all quid and no quo.

Hospitals and physicians like the bill because the mandatory insurance provisions will make it possible for them to get paid for a lot of the services they now do pro bono. The bill is good for insurers (although they are still bargaining for more) because it will give them 30 million or so new taxpayer-subsidized policy holders, and no effective limits on their pricing policies or profit margins. There is even a provision that may perversely drive up insurance costs. The other big political players, drug companies and device and equipment makers, may anticipate some sales growth but are otherwise unaffected. The so-called cost containment provisions are limited to studies, pilot programs, increased anti-fraud measures, and other eyewash measures that don't require any belt-tightening by anybody.

Those in favor of the bill say we should get this big "reform" in place and "fix it later." They don't explain—and I think there is no way to explain—how subsequent legislation to drive down costs will overcome the opposition of a healthcare industry that will stand united against measures that only threaten to reduce their incomes. Proponents say that if we don't pass healthcare now, we can't hope to address it for another generation, but they are implicitly abandoning—for another generation or longer—the opportunity to address the society-destroying affordability problem, which is a much more serious problem than incomplete coverage. I say forcing more Americans into a system on the verge of economic collapse will only hasten and exacerbate the collapse, whereas fixing the cost issues would by itself lead to expanded coverage. Presidential candidate Obama was right when he said this:

A mandate means that in some fashion, everybody will be forced to buy health insurance. ... But I believe the problem is not that folks are trying to avoid getting health care. The problem is they can't afford it. And that's why my plan emphasizes lowering costs.

Our fundamental economic problem is that real incomes have not increased since 1973 for the five-sixths of working Americans who are not bosses, while healthcare costs have continued to increase at an average annual rate of 3.6%—which means they double in real terms every 20 years. Link. If the real incomes of ordinary people had continued to rise at or near the rate that real healthcares costs have risen, we would not have a big healthcare crisis now. But they didn't, and we do. I have argued that the best solution to this and many other problems is doing whatever it takes to get real wages for ordinary people steadily rising again, but there's no political will to do that. The pending healthcare bill is yet another trickle-up program to support rising incomes of healthcare firms and professionals, all of whom are protected by law and practice from any real competition. They and others at the top of the income pyramid need to recognize that their revenues cannot keep rising when their customers' incomes are stagnant.

Some say President Obama and his advisors have mismanaged healthcare reform and that's why we have a "dogs breakfast" of a bill and a reversal of his campaign promise to address costs instead of mandatory coverage. Perhaps it was mismanaged, but it seems more likely to me that there was never any prospect of enacting cost containment over the objections of the politically powerful healthcare industry.  We should not increase that political power more by passing the pending "reform" package. 

Comments

[Christine]

If the healthcare bill is defeated Obama really looks like a loser..even to himself I think...this is where the crunch is. He said he would do it. He didn't say he would do it right, but that he would do something. He's at a place where I think he will see that the rubber has met the road in terms of his own credibility. I don't think that has happened elsewhere...even if we think it has. This will be interesting to watch. Heretofore he has chosen his own compromises. Now he is in position to lose completely and he deserves to. How will he deal with it?