Idealism Unencumbered by Reality: Obamacare, pt.1

obamagig George Orwell, in his 1946 essay “Politics and the English Language” said: “Political language . . . is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” There is no more apt description of the political discourse that has defined the “healthcare” issue in this country over the past year. Now that we’ve seen what the Democratic leadership has proposed for legislation, would it be out of line to suggest that someone might owe Joe Wilson an apology?

Of course, it was almost impossible to know much of substance of what was being proposed until the 2,000+ page monstrosities were actually submitted as bills – documents our elected representatives wouldn’t even have read before voting on. For months, the public “debate” consisted of little more than partisan posturing from both major parties – save for some genuine disagreements over public funding of abortion, and the so-called “public option” insurance plan. Despite the constant “healthcare” rhetoric, the real target of political muscle-flexing is the medical insurance industry. Admittedly, questions around requirements for treatment rationing did arise while the public option was still on the table, so perhaps actual healthcare questions may come back into play at some point.

It is impossible to draft coherent policy without a sound understanding of the issues at stake, and it is impossible to understand the issues at stake without coherent definitions of the terms of the debate. The thing that bothers me most deeply about this obvious boondoggle is the almost total lack of interest – among politicians, journalists, or the general public – in making sure the issues are understood before taking a position or making a decision. As usual, we are, collectively, satisfied by an idealism unencumbered by facts, or by any kind of reasoning from ideas to consequences. I fear an economic train wreck coming, masquerading as yet more self-righteous do-goodism, and arrogating ever more power over people’s lives to the state. This is not reform, it’s simply the entrenchment of Big Brother.

The ideal at issue can be summed up as the universal right to healthcare. That sounds great, but what does it mean? In order to get from ideal to sound policy, all three terms (universal, right, and healthcare) need to be understood – not only insofar as their general implications through historical usage would suggest, but also precisely how they are being circumscribed by the current context. We are far from any useful common understanding of any of this. In discussion, this ideal is sometimes modified to propose that everyone has a right to adequate healthcare. The “adequate” modifier is a step in the right direction, recognizing at least that there is not a lately discovered unlimited right to whatever we call healthcare, but at the same time, it really just adds a fourth term to the question requiring resolution. If we don’t know what adequate healthcare is, how can we craft policy to achieve it?

The central term of the debate, healthcare, is so vague and ill-defined that it can mean whatever anyone wants it to mean at any given time, and it invariably does – and you can be sure that trend will continue. Not one of the main actors in this debacle would dare to publicly define exactly what constitutes “healthcare;” they’ll simply proclaim loudly that it must be reformed! It must therefore be noted that the central idea of President Obama’s primary domestic priority is a weasel word which nobody actually understands, or can articulate coherently! This is a textbook example of how a commitment to a vague concept can be abused for unrestricted leverage in policy determination. The point, after all, is not actually healthcare (whatever that means), but “shaping the future of America.”

I am reminded of a saying that I must confess I once accepted as axiomatic (as does virtually everyone on the progressive left): that the rich get richer while the poor get poorer. No doubt the poor, like everyone else, sometimes do get poorer, and there are indeed scenarios where the above dynamic would hold true (e.g. with land grabs by the wealthy, or other usurpations of finite resources). But the saying is usually invoked as a denunciation of wealth growth in a capitalist context, where it makes absolutely no sense. As American wealth has grown, all but a tiny fraction of the populace has seen their standard of living rise to levels simply unimaginable to the vast majority of those whom history has called the poor. It turns out that a rising tide does indeed lift all boats, whether the progressives like it or not. The problem is that all boats don’t rise equally, and envy perceives this lack of uniformity in progress as an injustice, despite the fact that the process is actually working for everybody. Thus, it is an envy-occasioned blindness that gives rise to the mischaracterization of universal but uneven improvement as being a case of “the poor get poorer.”

Likewise, the actual problems in our healthcare system, and/or our healthcare delivery system, hardly seem to me to be of crisis proportion (after all, our healthcare system, by and large, is excellent, and the envy of the rest of the world). I agree that is prudent to be concerned about the rate of increase in healthcare costs proportional to the rest of the economy, but a large part of that cost increase is traceable to the technical revolution in the medical field, which is making more and more treatments available to people, yet which do not – and cannot – come free. Twenty or thirty years ago, we spent much less on medical costs, but we got much less in return. I don’t see anyone trying to turn back the clock on medical technology.

Because of the prevalence of third-party payers, whose role ends up encouraging the over-use of medical resources for non-critical and even frivolous problems, and who in turn have to bundle increased usage costs from both non-critical over-use and constantly emerging technological advances into their own pricing structure, consumers encounter premium increases that may not reflect their own usage of the healthcare system, eventually reaching levels that are economically disruptive, and even pricing them out of the market. We can talk about subsidizing these costs, but unless the causal issues are addressed, the costs are merely being shifted from one pocket to another.

The presence of these third-party payers has also distorted the pricing models of the healthcare providers themselves, inflating the pricing of direct payment markets to sometimes ridiculous levels, effectively eliminating the option of patients paying directly for as-needed a la carte care from providers, as had been the almost universal practice until very recently. This is part of what frosts so many young people who would prefer to stay out of the health insurance market (and who are likely to be forced now to take on these spiraling prices of the third-parties, both directly through premiums, and indirectly through taxation), that the costs for services for those without insurance plans are far and away higher than the insured indirectly pay through their third-party payer. Those who are uninsured not by choice are in an even worse situation. Simply requiring open accounting of provider pricing could go a long way in empowering cash customers (i.e. patients) in search of a fair deal.

The fact that the Democrats tried so hard to include a “public option” in the reform package demonstrates clearly that they do not understand the problems inherent in third-party payer systems, fail to see how sound risk management on the part of payers can limit those problems, and somehow still fail to grasp how much more distorted (not to mention corrupt) the market would be with an increased role for public agencies. It’s not that problems don’t exist in the delivery system; it’s that the Democrats seem bound and determined to make them worse in the name of making them better.

If the basic practical problem is that “healthcare” has become too expensive, there is absolutely nothing in the structure of the proposed reforms that will ameliorate that – in fact, all the guilty parties involved in this know full well that costs will increase. The Chief Actuary at the Centers for Medicare and Medicaid Services has suggested that, with the Reid bill in place, healthcare spending, as a percentage of GDP, will increase from 17% to 21% over the next decade. Nice reform. I also have to assume that this estimate is not assuming overall economic damage, due to the irresponsible tax increases associated with this plan, shrinking the projected GDP, which would almost surely raise the percentage of that GDP spent on government regulated healthcare to an even higher percentage.

If, as it appears, the primary objective is to make “coverage” available to more people, the obvious first step should be to repeal the anti-competitive 1945 McCarran-Ferguson Act, and the second step should be to set up supports for policy portability. What we get instead are Constitutionally dubious proposals to wreak havoc on the medical insurance industry, which appear so poorly thought out that it makes me wonder if this plan is really intended as a time bomb to get a nationalized program in place through the back door of private sector collapse. OK, that’s paranoid. Still…

And, of course, the one surefire way to realize immediate, significant healthcare cost reductions for everybody, tort reform, is, as always, nowhere on the Democrat’s radar as far as I know, despite the fact that, again, everyone involved knows what a real difference this would make. What a disgrace.