Tuesday, March 16, 2010

Yet another health care post

I'm sick of them too, but this is the most important domestic policy debate we've had since 9/11, so it's worth getting a little sick and tired of talking about.

Matt Taibbi, who I ordinarily quite like, posted a note this morning expressing his skepticism that this health care bill is going to get us anywhere close to the kind of systemic fixes our health care system requires. I disagree, to the great shock of anyone strange enough to still be reading this blog, and posted a comment that I kind of liked, so I'm reposting it here:

Matt, it doesn't suck. Here's why.

First, in exchange for the massive "subsidy", insurers are going to be forced to stop screening for pre-existing conditions. This is a massive, massive win for the public, and the only way to make it possible (without moving to single-payer, which would be better but wasn't on the table) was to mandate coverage. You're a smart guy, you've heard this before, so I'm curious why you don't think it at least balances out.

Second, insurance companies aren't really the problem. They're a problem, but probably not the biggest. This American Life did a show on health care a few months ago that made a pretty compelling case that hospitals are at least as much to blame as insurance companies, who often have little leverage and get by by denying coverage (something this bill dramatically cuts back.)

Ultimately, the real problem is that we have a decentralized health care system - it relies upon thousands of hospitals making deals with hundreds of insurance companies, all over the country, and there are few if any efficiencies of scale, so we have to pay all kinds of transaction and opportunity costs. If we had a more centralized system - in the extreme, one nationwide "insurance" system paying one nationwide system of hospitals and doctors, and negotiating prescription drug prices - we'd save a ton of money and sacrifice little if anything in the way of care or benefits. This legislation moves us unambiguously closer to that, not just in terms of the system we'll be getting, but also by reorienting the political center around a more-progressive health care system. Ten or fifteen years from now, a sensible centrist will find nothing at all problematic in the idea of universal health care, or in the idea that the government has a role to play in making that possible. And that's how we move to a better system overall.