Successful Healthcare Reform

If you set the bar for success at anything low enough, success is inevitable. And meaningless. In his column this morning here’s where Paul Krugman sets the bar for successful healthcare reform:

The Kaiser Commission on Medicaid and the Uninsured recently did a focus-group study of Massachusetts residents and reported that “Health reform enabled many of these individuals to take care of their medical needs, to start seeing a doctor, and in some cases to regain their health and control over their lives.” Even those who probably would have been insured without reform felt “peace of mind knowing they could obtain health coverage if they lost access to their employer-sponsored coverage.”

And reform remains popular. Earlier this year, many conservatives, citing misleading poll results, claimed that public support for the Massachusetts reform had plunged. Newer, more careful polling paints a very different picture. The key finding: an overwhelming 79 percent of the public think the reform should be continued, while only 11 percent think it should be repealed.

Or, in other words, healthcare reform will be successful if 1) it helps somebody (“many of these individuals”, in anecdote) and 2) it’s popular. I wonder whether Dr. Krugman adheres to that standard himself. I’m sure if Dr. Krugman awarded A’s to everybody taking his economics courses it would be popular and it would certainly help many of his students. In fact, it would probably attract more students to his courses. Where would one stop with such successful programs?

Meanwhile, Robert Samuelson applies a somewhat different standard for successful healthcare reform and the bills making their way through the Congress don’t reach that standard:

The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more “choice” and “competition”) to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn’t? From 1970 to 2007, Medicare spending per beneficiary rose 9.2 percent annually compared to the 10.4 percent of private insurers — and the small difference partly reflects cost shifting. Congress periodically improves Medicare benefits, and there’s a limit to how much squeezing reimbursement rates can check costs. Doctors and hospitals already complain that low payments limit services or discourage physicians from taking Medicare patients.

Even Hacker concedes that without reimbursement rates close to Medicare’s, the public plan would founder. If it had to “negotiate rates directly with providers” — do what private insurers do — the public plan could have “a very hard time” making inroads, he writes. Hacker opposes such weakened versions of the public plan.

By contrast, a favored public plan would probably doom today’s private insurance. Although some congressional proposals limit enrollment eligibility in the public plan, pressures to liberalize would be overwhelming. Why should only some under-65 Americans enjoy lower premiums? In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people — half the number with private insurance — would switch to the public plan. Private insurance might become a specialty product.

Many would say: Whoopee! Get rid of the sinister insurers. Bring on a single-payer system. But if that’s the agenda, why not debate it directly? It’s not insurers that cause high health costs; they’re simply the middlemen. It’s the fragmented delivery system and open-ended reimbursement. Would strict regulation of doctors, hospitals and patients under a single-payer system provide control? Or would genuine competition among health plans over price and quality work better?

My standard is even simpler: we must reduce what we’re spending on healthcare or, at the very least, reduce the rate at which what we’re spending is increasing without a substantial immediate increase in what we’re spending now.

Every single bill making its way through the Congress increases healthcare spending and is, by my standards, a failure from the get-go. There’s an insidious quality to throwing money at healthcare that our lawmakers don’t seem to appreciate properly. When you spend more money on something without increasing its supply, the suppliers will realize higher revenues. That’s definitional, tautological. Once you’ve done that the increased revenue is built into the income expectations of the suppliers. That’s what happened with Medicare and Medicaid and that’s what I fear will happen with the healthcare reform bills making their way through the Congress. And Congress has steadfastly refused to bring Medicare or Medicaid spending under control.