Thursday, March 16, 2017

David Frum on Conservatives and Health Care

As a Canadian, David Frum does not share American conservatives' horror at a government-run health care system. So gazing at the political landscape and figuring that Paul Ryan's plan is unlikely to pass, he suggests it is time for Republicans to move to a truly universal system.
No wonder that Republican governors and senators, who must answer to state-wide electorates, sound increasingly queasy when they talk about ACA repeal and its Ryancare replacement. Those skeptics’ criticism seems increasingly based on the political risk of withdrawing coverage from those who have relied on it—and of course the House plan will withdraw coverage from millions. As they reject that risk as too hazardous, Republicans take the belated final steps on the road to universality.

And it is high time—past time!—they did so. Republicans have had too many competing goals in health-care reform. They have wanted to lower costs (to free fiscal room for tax cuts and military spending), but also to avoid tangling with entrenched health-care interests, which have decisively favored Republicans in recent years. Post-Obamacare, as before, the United States remains an outlier among advanced nations both in its absolute spending on health care and in that spending’s rate of growth. Even looking only at government expenditures, the U.S. spends a larger share of income on health care than Switzerland and Canada. That money does not buy better outcomes: if anything U.S. health-care outcomes are deteriorating.

What that money has bought is a huge and costly health sector. In 2015, Forbes rated heath technology as the single most profitable industry group in the nation, featuring a fat 21 percent margin. Loath to tangle with providers, Republicans have fixed their hopes for cost reduction on customers. “Patient-centered medicine” sought to transform the user of health-care services as the system’s decisive cost-controller. Confronted with the full cost of medicine, the patient would consume care more prudently—or forgo it altogether.

That hope is listing badly. When and if it finally sinks, Republicans may notice something else. The other advanced countries with universal coverage manage to buy significantly better outcomes at the expense of 11 or 12 percent of GDP instead of America’s 16 percent. That extra increment of GDP could pay for a lot of military spending and a lot of tax cuts. Once politics has eliminated coverage reduction as a means of forcing economy, other possibilities open before a center-right party—and indeed have opened for center-right parties across the rest of the English-speaking world. Perversely, the effort to keep government out of health care has empowered health care to consume more and more government dollars. Where government has been deployed more effectively than in the United States, health care has consumed less.

The long battle to repeal Obamacare has diverted American conservatives from their true heath-care work. The sputtering out of that battle in a completely self-inflicted failure may at last free Republicans from a doomed endeavor and liberate them to undertake the work that the country most needs from them: protecting productive enterprise and military spending from the undisciplined voracity of a health-care industry that takes too much and delivers too little.
In the short term switching to a universal system will not cut costs much, because a big part of higher American costs is higher salaries paid to health care workers, and they are not going to accept a 30% cut in their salaries. But over the long run costs could be held down in the same way that other countries do. Could Trump outflank Obamacare on the left? It would be a bold move but I don't see it happening. Still, one longtime trump friend, Newsmax CEO Christopher Ruddy, recent wrote an op-ed arguing for a "Medicaid for everybody" solution. So who knows.

1 comment:

leif said...

removing up to $34,000 a year in malpractice insurance (presumably the state-run universal HC system would pay out on suits), should help medical professionals ease into a 30% reduction in pay. furthermore, the stranglehold that clinics and hospitals have on doctors' pay (how many are in private practice any more?... there's a reason for that) would be eliminated.