THE TREATMENT AUGUST 28, 2009
My friend Mickey Kaus has a rejoinder to my latest column, in which I suggest that the emphasis on cost-cutting--while most likely a strategic mistake--was nevertheless easy to understand in retrospect. Among other things, he suggests, some people did predict this. Like, for example, Mickey.
Well, he's absolutely right about that. He was a critic of this argument as far back as April:
Isn't it an epic mistake to try to sell Democratic health care reform on this basis? Possible sales pitch: "Our plan will deny you unnecessary treatments!" Or maybe just "Republicans say 'yes.' Democrats say 'no'!"
Mickey deserves credit for ancitipating this. But that's a testimony to Mickey's political instincts, I think. My broader point was that the pundits in general--and, again, I'd include myself here--lacked such foresight.
Mickey also takes issue with my argument that curbing health care spending is a good idea, because money spent on health care is money not spent on other things. I had mentioned public housing, provoking this response:
"Public housing"! Now there's a government expenditure with a good track record. By all means, let's spend less money treating sickness and disease and more money on the beloved public housing program. ... Suggested bumper sticker: "Less Healing, More HUD!" ... I mean, how could these guys be losing the debate?
OK, public housing was perhaps not the smartest government rogram for me to single out (although I remain a fan of housing vouchers and recent efforts at mixed-income public housing). I still think the general point stands. Rising health care costs are a major reason take-home pay for lower- and middle-income workers have been growing so slugglishly. And if the projections are even close to right, they're going to impose a huge drain on the federal budget in the coming decades, requiring either vary large tax increases, deep cuts elsewhere, or debt levels that are truly worrisome.
Now, I could happily live with that situation--naturally, I'd opt for the higher taxes--if the money were actually buying good health care. I don't think it is. I didn't used to put much stock in that argument, but, as I wrote, the evidence on it is simply overwhelming. Even if you think the critics of high spending, like the scholars at Dartmouth, are only one-third correct, we're wasting a ton of money.
How you go about reducing that spending is, I readily concede, a complicated and difficult question. Do it clumsily or hastily and you end up whacking a lot of the good care with the bad. The virtue of the approach Obama has outlined is that it seeks to put pressure on costs carefully and gradually. Basically, it involves trying a bunch of different reforms, somewhat gingerly, and seeing which ones work. This, by the way, is why the Congressional Budget Office has been skeptical; they won't score savings if reform doesn't push for change more aggressively.
Note that a chief proponent of this strategy is Harvard economist David Cutler, an Obama campaign adviser probably best known for arguing, somewhat controversially, that high health care spending frequently does pay off. In other words, he'd be one of the last people (at least among respectable health economists) to argue for cost control if he didn't think it could be done without eliminating worthwhile treatments.
But, of course, that's hard to say on a bumper sticker--which is why, as I say, Mickey was probably right on the politics. But I do think he could give the argument more credit on substantive grounds. For more on this, I'd recommend Mike Grunwald's recent article in Time. He's even more gung-ho on the cost argument than I am, as policy and as politics.