The conclusion to be drawn from President Obama’s health care summit was unsurprising but still unfortunate. It is clear that there will be no support—zero, zilch, nada-- for the Senate version of the health care bill from Republicans. The plain truth is the Republicans are not willing to compromise on anything in the bill because the bill itself, they contend, simply calls for far too much government involvement in the health care market through mandates, regulation, and taxes. What they consistently fail to recognize is that much of the government involvement is there to counteract what economists call market failures, which most notably for health care are adverse selection and moral hazard. The individual mandates, the employer mandates, and even the Cadillac “tax” are all components that are aimed at mitigating the impacts of those market failures.
They complain that the bill does not go far enough to control health care costs and yet were adamantly opposed to the now defunct public option that would have been fairly effective in moving toward the goal of “bending” the health care cost curve. Instead, they continuously tout the virtues of malpractice reform and allowing consumers to purchase health insurance across state lines. The latter is unlikely to have any impact on health care costs while generating administrative nightmares and the former, though desirable, would have only a small impact on overall health care costs.
I’ll close this post with two final points. First, as I discussed in my first post on this matter, to rely primarily on the market to provide a good or service that is deemed to be a fundamental human right is absolute folly. Second, please take a look around the world at other industrialized countries whose citizens are as healthy or healthier than we are and who spend half as much of their GDPs on health care. All of their health care sectors are characterized by extensive government involvement, either through the sole public provision of health care, through both public and private provision, or through private provision coupled with strict and extensive government regulation. An efficient health care sector that provides adequate and affordable health care to all of its citizens is not possible without substantial government involvement. And anyone or any party that says it is, is engaging in obfuscation or is just delusional.