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- The Forecaster
Last month, I drove down to New York to have dinner with my mother for her birthday. We went to her friend Laura Maioglio’s family restaurant, Barbetta. It’s in the theater district. The place is elegantly decorated with antiques from Piemonte, staffed with friendly and attentive waiters, and serves classic Italian food. At the time of my visit, its website featured a picture of Laura and her husband with Bill and Hilary Clinton, so you can imagine that I felt right at home.
As is often the case when my family gets together, the conversation turned to politics in general and my opinion of the Affordable Care Act, which was being argued in the Supreme Court that week, in particular. The liberal supra-majority at the table supported the act and hoped it would be upheld. It fell to me as the lone conservative to explain my reservations.
Over the gnocchi, my family wanted to know my opinion of the individual mandate. How could I not be for it? After all, it was originally a Republican idea. Health insurance is a market solution to the problem that health-care costs are incurred randomly, are hard to predict and plan for, and, when they do incur, tend to be large. Why not just improve the performance of health insurance by forcing everyone into the pool so that the risk and cost are spread over a larger population that can better afford it? Doing so would also keep much of the cost off the government’s books.
Well, I am wary of central government creating vast, complicated new programs. I prefer a federalist approach that develops government solutions from the bottom up, not the top down, and that uses the states as the testing grounds for new programs.
The Affordable Care Act fills thousands of pages. It’s so lengthy that members of Congress didn’t read it before they passed it and Supreme Court justices didn’t read it before they heard it argued.
In the act and its individual mandate, the federal government exerts control over a lot of very personal decisions. It assumes responsibility for the health-care sector, which by some estimates represents a sixth of our national economy.
I doubt that such a big, new government program will do a better, more efficient job of providing health care than the private sector. In general, I believe that free markets are a better, more efficient way to allocate resources and provide goods and services. The market for health insurance is not free if the government forces consumers to buy insurance, and insurers to cover people they otherwise wouldn’t.
The risk is that we wind up saddled with an expensive program that doesn’t solve the problem. Remember Dirigo Health, Maine’s solution to the health-care problem? It wound up costing more, insuring fewer people, and having a highly problematic funding mechanism. I would like to see more conclusive proof of the ACA’s program’s superiority before we roll it out on a national scale. I don’t think Massachusetts has provided it.
Some at the table were disappointed in President Obama for not fighting harder for a more ambitious program like those in Europe. The Italian constitution makes the state responsible for citizens’ individual health and guarantees care for the indigent. Italy’s national health service provides universal care for citizens as a single payer. My relatives argued that compared to the U.S., it costs less and produces better outcomes in terms such as infant mortality and life expectancy. Isn’t health care a basic human right and how could I not be for such an obviously superior system?
I am skeptical of such claims of vast superiority, and mindful of anecdotes about problems with European national health services: rationing, long waits, and mediocre services. I am also aware that European economies are somewhat stagnant and weighed down with debt incurred to pay for their generous social welfare programs.
More fundamentally, I am not sure that health care is different from other needs and wants, goods and services. I suspect that people are healthier when they provide for themselves as much as they are able. Good health is a function of genetics, the environment we live in, our behavior and habits, and care when we need it.
Of these factors, our behavior and habits have the greatest impact on our health, cost the least, and are largely within our own control. For most people, eating a healthy diet, exercising moderately, and avoiding risky behaviors like smoking, drinking to excess, and driving without a seatbelt will do more to improve health than a lot of expensive doctors and therapies.
On the other hand, there are imperfections in the market for care when we need it. Bodies can be complicated when things go wrong and health care is a technical business that most of us are not qualified to negotiate on our own. Moreover, we are not always rational when we are sick and in need of care. Medicine is an imperfect science. There are few sure cures and what is standard practice today may be discredited quackery tomorrow.
We depend upon experts to advise us, so that we already delegate a certain amount of responsibility from the outset in the market for health care. Beyond that, health-care costs tend to be lumpy and it makes sense to spread and share them over time and amongst people, all of which augers in favor of the ultimate cost spreader and sharer: government.
The problem becomes how to hold down costs and allocate care. What incentive is there to keep costs down when you know that the ultimate deep pocket is footing the bill? Do you want bureaucrats making decisions about who gets what treatment, or would you rather that people make them through the operation of the market for care?
I prefer markets, with government limited to setting and enforcing the ground rules and to providing a safety net.