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Robb: What ails us

Misinformation serves as placebo rather than actually curing our health care system

The Senate Finance Committee held a hearing Tuesday on overhauling the heath care system. Among those testifying was Steven Wojcik (left), vice president of public policy for National Business Group Health.

The Senate Finance Committee held a hearing Tuesday on overhauling the heath care system. Among those testifying was Steven Wojcik (left), vice president of public policy for National Business Group Health.

The country is about to have a very frustrating debate over health care, characterized more by misdirection than an honest discussion of the alternatives.

A good illustration was provided by the Monday confab at the White House, in which health care executives committed to reduce expenditures by $2 trillion over the next decade.

Or did they?

President Obama, in his remarks, said that they did: “They are pledging to cut the rate of growth of national health care spending by 1.5 percentage points each year – an amount that’s equal to over $2 trillion.”

The actual letter signed by the executives, however, says something importantly different:

“We will do our part to achieve your administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate – saving $2 trillion or more.”

“Our part” is much different, and far more ambiguous, than “we will do the whole thing.”

This is best seen as collusion by the health care industry and the Obama administration to misdirect the American people.

In the first place, what health care expenditures will be over the next 10 years is unknowable. So, the “pledge” is written on water.

More importantly, the commitment was made by trade associations that don’t actually deliver health care. What happens on the ground with health care costs is unaffected by press events held by politicians and lobbyists.

Most important, what happens on the ground already provides incentives for true economies. There are serious distortions in the health care marketplace, but market share can still be gained by reducing costs and prices.

The real significance of the press event wasn’t the phony pledge of cost savings. The event signaled the political capitulation of the health care industry. They will now accept whatever role in the health care system the politicians assign them.

The more substantive event that happened that day was the release of an “options” paper for health care reform by Senate Finance Chairman Max Baucus and Ranking Member Chuck Grassley.

But, again, “options” is a misnomer. This paper doesn’t really spell out fundamentally different approaches. Instead, the choices are all a variation on a single theme: a government-managed system of private health insurance.

Existing plans would be grandfathered in. But all future health insurance would have to be purchased through a government exchange.

The government would decide the benefit options insurers could offer, and insurers would have to offer all options. Pricing would be strictly circumscribed. Medical underwriting would be prohibited.

The fight over whether there would be a “public option,” a health plan actually administered by the government, is misplaced. If government controls the benefits and pricing of private plans, politicians and bureaucrats are in charge irrespective of whether there is a formal public plan.

The political need for action is driven by the uncertainty over coverage in the American system. The gaps in coverage are hugely worrisome even for those who currently have good insurance.

This uncertainty, however, is easily eliminated at no cost to the taxpayers. There already is a national health care plan, Medicaid for the low income. Universal access could be provided simply by allowing any legal resident to buy into Medicaid at the government’s cost.

The system as a whole, however, makes no sense. Obtaining health insurance through your employer is an artifact of World War II wage and price controls.

Some Republicans want to eliminate this dependence and stimulate a market for individual health insurance. That makes more sense, but the public is unlikely to be comfortable with such a radical restructuring without a government backstop, such as the ability to buy into Medicaid.

This debate will be sad and frustrating.

And the end result will probably be neither fish nor fowl – a system that provides neither the certainty and security of a European-style national health care system, nor the choice and freedom of a vigorous individual health insurance market.

Robert Robb, an Arizona Republic columnist, writes about public policy and politics in Arizona. E-mail: robert.robb@arizonarepublic.com

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