Tuesday, January 26, 2010 | |

TANSTAAFL

Most pundits are arguing that ObamaCare was derailed last week by the election of a Republican to replace Ted Kennedy. For reasons discussed in my recent posts to this blog, I believe that health reform was well on the way toward collapse under its own weight. The voters of Massachusetts only provided the straw that broke the camel’s back. Focusing too narrowly on Massachusetts’ role in the Democrat’s loss of their 60th Senator runs the risk of missing a lesson that must be learned by any political leaders who resurrect health reform in the future.

Commentators are building quite a list of factors that presumably explain the special election’s results and foretell its implications. Most of their insights are valid because health reform had a lot going against it. However, the cancer that was likely to kill reform, without help from Massachusetts, was its evolving complexity and resulting costs. Given the precarious 60th vote, Democratic leaders kept expanding the scope of reforms to solidify the support of wavering Democrats. The net result was a Rube Goldberg of special concessions built on a cumulative foundation of uncoordinated provisions.

The emerging legislation was anything but a coherent package of reforms that could be understood by a growing number of voters, including a majority of Democrats by the time Scott Brown stepped on to the national stage. Public support for reform was falling fast as voters perceived the price to be paid for “affordable” coverage was an unpleasant combination of rising taxes and reduced benefits. Political leaders seemed to assume that voters would forget a fundamental principle of economics—TANSTAAFL. (“There ain’t no such thing as a free lunch.”) Well, voters weren’t forgetting it.

The more politicians put on the plate, fewer people wanted to sit at the table because they knew there would be a big bill to pay, not to mention smaller individual portions once the resulting lunch was served to everyone. Paying more for less just didn’t make sense. Neither did the premise that insurance companies could be forced to provide more coverage without raising rates. Most voters understand the laws of economics, especially in a sick economy.

We’re back to where we started a year ago when everyone agreed that rising expenditures on health care were unsustainable—indeed, were a major cause of the economy’s ills. How can we stop the growth in spending on health care without wasting another year on reforms that most Americans won’t buy? I vote for promoting accountable partnerships of providers, payers, and purchasers to cut waste out of the system. Rather than putting more on the plate and increasing the bill, let’s create a healthier lunch for the amount that we are already paying. What would you do?

2 comments:

raul said...

Three questions - two about the political environment and one more specific to HSAs:

1) Given the pressure Dems feel to pass a HC bill in the near term - is there maneuvering room in Congress to shift the current focus of the bill from accessibility to cost reduction and recover with a bi-partisan bill?

2) Do you feel the opportunity for the opposition to leverage the Massachussetts reaction/rejection for mid-term political advantage will lead to another period of stalemate instead of a resurrected, bipartisan bill even if Dems were to move sharply to the center?

3) How do you see HSA plans being impacted by HC regulatory reform and cost reduction efforts?

Jeffrey C. (Jeff) Bauer said...

Raul raises good questions. 1) I perceive that the pressure to pass a bill has weakened considerably. Reading the tea leaves of the Massachusetts special election, several Democrats are probably lobbying behind the scenes not to pass a bill this year. In addition, the economic issues have become so important that many Democrats probably feel they do not have any more time to devote to health reform legislation. I'll be really surprised in a reform bill goes further. 2) Your guess is as good as mine, but I would not expect bipartisanship to emerge 9 months before mid-term elections that many Republicans suddenly think they can win. 3) Although HSA plans have been addressed in various versions of bills over the past year, I do not expect to see them changed significantly once the dust has settled. HSAs are getting established, with a constituency that will defend them.