4. Price transparency (mandated if need be) and real competition in the health care sector, including freer immigration for doctors, nurses, and other caregivers, and relaxation of medical licensing and encouragement of retail medical clinics, a’la WalMart style. This helps keep the cost of the mandate to reasonable levels. Most cost-saving innovation should come through markets. The man strapped to a gurney, bleeding, while negotiating a price with his doctor is the exception in this sector, not the rule. In any case the insurance companies can prearrange the price for that one.There's the nugget about how it's rare that someone has to negotiate the price and extent of their treatment while strapped to a gurney and bleeding. (Right. Because if you're negotiating the price and extent of your treatment when you have a diagnosis of accute myeloid leukemia, you're in a much stronger bargaining position than that poor bleeding sap down the hall strapped to a gurney.) And the touching faith in "price transparency," because yes, if I knew ahead of time how much it was going to cost me to be treated for Alzheimer's, I'd make sure not to get that disease.
But from my "inside baseball" perspective, neither of those wins the prize. The best piece of Tyler's point 4 is that "Most cost-saving innovation should come through markets."
Think about that. Rather than saying, "We should use markets because they give us good stuff," he seems to be saying, "We should get our good stuff from markets." But what if it turns out that (competent) government can actually produces a bunch of meaningful cost-saving innovation? Why is Tyler prefering a particular structure rather than a particular kind of result?
Now, there's a charitable reading of this, if we read it in what might be called its "positive" sense, a claim about fact: "I think that most cost-saving innovation will come through markets." You can disagree with that claim, but it doesn't strike me as crazy on its face. But he goes right from that sentence to the one about the bleeding dude strapped to the gurney. That poor guy is the classic argument against markets in health care: "You can't bargain for your health care when you're strapped to a gurney, bleeding!" Tyler wants us to know that those cases are rare--"the exception in this sector, not the rule"--which means that the most easily dramatized problem with market-based health care isn't actually that big a problem, which means that he can stick with his "normative" statement, a statement about his preference that we get our good stuff from markets. Because if we started to get good stuff from government, oh, there'd be no end to the mischief.
But of course you can't link to this post without this:
2. A rejection of health care egalitarianism, namely a recognition that the wealthy will purchase more and better health care than the poor. Trying to equalize health care consumption hurts the poor, since most feasible policies to do this take away cash from the poor, either directly or through the operation of tax incidence. We need to accept the principle that sometimes poor people will die just because they are poor. Some of you don’t like the sound of that, but we already let the wealthy enjoy all sorts of other goods — most importantly status — which lengthen their lives and which the poor enjoy to a much lesser degree. We shouldn’t screw up our health care institutions by being determined to fight inegalitarian principles for one very select set of factors which determine health care outcomes.Obviously, there's that lightning rod, the line about how "We need to accept the principle that sometimes poor people will die just because they are poor." There's a charitable reading of this statement, as some commenters have pointed out. Any insurance system, whether private, state-run, or some hybrid, is going to have to decide which treatments to pay for and which not. If two people both want a treatment that's not covered, the poorer person is less likely to get it. If it turns out that the treatment was life-saving, then the poorer person will in some sense have died because they were poorer. So I can construct a scenario in which his statement isn't monstrously callous. I could do that, but I'm not sure that that would really be a fair reading.
First, there's the straw-man problem (as has also been pointed out elsewhere). The Affordable Care Act does not equalize access to health care or the treatment itself. Systems in various other countries with actual universal insurance also do not equalize treatment. I think I've heard people advocate something like egalitarian health care (i.e., Nobody can have better or more extensive care than anyone else with the same condition), but it's not a common position, and it certainly wasn't the sticking point in the ... "debate" over the ACA. The way Tyler phrases this noble "rejection of health care egalitarianism," it's as if he sees a crazed horde of liberals weilding NPR tote bags and shouting, "Give me health care egalitarianism or give me ... well, death!" As if there would have been an outpouring of Republican and Blue Dog support for Obama's bill, if not for those uncompromising health-care egalitarianists. It's just delusional.
The point is not to equalize access to health care. It's to put a better floor under the poor (and the middle class!). There are lots of ways to do that. I don't think the current hyperventilating about the end of Liberty (TM) in America is because Obama went about it the wrong way. (Actually, in some respects, I think he did go about it the wrong way, but I don't know how much of that was political calculation--whether or not the calculation was correct--and how much was Obama's actual conservative policy preferences or dancing with those that brung him, but I still think the law was an improvement over the status quo.) No, the hyperventilating isn't because Obama built the floor the wrong way. The hyperventilating is because a lot of people have convinced themselves that a better floor is itself a bad idea.
It's also worth noting that variations on the program Tyler says the right "should" support have been around for a while. Just as one example, I've sometimes assigned the book True Security, by Michael Graetz and Jerry Mashaw, from 1999. The centerpiece of their health proposal is a minimum package of catastrophic care: You pay your premium, then you pay out of pocket for the first, say, $1,500 dollars of medical expenses in a year [these are the numbers they worked up for an individual in 1999; multi-person households are different, and the specifics for both would presumably be different today]; then you pay 20% of the next $5,000 (so you might pay another $1,000); and for expenses above that, you pay nothing.
They frame their goal not in terms of access to health care, but in terms of income protection, which has two components. First, they don't want health costs to drive anyone below some agreed standard of decency, which in principle can be defined in terms of a multiple of the poverty line. Second, they don't want health costs to hit anyone's income by more than 15% in a year. If you combine those two principles, you can work out what sort of subsidy a household gets. At the lower end of the spectrum, an individual or a household would have all their costs reimbursed--both the insurance premium and the out-of-pocket costs for actual care. At the upper end of the spectrum, individuals and households would get no reimbursement, because the combined premium and out-of-pocket expenses wouldn't drive their income down by 15%. In between, a sliding scale assures that the authors' two principles of income-protection are observed.
There's a lot to be said for this policy. By the authors' calculations at the time, it would achieve universal coverage, while not increasing government expenditure on health care over the status quo. Like Tyler's dream list, it would replace Medicare and Medicaid. But I like it better than Tyler's because of the understanding that the problem of health-care costs isn't just that they can make you poor (although that's a huge part of it), but that they can make you significantly poorer than you were.
If someone were to run on Graetz and Mashaw's plan, and if I believed them, and if they weren't carrying too much baggage of craziness or sociopathy, I'd vote for them. And if the policy were implemented, you know what would happen? It would be a whole lot rarer for people to die just because they were poor.