Steve Pearlstein wants to have it both ways:
In other words, it's important to get it right this time, and a president nearing the end of his second term who is willing and able to take on the special interests is just the person to lead it. Unfortunately, by framing the debate as an ideological choice between individual control and more government, Bush is setting himself up for another Social Security-like failure...
Government -- in the form of Medicare, Medicaid and insurance coverage for employees and veterans -- already pays half of the nation's health bill. Those are among the most popular government programs, cherished by Republicans and Democrats alike. So to think government won't be heavily involved in health care is an economic and political fantasy.
Moreover, we know that by its nature, health care is a highly imperfect market.
It suffers from tremendous "information asymmetries" between sellers (doctors, hospitals and insurers) and buyers (patients).
It is rife with what economists call "principal-agent problems" -- like the doctor who benefits financially by providing more medical treatment than patients need, or health insurers that are always trying to get them to consume less.
In rural areas, there are often few providers and little or no competition.
And left alone, insurance markets will tend to lower costs for the young and healthy and raise them for the sick and aged -- an outcome that is as socially unacceptable as it is economically efficient. So, please, let's dispense with the free market, personal choice rhetoric. Economically, its inappropriate. Politically, its just stupid. It didn't work with Social Security and -- trust me on this one -- it really won't work with health care.
So he does a fairly solid job laying out the reasons why health care doesn't respond to economic pressures, and why the government should be involved in health insurance. All things progressives agree with. But then he decides he wants to please conservatives as well:
That doesn't mean there aren't ill-advised government policies that need fixing, as Bush suggests, like the malpractice-tort system or the tax-free treatment of employer-provided health insurance.
Someone hasn't gotten the memo on the tort system, and why changing it won't fix anything. But I digress...
Health savings accounts combined with higher-deductible catastrophic insurance -- the centerpiece of the Bush consumer-driven health care push -- are already gaining traction in the marketplace and show some real promise.
So here's the thing. There's definitely an argument to be made about inducing more competition and making the health care system more transparent. But if you spend the first half of your column bemoaning the belief that we don't need government in health care, or that competition and "individual choice" will fix things, it doesn't work very well to turn around and laud HSAs. Especially when you think about the 80/20 rule, or that 20% of Americans use 80% of health care dollars. That 20% will continue blowing their deductible, HSA or no.
And how does he think HSAs are showing promise? The only promise I see is in employer's eagerness to shift costs back to their employees. Health care spending may have slowed in 2004, but that's mostly due to less consumption of brand name prescription drugs and more use of generics -- not because of lowered health care usage across the board caused by HSAs.
It's great to call for universal health insurance. But when Pearlstein first claims that consumer directed reforms will go the way of social security, he's right. And that includes HSAs.
Comments