Thursday, October 01, 2009

Attention, Clive Crook: "uncertainty" is an antidote to "unintended consequences"

Clive Crook objects to the "uncertainty" that the public option injects into the health care reform debate. He also warns against unintended consequences. What he fails to recognize is that an element of uncertainty -- an "option" that may evolve in more than one direction -- is a way of coping with unintended consequences.

Below, Crook gets his "if...then" exactly backwards:

Democrats have been debating whether a "strong" public option should pay Medicare reimbursement rates, something an ordinary competitor could not do. If it did, this would drive down costs and have many other (not necessarily intended) consequences. It would be a big step towards Medicare for all. As I have argued before, there are worse things than Medicare for all, including in my view the present system. But this outcome is one of the things that the administration is saying it does not want. If you want Medicare for all, do what some Democrats do and make the case. If you don't, stop proposing a public option that would push the system towards it.

Politically, the problem with the public option is that it has added to the uncertainty, and hence the anxiety, that surrounds this reform. People want to know where all this is heading. The public option might be nothing, or it might be everything, depending on how it is done. But when advocates like Dionne say that it can be both everything and nothing at the same time, according to your preferences, then centrist voters are right to say, "No thanks."
Possible outcomes to creating a public option might be sorted into three categories: a) it has no great effect, becoming one health care 'option' for a limited percentage of the population; 2) it coexists in robust competition with private health care plans, as (to cite Obama's analogy) public universities do with private ones; or c) it proves a superior choice and causes private insurance to wither on the vine.

None of these outcomes is undesirable, unless a) transpires because the public option is neutered from the start and hence is never a viable option. Instituting a public option should either make private insurance better or prove it to be parasitical. It's a way of creating competition, not a prejudgment of the competitive outcome. "Uncertainty" is good. It's a condition of competition.

As for those lawmakers who would prefer "Medicare for all," i.e. a Canadian system, the public option is a rational -- not disingenuous -- way to get there. There's no virtue in ignoring political reality by pushing for a single payer system in the U.S. now. If the public option gets us there, it will do so in a prudent, incremental way, by earning its stripes as the best service offered. If the public option is a Trojan Horse, it's got to be one that runs, i.e., defeats the competition. If paying Medicare rates hurts quality, private plans ought to be able to differentiate themselves by paying higher rates, thereby presumably attracting better doctors.

Obama likes mechanisms that set the conditions for incremental, adjust-as-you-go change. That's how he's cast "MedPAC on steroids." A robust public option should be in that category.

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