Friday, October 09, 2009

Brooks v. Brooks on the Baucus bill

David Brooks continues to write nonsense about health care.

Professing ambivalence about the Baucus bill, he complains in one breath that it "will retard innovation by using monopoly power to squeeze costs." Two paragraphs later, lauding the bill's "many provisions to make government-run health care more rational," he includes that it "would create a commission to perpetually squeeze costs," also cataloging specific measures favored by health care experts -- bundling payments, encouraging doctors to work in teams, improving IT, measuring comparative effectiveness. He acknowledges that savings from these measures "could be significant."

As for that free market shibboleth that cost controls are always bad: in health care, virtually every industrialized nation has found them necessary. Is Brooks aware that in France, Germany and Japan, three countries that get better health outcomes than the U.S. at half to two-thirds the cost, the central government sets prices for every medical procedure performed in the country, and all insurers are required to pay all bills submitted under that schedule by all providers? That those countries provide universal comprehensive coverage at minimal cost to their citizens? That the fee schedules are completely transparent, posted on doctor's office walls in France, available in a phone book-sized reference in Japan? (For a doctor's- and patient's eye view of these systems, see T.R. Reid's The Healing of America.)

The only "innovation" squeezed by governmental cost controls is the innovation of insurers, ingeniously determining how not to cover procedures or how to wring out maximum premiums by charging different rates for different levels of coverage.

Yes, health care providers in all three countries feel squeezed by government cost controls. Yes, they make much less than doctors in the U.S. They also come out of medical school with zero debt, pay pennies by US standards for malpractice insurance, and spend almost no time or money on administrative costs -- in contrast to American doctors, who have to employ whole staffs to deal with the byzantine billing and claims approval processes of multiple insurers.

Brooks also claims that the Baucus bill (or any set of subsidy levels for people purchasing insurance on exchanges) "will impose huge costs on people as they rise up the income ladder, distorting the whole economy."

Subsidies keyed to income are only relevant to those who do not get insurance from their employer, including the self-employed. Right now, such people suffer "huge costs" indeed -- buying individual insurance on the open market with no subsidy. For many, a rising income will be the result of better employment, which likely means employer-provided health care. For the self-employed or those who work long-term in workplaces that don't provide insurance, it seems perverse to complain that reducing subsidies as their income increases is an imposition of "huge costs."

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