A 'Fix' We'll Likely Regret
WASHINGTON – “In the beginning,” says a character in a Peter De Vries novel, “the earth was without form and void. Why didn’t they leave well enough alone?” When Washington is finished improving health care, Americans may be asking the same thing. Certainly the debate will compel them to think more clearly about this subject.
Most Americans do want different health care: They want 2009 medicine at 1960 prices. Americans spent much less on health care in 1960 (5 percent of GDP as opposed to 18 percent now). They also spent much less – nothing, in fact – on computers, cell phones and cable and satellite television.
Your next car can cost less if you forgo GPS, satellite radio, antilock brakes, power steering, power windows and air conditioning. You can shop for such a car at your local Studebaker, Hudson, Nash, Packard and DeSoto dealers.
The president says his health plan is responsive “to all those families who now spend more on health care than housing or food.” Well. The Hudson Institute’s Betsy McCaughey, writing in The American Spectator, says that in 1960 the average American household spent 53 percent of its disposable income on food, housing, energy and health care. Today the portion of income consumed by those four has barely changed – 55 percent. But the health care component has increased while the other three combined have decreased. This is partly because as societies become richer, they spend more on health care – and symphonies, universities, museums, etc.
It is also because health care is increasingly competent. When the first baby boomers, whose aging is driving health care spending, were born in 1946, many American hospitals’ principal expense was clean linen. This was long before MRIs, CAT scans and the rest of the diagnostic and therapeutic arsenal that modern medicine deploys.
In a survey released in April by NPR, the Kaiser Family Foundation and Harvard, only 6 percent of Americans said they were willing to spend more than $200 a month on health care, and the price must fall to $100 a month before a majority are willing to pay it. But according to Grace-Marie Turner of the Galen Institute, Americans already are paying an average of $400 a month.
Most Americans do not know this because the cost of their care is hidden. Only 9 percent buy health coverage individually, and $84 of every $100 spent on health care is spent by someone (an employer, insurance company or government) other than recipients of the care. Those who get insurance as untaxed compensation from employers have no occasion to compute or confront the size of that benefit. But it is part of the price their employers pay for their work.
The president says the health care market “has not worked perfectly.” Indeed. Only God, supposedly, and Wrigley Field, actually, are perfect. Anyway, given the heavy presence of government dollars (46 percent of health care dollars) and regulations, the market, such as it is, is hardly free to work.
As market enthusiasts, conservatives should stop warning that the president’s reforms will result in health care “rationing.” Every product, from a jelly doughnut to a jumbo jet, is rationed – by price or by politics. The conservative’s task is to explain why price is preferable. The answer is that prices produce a rational allocation of scarce resources.
Regarding reform, conservatives are accused of being a party of “no.” Fine. That is an indispensable word in politics because most new ideas are false and mischievous. Furthermore, the First Amendment’s lovely first five words (“Congress shall make no law”) set the negative tone of the Bill of Rights, which is a list of government behaviors, from establishing religion to conducting unreasonable searches, to which the Constitution says: No.
The president may have been too clever when he decided, during an economic crisis that was sending federal expenditures soaring and revenues plummeting, to push the entire liberal agenda on the premise that every item on it is essential to combating the crisis.
Now the health care debate is coming to a boil just as public anxiety about the deficit is, too. As cost estimates pass the $1 trillion mark, the administration is reduced to talking about financing its reforms with mini-measures such as a 3 cent tax on sugary sodas. The public, its attention riveted by the fiscal train wreck of trillion-dollar deficits for the foreseeable future, may be coming to the conclusion that we should leave bad enough alone.
© 2009, Washington Post Writers Group