Uwe Reinhardt and Austin Frakt on Repeal and Replace

by Reihan Salam

Uwe Reinhardt recently said something pleasantly surprising in an interview with The Fiscal Times:

 

The Fiscal Times (TFT): How do you see the health care battle playing out next year, with Republicans in control of the House of Representatives?

Uwe Reinhardt (UR): The House probably will repeal the bill for cosmetic reasons so they can tell their constituency, “We repealed it.” If the Senate went along and repealed it, I think it would be good. Why? Because then you have a clean slate. You could say, “Okay guys, now the show is yours. Tell us what you’re going to do. Here’s a waitress, she’s got kids, she can’t afford insurance. What are you going to do about her?” And I think it would be a healthy thing to see happen.

Reinhardt is suggesting that the right needs to take ownership of “fixing” the U.S. health system, i.e., addressing the tangle of misaligned incentives that exacerbate the natural tendency towards cost growth. And my sense is that reforms like the Patients Choice Act, which “convert the tax exclusion for employer-based coverage into a tax credit for health insurance for all,” represent a far better, far more sustainable approach that PPACA.

TFT: But President Obama would surely veto any repeal of health care reform.

UR: If I were him I wouldn’t. I would say, “All right guys, you have the show. We tried, you do it.” He might or might not do that.

TFT: What if Republicans simply defund health care reform?

UR: Whether that’s smart or not remains to be seen. Their hope is that they can throw sand in the oil of this engine and it grinds to a halt, and then say, “See, we told you this bill wouldn’t work.” But what if for some reason it could happen that the Democrats actually learn how to communicate? And suppose they could persuade people that these are the benefits that you would have had, but [the Republicans] killed it and now let them come up with something else. And what Republicans would come up with would actually be fairly similar — that’s the irony of it. Most of this bill is actually Republican. You can trace back in history and find those proposals made by Republicans.

Reinhardt’s notion that “this bill is actually Republican” is content-free, as his Economix post on the origins of today’s D.R.G. system should make clear. A Republican administration created a system of centrally administered prices. So to the extent PPACA builds on the legacy of centrally administered prices, it is indeed a “Republican bill” in some sense. But of course conservatives have, as a general rule, come to reject centrally administered prices, as I think we can all agree. Even fans of centrally administered prices would generally accept that this is true, at least when it comes to the rhetoric of the right. 

The rest of Reinhardt’s post is fairly familiar. He advocates a tightly-regulated, highly centralized health system, and his only objection to single-payer appears to be that the U.S. political system can’t handle it. (How it can handle PPACA is a mystery.)

But even Reinhardt’s jaundiced take is too much for Austin Frakt, who firmly believes that PPACA is, flaws aside, legislation worth preserving if not celebrating. And so Reinhardt has explained that Republicans are too irresponsible to be trusted on health system reform. He also adds:

 

Finally, although I give journalists my honest assessment that the ACA does not do much if anything to control the growth health care spending – other than developing some tools that might help in that quest – I would not blame the President or his allies on the Hill for it.

This is a fascinating turn, and it has interesting implications.

Instead, I would ask critics who accuse the President of having failed on that score – business executives prominently among them: what would you have the President do?

Note that we could apply the same logic to President Bush and congressional Democrats.

Any attempt to reduce Medicare reimbursements immediately triggers the outcry that the government shifts costs to the private sector – a No No.

This was a debate that we saw during the late 1990s, and it certainly applies to right-of-center efforts to restrict Social Security benefit growth for high-earners.

Any attempt to reduce utilization in the public programs immediately triggers outcries over “rationing,” “killing Granny” and “death panels.” Another No No. The Washington Times carried a lead editorial entitled “Efficiency in health care can be deadly.” To underscore its thesis that cost-effectiveness analysis is a Nazi tool, it had a picture of Adolf Hitler right next to its editorial.

The same arguments have been leveled against most of the right-of-center efforts to improve the cost-effectiveness of public services that I can think, though not always with the colorful imagery. 

Finally, any attempt by government to control prices or utilization in the private sector would trigger immediate outcries over a “government takeover of medicine.”

In a similar vein, all efforts to restrict compensation growth for public sector workers are characterized as an “attack” on public sector workers.

Literally the only thing acceptable to the critics seems to be ever more rationing by income class through very high deductibles and coinsurance.

This, of course, is a straightforward misrepresentation of, for example, the Rivlin-Ryan plan, which explicitly protects the less affluent and those with chronic conditions. “Literally” in this sentence means the opposite of its conventional use, as far as I can tell. 

So I would be the last to criticize the drafter of the ACA for not doing much about controlling health spending. The American people are not ready for it. They’ll experience a few more dire teaching moment before they can debate cost-containment responsibly.

Consider the following sentence.

So I would be the last to criticize the drafter of the 2001 and 2003 tax cuts for not doing much about controlling overall government spending. The American people are not ready for it. They’ll experience a few more dire teaching moment before they can debate cost-containment responsibly.

I think we can all agree that this last sentence would be pretty problematic. I for one would like to spare the American public more “dire teaching moments.” And if the best that can be said for PPACA is that it represents more dire teaching moments to come, I guess I’d respectfully say, “No thanks.” 

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.