I recently wrote an article on the politics of health care for Time. Over at his Time-affiliated blog, Justin Fox makes a number of criticisms of it.
First, he points out that “Ramesh Ponnuru is not a health-care economist.” This is true, but perhaps not devastating.
[H]ealth care markets don’t work like the markets of economics textbooks . . . . because health care purchasers are at a huge informational disadvantage relative to health care providers. . . . [G]overnment bureaucrats with some training in public health actually can make better decisions about how to allocate health care resources than lots of individuals choosing for themselves.
I don’t find the lack of information argument terribly persuasive. Consumers typically have less information than producers and vendors, even in well-functioning markets. When markets are structured to respond to consumers, intermediary institutions often arise to provide them with better information. Fox thinks we can’t have free markets because we don’t have enough information, but it may be that we don’t have enough information because we don’t have free markets. I also think he has too much faith in government bureaucrats. (Note, for example, that “can make better decisions” does not mean “would make better decisions.”)
Third, Fox writes that “hardly anybody in the U.S. wants the kind of health care system that Ponnuru advocates.” He therefore assumes that Republicans will drop these health-care proposals once the primaries are over. I think he is underestimating the potential political appeal of free-market health care. Last week, the Wall Street Journal reported on a poll commissioned by it and NBC: “By 49%-40%, Americans back conservative health-care solutions of tax credits and health-savings accounts over government coverage mandate backed by subsidies for the poor.”
Fourth, he points out that there are liberals and Democrats who want to move away from an employer-based health-care system. That’s true. But the leading Republican presidential candidates are much more eager to do that than the leading Democratic presidential candidates, which I think is a reflection of the political consensuses in their parties.