The Corner

The Health Care Pivot Point

Obama has done a masterful job of maneuvering into a position to placate the Left, cultivate the Right, and promise immediate, energetic action to the Center. For conservatives, there are opportunities and challenges. Probably the most pressing example of the latter is Obama’s health-care gambit.

Obama, Tom Daschle, and others are selling the concept of health-care reform as an element of the economic-stimulus package. They won’t try a huge expansion of government-run health insurance right off the bat, but intervening steps will be portrayed as creating jobs, not just in the medical field proper but also in IT, construction, and the private economy as a whole as health costs moderate.

If you’re wondering how health reforms can both create jobs in health care (by increasing expenditures) and in the private economy (by reducing expenditures), you’re not alone. The Heritage Foundation’s Robert Book has a new paper out on the subject:

The entire proposal rests on the assumption that one can get a “free lunch” by looking at only one side of the ledger–by counting the benefits of reform but ignoring the costs. Health care jobs are clearly a benefit to workers who would otherwise have worse jobs or no jobs at all, but as long as employees need to be paid, one person’s job is also another’s cost. Artificially increasing the number of health care jobs also artificially (and wastefully) increases health care costs. On the other hand, reducing total health care spending means there is someone who would otherwise be paid who is either no longer being paid or being paid less–and that person is losing a job or taking a pay cut. Spending money on health care might create jobs in the health care industry but only at the cost of jobs destroyed elsewhere in the economy. In other words, health care reform might reduce health care costs, or it might create new health care jobs, but it cannot do both simultaneously.

This is a battle that conservatives need to prepare for immediately. Michael Tanner of the Cato Institute offers one approach to head off precipitious action: emphasize what American would lose from any health reforms that transfer authority to Washington and squeeze out private action. For example:

You could lose the power for you and your doctor to decide what treatment you will receive. Tom Daschle, the incoming Secretary of Health and Human Services, who is expected to lead President Obama’s drive for national health care, has called for the creation of a Federal Health Board with the power to determine what treatments and procedures are “cost-effective.”

These standards would be imposed on programs directly funded by the federal government initially, but could be extended to private insurance in the future. He acknowledges that “[d]octors and patients might resent any encroachment on their ability to choose certain treatments even if they are expensive or ineffectual compared to alternatives.” No matter — government knows best.

And as the Ethics & Public Policy Center’s Peter Wehner and Rep. Paul Ryan recently observed, the danger is that the kinds of federal reforms that the Obama administration appears to be pursuing would create a pivot point for advocates of big government in general. Conservatives must respond by articulating a positive health-care agenda that would point us in the other direction:

Tax credits, high-risk pools, insurance choice and regulatory reform can form the basis of a transformation from today’s enormously costly and inefficient third-party system into one driven by ownership, choice and competition. And at the nucleus of this redesigned system will be the patient-doctor relationship.

If we hope to succeed in making our case, it will require a concerted education campaign that relies on hard data and facts, rigorous and accessible public arguments, and persuasive public advocates.

This is quite a tall order. But if we do not succeed in resisting greater state involvement in the economy — and health care is meant to be the beachhead of this effort — we will move from a limited welfare state into a full-blown one. This will reshape, in deep and enduring ways, our nation’s historic sensibilities. It will lead here, as it has elsewhere, to passivity and dependence on the state. Such habits, once acquired, are hard to shake.

John Hood is a syndicated columnist and the president of the John William Pope Foundation, a North Carolina–based grantmaker.

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