The Corner

Ruffini, Klein, and Conservative Beliefs about Health Care

This post from Patrick Ruffini is getting some attention on the Left, particularly the line, “On health care, I have no idea what our basic guiding principle is. Seriously, I don’t.”

He continues:

We have tried ineffectively to stretch free market rhetoric to health care without appreciating that health care is already too far removed from a free market for the analogy to make sense. Real markets are sensitive to price. Health care isn’t. The insurance companies hide the cost of actual care from the consumer. 

What we have lacked in this debate is a simple clarion call to address an aching need — bringing free market principles to bear to improve tangible health outcomes.

Maybe Patrick missed it because the strongest single example of what he claims we lacked didn’t come from a conservative. The clarion call came from David Goldhill,* a Democrat and CEO of the Game Show Network, in his simultaneously praised and ignored article for The Atlantic, “How American Health Care Killed My Father.

I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy. [Emphasis added.]

Yes, yes, yes, and yes. If you want one single statement summing up what conservatives’ guiding principles on health care should be, that is it. And if you want to know why most conservatives that I know hated this bill, let me explain: It expands, rather than reduces, the role of insurance; widens the government’s role to include things that the government shouldn’t be doing (subsidizing the middle class, over-regulating the insurance industry, taxing the most innovative sectors of the health-care economy, spreading dependency); deepens our addition to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and reduces the role of the consumer as guarantor of good service, reasonable prices, and sensible trade-offs.  

In a post linking to Patrick’s piece, Ezra Klein — seeking once again to make the case that conservatives would actually like this bill if it weren’t more important to hand Obama a political defeat — argued that:

The [Affordable Care Act] insists on competitive, private insurance markets as the building block of a better health-care system. It begins to end the tax break for employer-sponsored insurance, a longtime conservative bete noire. It includes an individual mandate, which was once a conservative idea that promoted individual responsibility. But though Democrats have largely adopted these conservative ideas, conservatives have not declared victory and gotten to work on implementation. Instead, they’ve abandoned the ideas.

Taking those points one at a time:

1. The collapse of Fannie Mae and Freddie Mac was, or should have been, a pivotal moment in our understanding of the dangers involved in tasking private enterprises with public goals. You’ve got a bunch of guys making a lot of money overseen by a bunch of guys who need to raise a lot of money every two years. Gee, who’s going to win that fight? Inevitably, the private enterprises capture their regulators, line their pockets, and then take advantage of their semi-protected status to do something awful, at which point the government is more or less forced to take over the entire activity. Ironically, every one of these episodes serves as an opportunity for the Left to denounce the free market. Thanks for offering to use “private insurance markets as the building block of a better health-care system,” but I’ll take my socialism straight up; it’s cheaper in the long run and robs the Left of an opportunity to blame its problems on capitalists.

2. “It begins to end ….” Given the fact that House Democrats were ready to sacrifice the entire bill over this issue, I apologize for doubting that Congress will be any more enthusiastic about taxing employer benefits in 2018 than it is now. But yes, theoretically this is a good idea.

3. “It includes an individual mandate….” I’ve got this funny belief about personal responsibility — I believe it only exists in the absence of laws compelling responsible action.

I will not deny that, as Ezra points out, some conservatives and Republicans embraced these ideas at various points in the past. But as I wrote yesterday, I think they were wrong. It could be that Ezra is right that some of these figures have abandoned these ideas for crass political reasons. If so, I think that’s good. I like that the Republican party has committed itself to a different direction on health care — a direction that more closely aligns with the principles David Goldhill laid out in his piece. And I don’t really care how the party got there.

* For more Goldhill, check out this Cato weekly video or revisit this WSJ op-ed from February, co-authored with Havard dean of medicine Jeffrey Flier, which concluded that “the highly regulated approach of the plans that have advanced in Congress is unlikely to work.”

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