June 21, 2012

THE CONSERVATIVE MANDATE IS PRETTY SIMPLE...:

What kind of mandate should "the right" have supported? (Tyler Cowen, June 20, 2012, Marginal Revolution)

The conservatives and libertarians who earlier supported a mandate, ideally, should have been looking for the following qualities in a health care policy:

1. A very small number (one?) of categories for health care coverage and also reimbursement rates.  Mandates for everyone, in other words.  No Medicare, no Medicaid, no separate set of people in an employer-based, tax-subsidized health insurance sector, rather a unified system.  Switzerland comes relatively close to this, and of course some commentators hope ACA will evolve into this ("means-tested vouchers"), though I suspect the scope of the mandate and the cost of the subsidies will prevent this.

2. A rejection of health care egalitarianism, namely a recognition that the wealthy will purchase more and better health care than the poor.  Trying to equalize health care consumption hurts the poor, since most feasible policies to do this take away cash from the poor, either directly or through the operation of tax incidence.  We need to accept the principle that sometimes poor people will die just because they are poor.  Some of you don't like the sound of that, but we already let the wealthy enjoy all sorts of other goods -- most importantly status -- which lengthen their lives and which the poor enjoy to a much lesser degree.  We shouldn't screw up our health care institutions by being determined to fight inegalitarian principles for one very select set of factors which determine health care outcomes.

3. A modest bundle of guaranteed coverage and services.  I am very influenced by David Braybrooke's book on meeting basic needs.  Yet for me basic needs truly are basic and do not involve cable TV or small probability chances of delaying death from prostate cancer.

4. Price transparency (mandated if need be) and real competition in the health care sector, including freer immigration for doctors, nurses, and other caregivers, and relaxation of medical licensing and encouragement of retail medical clinics, a'la WalMart style.  This helps keep the cost of the mandate to reasonable levels.  Most cost-saving innovation should come through markets.  The man strapped to a gurney, bleeding, while negotiating a price with his doctor is the exception in this sector, not the rule.  In any case the insurance companies can prearrange the price for that one.

...universal HSAs from birth, with public funding for those who could not otherwise afford them.  While such a system returns market pressures to the health care industry, more importantly it is a Trojan Horse for boosting peoples' savings/wealth.  Modern democratic polities demand health coverage, but they don't need it.  So give it to them in a form that actually does some social good.

Posted by at June 21, 2012 5:33 AM
  

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