Friday, October 9, 2009

David Brooks breaks down Baucuscare

I agree on most of his good points (there are side effects - it forces
hospitals to treat more people as outpatients so that they are never
admitted to be readmitted, it lets hospitals make doctors' schedules
instead of doctors - and the hospitals will probably want to increase
the number of patients)

The bad points seem much, much worse to me than the good points are
good, which is why I don't like this reform.

At some point, lobby-busting and union-busting needs to happen; the
Wyden bill would have been much, much better.

The good parts:
"Most impressively, the Baucus bill includes many provisions to make
government-run health care more rational. It would bundle payments to
hospitals and encourage doctors to work in efficient teams. It would
punish hospitals that have to readmit patients. It would create a
commission to perpetually squeeze costs. It would improve information
technology. It would measure the comparative effectiveness of
different treatments. No one knows how much savings would be produced
by these changes in payment method, but they could be significant."

The bad parts:
"The Baucus bill centralizes power, in contrast to the free choice
approach, which decentralizes it. The Baucus approach aims to reduce
costs, expand coverage and improve efficiency by empowering regulators
to write a better set of rules. It aims to rationalize the current
system from the top down.

This approach has many weaknesses. It entrenches a flawed system. It
creates greater uniformity and rigidity. It redistributes income from
the politically disorganized young to the politically organized old.
It squeezes people into a Rube Goldberg complex of bureaucracies based
on their income level. It will impose huge costs on people as they
rise up the income ladder, distorting the whole economy.

The biggest problem is that it will retard innovation. Top-down
systems just don't innovate well, no matter how many Innovation
Centers you put in the Department of Health and Human Services. The
bill will retard innovation by using monopoly power to squeeze costs.
It will also retard innovation by directing resources toward current
care (and current voters) and away from future technologies and future

The parts that could have been great but were killed by unions and
politicians seeking reelection:
"The Wyden approach — first introduced in a bill with Robert F.
Bennett, Republican of Utah, and now pared down to an amendment to the
current bills—would combine choice with universal coverage.

People with insurance could stay with their existing health plans. But
if they didn't like the plans their employer offered, they could take
the money their employer spends, add whatever they wanted to throw in,
and shop for a better option on a regulated exchange. People without
insurance would get subsidies to shop at the exchanges.

Americans would have real choices. The vigorous exchanges would reward
providers and insurers that are efficient, creative and innovative.

But barring a legislative miracle, the Wyden approach was effectively
killed in committee last week. The business and union lobbies worked
furiously against it. They want to control their employees' and
members' benefit packages. Many politicians support it in principle
but oppose it in practice. They fear that if they try to fundamentally
reform the system, voters will revolt."

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