Very Serious Health Care Analysis From Bret Stephens, Man of Seriousity

Bret Stephens is allegedly a unique, challenging voice because he proposes slightly different terrible ideas that the Republican congressional leadership. Let’s see him in action:

It costs as little as $10 and as much as $10,169 to get the same blood test in California. A lower-back M.R.I. priced at $199 at one Florida clinic goes for $6,221 in San Francisco. A shoulder X-ray can run anywhere between $21 and more than $700 across the United States.

In Spain, a 30-day supply of Truvada, which helps prevent H.I.V.-AIDS, costs an average of $559, according to data compiled by the International Federation of Health Plans. In the United States it’s $1,301. In Britain, the average price of an angioplasty is $7,264 versus $31,620 in the United States. Hip replacement in New Zealand is $15,465. The United States figure is $29,067.

Many things about health care delivery in the United States are insane. The economist Kenneth Arrow crisply described the biggest insanity back in December 1963. “Insurance,” he wrote, “removes the incentive on the part of individuals, patients, and physicians to shop around for better prices for hospitalization and surgical care.” When did you last go bargain-hunting for a urinalysis?

So, to summarize, systems that rely more on public insurance than the United States are much more efficient. The takeaway, obviously, is to misleadingly quote an economist who made a famously prescient argument that markets in health care don’t work to suggest that the solution to American health care is more markets. Hard to quibble with that logic!

What is it that Americans don’t like about their health care? Chiefly, skyrocketing insurance premiums, higher deductibles and decreasing access to services. Obamacare has made all this worse.

This is, of course, ludicrous nonsense. The Affordable Care Act has made premiums and deductibles lower and health care more accessible than it would have been under the status quo ante. Stephens tries to defend this claim with egregious rube-running, citing absolute cost increases with an implicit (and obviously false) baseline of a status quo ante in which costs aren’t increasing. Certainly, there is substantial room for improvement — but this would require more public insurance and/or regulation, not less.

But wait, things are about to get a lot worse!

This was predictable. “Obamacare was sold using the language of choice and competition, but it is actually reducing both,” a Wall Street Journal editorial warned back in 2010, when the law was months old. Health insurance doesn’t work when it isn’t allowed to operate as insurance: when it cannot tailor its products to the preferences and budgets of consumers, and when it cannot make business decisions based on considerations of risk.

You do not get to insure your house after it’s on fire. Why should Americans have the unalienable right to wait till they get sick (at least during open enrollment) before buying health insurance?

Yes, if only Congress had thought of this problem when crafting the ACA, and included what we might call a “mandate” incentivizing people to maintain insurance. I mean, it’s just amazing that Stephens is unaware of this. There was a whole Supreme Court case about it and everything!

It’s true that the mandate has not functioned as well as intended, because the subsidies were not generous enough — this would be a fair criticism. Republicans, of course, want to address this problem by making the subsidies much less generous. Also, the House bill had no mandate at all.

Here, however, is where the philippic against the Affordable Care Act ends. Barack Obama inherited a broken health care model and made it worse, unless you count shunting millions of people into Medicaid as a triumph. For all the liberal angst about the Republican House and Senate bills, they are only tinkering with the same unfixable formula.

Where to begin?

• The ACA inhereted a broken model and made it much better. For all its flaws it’s one of the most successful social welfare bills ever enacted by the United States Congress, which is why (despite its effectiveness having been reduced by a ludicrously incoherent Supreme Court holding) the consequences of its repeal would be so dire.
• I do, in fact, regard “shunting millions of people into Medicaid” as a triumph, particularly given the Republican alternative of offering them no insurance at all.
• Any elite pundit who describes a bill whose savage cuts to public insurance, individual subsides and regulatory requirements would strip more than 20 million people of insurance and make insurance for most of the people who retain is worse as “tinkering” should “upper-class twit of the year” tattooed on their forehead

His superior solution to the ACA? Why, tax shelters for the rich health savings accounts, of course!

The only genuinely promising reform in the Republican health bills are proposals to nearly double contribution limits for heath savings accounts and allow them to be used to pay for premiums. Enrollment in tax-deductible, investable H.S.A.s has roughly doubled since Obamacare took effect, to about 20 million, because they help cover out-of-pocket costs for low-premium, high-deductible plans.

But as Peter Ubel of Duke pointed out last year, they’re mainly attractive to wealthier people with income to spare. Government subsidies of H.S.A.s for low-income people, Ubel writes, could turn H.S.A.s into something other than “another tax break for the wealthy” and “make our health care system more responsive to consumer needs.” This is what Singapore does, along with mandates for employees to set aside a portion of their income for H.S.A.s, and for employers to match it.

For a certain type of conservative pundit, “Singapore” functions in healthcare the way “France” functions in abortion law —  i.e. taking one isolated aspect of another country’s regulatory framework and suggesting liberals should therefore like it nyuk-nyuk while ignoring critical differences. Singapore’s model wouldn’t be my first choice if I was Prime Minister of the United States, but like every system in an advanced economy it’s certainly superior to the current American one. I’ll sign for it right now! Only of course Stephens wouldn’t, because what makes the Singaoprean system an efficient and universal one is that the mandatory savings accounts are combined with 1)very generous public subsidies and 2)very aggressive price controls directly imposed by the state. Not only do American conservatives not favor either of these critical aspects, they want the state to spend and regulate less. And without the regulatory and subsidy framework, health savings accounts (even if we assume fantasy Republicans who would actually fund them for poor people rather than just keep them as tax shelters) aren’t going to have a significant impact on American healthcare spending.

This has been “800 words of stepping on rakes” with Bret Stephens.