Harry Moroz
Freedom, Choice, and Health Care Reform
Perusing the 2001 introduction to Karl Polanyi's classic tome The Great Transformation, Joseph Stiglitz helpfully reminded me that "Today, there is no respectable intellectual support for the proposition that markets, by themselves, lead to efficient, let alone equitable, outcomes." Stiglitz was, of course, referring primarily to contemporary economists, rather than conservative bloggers. Yet the willingness of certain reform naysayers to peddle the notion that our current health care system provides more choice and more freedom - more efficiency - than the Affordable Health Choices Act casts doubt on Stiglitz's assertion.
Earlier this week at The Foundry, the blog of the conservative Heritage Foundation, Rory Cooper took a crack at defending the health care status quo. His main message was that reform in general, and the House's tri-committee bill currently being marked up in committee hearings in particular, would "force" millions of Americans into health insurance that they presumably did not want.
Cooper cites a Lewin Group study from April that found that a public option would enroll about 119 million Americans. He writes:
Currently, there are roughly 160 million Americans who have private health insurance. So this figure represents more than two out of three privately insured Americans. Are you going to be the lucky one out of three?
In emphasizing the number of Americans who will be "forced" to give up their private health insurance, Cooper completely conflates the "public option" with the Health Insurance Exchange.
The public option is a government-run insurance plan that would be cheaper than private plans because of government pricing power and other presumed efficiencies in administrative costs. The Health Insurance Exchange, on the other hand, is essentially a mechanism to improve regulation and oversight of the health insurance industry: the insurance remains private, but the government sets minimum coverage standards, prohibits denial of coverage in most cases, and limits cost-sharing for preventive procedures. In addition, consumers can more easily compare the benefits and payments associated with each plan.
Indeed, instead of doing archival research of studies published in the spring, Cooper might have looked at this week's CBO analysis of the actual Affordable Health Choices Act, which asserts that "total enrollment in the public plan would equal about 11 million or 12 million..." This is a far cry from a government monopoly of the health care system and a farther cry from Cooper's harangue that the Act will "slowly kill private insurance..."
The rub here, for Cooper and other supporters of the unrestrained market, is that the health reform bill actually increases consumer choice by creating more quality health care options. The Health Insurance Exchange is a means of regulating private insurance, not destroying it: it maintains a market for insurance, while affirming Stiglitz's confidence in modern-day economists' good sense.
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Posted at 11:36 AM, Jul 17, 2009 in Health Care
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When Joseph Stiglitz said that, Today, there is no respectable intellectual support for the proposition that markets, by themselves, lead to efficient, let alone equitable, outcomes, he meant something very specific: in developing countries, markets are weak, so without regulations they collapse. And even that is controversial, at least when accompanied by the solutions Stiglitz proposes for the problem. Most economists writing about developing country markets would tell you that the sort of regulation that's necessary is one encouraging stable markets. (Most economists would also find it uncontroversial that there should be universal health care, but there are entire industries in Washington dedicated to lobbying against things most economists find uncontroversial).
Posted by: Alon Levy | July 18, 2009 12:40 AM
Mr.Stiglitz cites a Lewin group study to justify his point of view while ignoring the fact that the Lewin group is a fully owned subsidiary of United Health Care Inc.,this organization is nothing but a P.R. firm for a big health insurance company and has NO credibility.
Posted by: Joseph Miranda | September 17, 2009 03:37 PM