• David Brooks abandons the false choice

    If David Brooks is not the first major pundit/journalist/columnist to abandon the false choice that the candidates and their surrogates are offering on Medicare, he’s the first I’ve noticed to do so. Here he is in his most recent column, channeling his fantasy-Romney’s opening to tomorrow night’s debate:

    Nobody knows how to reduce health care inflation. There are two basic approaches, and we probably have to try both simultaneously.

    The first, included in Obamacare, is to have an Independent Payment Advisory Board find efficiencies and impose price controls. The problem is that that leaves the painful cost-cutting decisions in Washington, where Congress rules. Congress wrote provisions in the health care law that have already gutted the power of the advisory board. The current law allows Congress to make “cuts” on paper and then undo them with subsequent legislation. That’s what Congress always does.

    The second approach, favored by me, is to scrap the perverse fee-for-service incentives and use a more market-based approach. I think there’s ample evidence that this could work, but, to be honest, some serious health economists disagree.

    Now, I am not at all claiming Brooks gets everything right here. I can see several problems, and you can go read Sarah Kliff’s post and Jon Cohn’s tweets for their perspectives. My point is that this is the closest thing I’ve seen to anybody with a readership larger than, say, 6,000 people (ahem, that’d be me), recognize that we can run the ACA reforms (the IPAB and other changes to FFS Medicare) alongside premium support (which is what I think Brooks means by “a more market-based approach”).

    I’ve been making this point for a long time. See this post or that one.

    (Ed note – Austin forgets, but there was a column at CNN advocating that “in a rational world, we’d try all these things”. That column was even picked up by USA Today. I agree I’m not a pundit at David Brooks’ level, but I’m taking credit for this, too! – @aaronecarroll)


    • I think you are a pundit FAR ABOVE David Brooks’ level. There are many documented examples over the years of Brooks “making up” facts that just aren’t so. I haven’t seen any examples of that on this blog.

    • Obamacare represents a transitionary phase in the evolution of the US health care system. Hospitals, drug companies, health insurance companies and physician specialists are all aggressively profit-driven entities. They have been entrusted under the Affordable Care Act with greater control over our health care system and, without a doubt, they will use that power to run-up costs without restraint, grabbing as much profit as they possibly can until our entire health care system collapses under the weight of bulging, swelling, expanding health care expenditures for an aging population pressing down on fragile and already over-extended private and public budgets.

      Our ability to control costs will be further inhibited by a situation of extreme information asymmetry. The end of Fee-for-Service, which for all its faults was at least transparent, will mark the loss of any knowlege on the true cost of helth care services, lost in the impenetrable black box of managed care .Not only will we be paying more, we will have no idea what we are paying for,

      The collapse of US health care will precipitate another huge bail-out on the scale of Wall Street, circa 2008. Eventually we will have to adopt the type of health care system they have in Germany. For-profit insurance companies will be be transformed into non-for-profit “Sickness Funds”, operated as regulated public utilities. They will be given a fixed, global budget and told to negotiate the best prices possible.

      A sobered Congress will have to learn to finally stop meddling and the recommendations of organizations like IPAB will at last have to be treated as more than mere suggestions. We will have to make hard choices about how much money we are willing to spend on people in the last year of life. Those pulling in exhorbitant incomes in the health care field will have to cash in their stock options and retire, to be replaced by others paid more modest levels of compensations.

      Until then however, its going to be a scary ride.