• Of markets, choices, mandates, and the uncertainty of reform

    I’ve just finished reading Theodore Marmor’s The Politics of Medicare. A few passages in the final pages are worth quoting. In the following, which appears on page 165, Marmor articulates the reason why one should be cautious in contrasting existing government programs with proposed market-based reforms. (If you think I’m starry-eyed, you can apply this to my own advocacy of competitive bidding in Medicare.)

    The diagnosis of government failure justifies market reform; the desirability of market competition in health care requires nimble regulation by the very government whose incapacity justifies the appeal to market reform in the first place. Yet, as long as idealized images of market competition were set against operational government programs, the conclusion that market reform was superior proved hard to reject.

    Gradually, in the final decades of the 20th century, market-centric ideas had a strong influence on health policy and health plans, most notably in the area of managed care. Much of it was, and continues to be, promoted in the name of “choice.” About that, Marmor writes,

    Most of those [managed care] plans managed little else but costs and, in doing so, restricted the choices of both medical professionals and their patients. In the name of expanding choice, American medicine went through a period of extraordinary reduction of choice. [Page 167]

    These restrictions set the stage for the, now famous, managed care backlash of the 1990s. It was precisely in this climate of consumer- and provider- driven outrage that many benefits mandates became law in many states and with bipartisan support.

    Very few observers would have predicted the subject of controversy in the state legislatures of the mid-1990s: issues like drive-by mastectomies, limits of one day’s hospitalization for the delivery of a child, or gag rules on what doctors could tell their patients about the limits of their managed care plans. Procompetitive enthusiasts did not predict such disputes either, but they have arisen in part because of the role of their ideas in the complicated politics of American medicine. [Page 168]

    It’s hard to account for politics. However, history has shown that in the realm of health care Americans do not like to be told what is best for them, particularly as they pay more for it. We overlook that fact, and its political consequences, at our peril. It’s a reason to predict poor performance of ACA-prescribed reforms in states where they can be successfully labeled a “government takeover” of medicine. But it’s also a reason to be skeptical of more “market-driven” reforms, whether managed care or financing arrangements that fall under the rubric of “consumer-directed health plans.”

    At least as it pertains to costs, if there is a basis for optimism about the politics and consequences of health care reform, it’s not found in our history. It’s only found in the hope we’ve invested in our own vision of the future, or that of another we’ve adopted. It’s inevitable that the future will become the past. Is the failure of health reform, whether mine or yours, just as certain?

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