Obamacare: The Morning After

March 24th, 2010 at 12:52 am | 57 Comments |

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At the beginning of their 1972 series, after the fumbled opening games, Bobby Fischer settled down and played a game so brilliant and imaginative that, at the end, even Spassky stood up and applauded.

President Obama has pulled off a staggering political win. Yes, the final vote in the House was narrow and tight, but he managed to push through his health-reform plans. Frankly, his political victory is awesome. He adds to an impressive list: wrestling the nomination away from the former First Lady, winning a landslide in 2008, championing the stimulus package.

But governance is more than simply politics and political victories. It is also about policy and ideas.

Let’s be clear, for all the hot talk about repeal and sweeping Republican victories in the fall, much of this legislation is here to stay. Sunday was a game changer.  As my colleague and editor David Frum has noted, it’s difficult to see how some of the immediate benefits of the bill – think about filling in Medicare’s donut hole – would be scrapped any time soon.

But at the end of the day, Obamacare may be strong medicine – totalling almost a trillion dollars in ten years, according to CBO scoring – but it’s almost surely an unhelpful remedy.

Republicans and conservatives need to regroup and rethink. Healthcare policy is important, with huge implications on deficit spending, corporate competitiveness, and economic vitality. And, let’s not forget: it affects real people.

American healthcare faces three fundamental challenges:

1) Moving past employer-based health insurance.

Rising out of wage and price controls during the Second World War, we are straddled with a healthcare financing arrangement that the majority of us have – but no one really likes. The system needs to be modernized. Back in 2008, Senator McCain floated an alternative, but his ideas were light, and the policy prescriptions were loose. Moving forward, we need to move past employer-based health insurance.

2) Getting better value for money.

OMB Director Peter Orszag is right – we don’t get value for our money. Health insurance premiums have more than doubled since 2000, yet not even the slickest lobbyist would suggest that healthcare is twice as good. New and more aren’t necessarily better and more effective. In other sectors of the economy, prices fall with time, and quality increases. Healthcare stands as an exception, and that needs to change.

3) Improving health (not just healthcare coverage).

After the Massachusetts reforms passed, the New England Healthcare Institute noted in a paper that Boston has “lots of health care, not enough health.” The authors dubbed it the Boston Paradox: despite massive expenditures on healthcare, people in the state were no healthier, plagued by preventable illnesses. The only problem with that observation is parochialism; nationally, Americans spend more than ever on healthcare, but suffer in large numbers from basic health woes, in part because of the obesity epidemic. Americans need to be healthier, not just covered.

Obamacare flirts with a partial solution to the first challenge (it won’t work), assumes a panel of experts can solve the second challenge (it can’t), and doesn’t do much about the third.Here’s my point. They’ve scored a brilliant political win, but the challenges of reforming American healthcare largely remain. Back during his address to the joint session of Congress in September, Mr. Obama noted that he wanted to be the last President to talk about health reform. He won’t be.

For my part, I’ll be writing more on these three challenges in the coming days. And weeks. And years.

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57 Comments so far ↓

  • ottovbvs

    WillyP // Mar 24, 2010 at 5:06 pm

    “you’ve answered that already: it was 30% less than it was now. which means you have added to the deficit. good going!”

    …..Well that you see would be because when he left office Bush bequeathed the worst financial crisis and recession since the big one left by that other Republican Herbert Hoover……I know economic “experts” like yourself wanted it to turn into a full blown Hoover style depression but that’s not how Democrats govern….they are competent not incompetent like the Republicans proved to be in 2001-2008 and I love your 44…..it’s so exquisitely reasoned

  • ottovbvs

    47 Churl // Mar 24, 2010 at 5:27 pm

    LFC, ottovbvs,

    “As I keep saying, Bush is gone. The deficit that his administration left behind is what it is. The annual deficit more than tripled in Obama’s first year.”

    ……Gone but “the evil that men do lives on”……the deficit tripled from $1.3 trillion the amount spent in Bush’s last year in office?…..I don’t think so…..as someone once said(C. P. Scott I think)……you’re entitled to your own opinions but not your own facts which you appear to be making up as you go along

  • ottovbvs

    50 Churl // Mar 24, 2010 at 5:42 pm

    ” The problem is, the system we are getting is nothing at all like the Germans have in place. I would support a German style system in one of any of my remaining heartbeats.”

    ……Well that you see would be because we’re not starting from the same point that Bismark was in the 1880′s when he introduced universal healthcare and SS in Germany as a bulwark against the social democrats. Maybe if we’d had universal healthcare since the 1880′s, or even the thirties, or even the forties, or even the seventies, or even the nineties we might not have quite such a complicated system on our hands…..it’s really amazing how obtuse apparently intelligent Republicans can prove when they are endeavoring to make entirely specious points.

  • athensboy

    Mr. Gratzer, the gop had eight years to reform healthcare, they did nothing. But now they (not you) cry like little babies over Obamacare.Guess what gop, you dropped the ball, although Obama’s bill is imperfect, at least he’s trying to make a difference. The gop is now crying about how they will appeal the bill. Even if the gop regains both houses in 2010 (doubtful) they would need 290 in the House, and 67 in the Senate, to overide a Presidential veto.So there talk of repeal is just that, talk. Maybe their minions should stop death threats on House members and grow up.

  • TerryF98

    “Sen. Chuck Grassley (R-IA) has long been a vocal critic of the Democrat’s health reform efforts, but today he started taking credit for some provisions of the bill, and talking up his own role in crafting the legislation.

    In a release sent out by his staff to reporters today, Grassley says the bill will “hold tax-exempt hospitals accountable for the federal tax benefits they receive” thanks to his work.”

    It’s the stimulus all over again: Republicans fighting for all their worth to prevent governance, and then claiming credit for it when it passes despite their steadfast, and screaming, opposition.

  • kevin47

    “Yeah – where to begin here – the Right Wing lied to us telling us that we would be out of there in 6 months”

    Source?

    “and the wars would be paid for by oil revenue”

    Source? If we wanted to pay for it with oil revenue, we certainly could, but we didn’t, and not because we don’t like revenues.

    “and these are the same folks who told us there would be “Death Panels” if Health Care Reform passed”

    So, Sarah Palin promised we would be out of the Middle East in six months, oil profits in hand?

    Obama initially promised that federal oversight would reduce costs. His promises have changed substantially since Palin leveled the death panels charge. Now, this is more or less being sold as a prescription drug bill, which is about all it has going for it.

  • WillyP

    I do reason exquisitely, I agree! It’s always been a strong point of mine, I thought. Thank you for recognizing my God given talent!