Conservatives on health care reform

The New York Times reports that the debate over red herrings such as "death panels" is frustrating conservative health economists who want a real substantive debate on health care reform.

... many leading conservative health care policy experts said in recent interviews that the dynamic was precluding a more robust real-world debate while making it nearly impossible for them to inject their studied, free-market solutions into the discussions... “There are serious questions that are associated with policy aspects of the health care reform bills that we’re seeing,” said Gail Wilensky, a veteran health care expert who oversaw the federal Medicare and Medicaid programs for the first President George Bush and advised Senator John McCain in his presidential campaign last year.

Well, it's pretty late in the game to begin a muscular advocacy of alternative approaches to health care reform. 1994 would have been a good time to inject some ideas. Be that as it may, what are those substantive objections to the Democrats' health care proposals? The Times leads with this one:

Like many of his conservative peers, Dr. [Scott] Gottlieb [AEI] said he was concerned that the administration’s plan would fail to control costs adequately while increasing demands for services. The result, he said, is that Medicare, Medicaid and any new government insurance program would be forced to deny payment for procedures deemed unnecessary... [The Administration argues that] they can find that money with real efforts to decrease redundant procedures due to poor record keeping — causing a doctor, for instance, to prescribe an expensive test a patient has already had — and the correction of similarly exorbitant inefficiencies throughout the system... But, starting out with a general distrust of government solutions, even conservatives who agree that tens of billions of dollars are wasted annually are dubious about the government’s ability to find significant savings without eventually affecting care negatively. They argue that the government is incapable of making such cuts fairly or competently.

Well that's an interesting twist on an old canard. Not only is government inherently incapable of spending your money wisely, as conservatives usually claim - now government is also inherently incapable of reducing wasteful spending! I seem to recall previous Republican administrations and Republican Congresses proposing what they advertised as reasonable cuts to Medicare and other government programs, claiming that they were merely trimming the fat rather than cutting essential services. Now we can't trust government to distinguish fat from meat - I'll have to remember to pull that one off the shelf the next time a Republican advocates spending cuts to reduce the budget deficit!

What is the proposed alternative to letting the government find ways to cut spending?

“We profoundly disagree with this notion of a large, centralized restructuring of the health system,” said Stuart M. Butler, a vice president of domestic and economic policy studies at the Heritage Foundation, a conservative research group. “You’ve got to devise a system that starts to change underlying incentives — the policy incentives — and allow a gradual change in the system over time.”

Ah, so while government can't recognize wasteful spending in its own budget, it is capable of devising incentives that align private and public interests through adroit restructuring of the tax code. This fact has been demonstrated frequently in the past, for example in the way that the government has used the tax code adroitly to stimulate the ethanol industry, subsidize employer-based health insurance, increase the private savings rate,...

The Times then drops this little nugget:

That is not to say that there is much of a consensus among conservative health care policy analysts, who face an intellectual conflict on health care: many proven ways of saving money have tended to result from the sort of centralized decision-making that they have traditionally abhorred.

Yes, intellectual conflict. I too feel the pangs of intellectual conflict when the facts turn out to contradict my deeply held beliefs. I call it "being wrong."

Conservative health economists have important things to say about health care reform. Their problem is that they've never had a political party behind them that has taken a real interest in the subject. Until the Republican party takes health care reform seriously instead of using proposals like medical savings accounts merely to score political points during elections, the conservative economists are going to continue to be frozen out of the debate.