Published July 8, 2010
The reason the health-care debate has been so polarizing is that there is a deep and fundamental divide over what should be done to fix the problems in American health care, especially with regard to rapidly rising costs.
On one side of the debate are those who advocate a decentralized, market-based reform program. Rep. Paul Ryan is among the leaders pushing for such a consumer-driven solution.
On the other side are what you might call the “governmentalists.” The governmentalists believe the way to “bend the cost-curve” is with a centralized, government-led effort to micromanage the entire $2.6 trillion health sector from Washington, D.C.
President Obama, his top aides, and his allies in Congress are all quite clearly health-care governmentalists. The evidence for this is on full display in the bill they jammed through the legislative process. It is filled to the brim with provisions that shift power and authority away from states, individuals, employers, and the private sector to the federal government.
The federal government is now the nationwide regulator of all private health insurance. Federal bureaucrats can pick and choose which insurers are allowed to sell to customers in government-managed “markets.” The federal government will determine what health benefits every citizen and legal resident must secure to avoid paying a punitive tax. The federal government will also decide the appropriate level of cost-sharing for government-certified insurance products.
The new law is also filled with provisions which the sponsors contend will slow cost growth with “delivery-system reform.” The federal government has been put in the driver’s seat of a sprawling effort to force doctors and hospitals to quite literally change how they care for patients and conform to the federal government’s view of what constitutes cost-effective medical practice. Medicare’s administrators will be using new authority to reward those who toe the government’s line and hit budget targets, and punish those who don’t. Government reimbursement will be used to prevent the introduction of medical technologies considered excessively costly.
Although President Obama is quite clearly a committed and enthusiastic health-care governmentalist, he has never admitted as much in public, nor is he ever likely to. He avoids engaging in direct debate over the merits of his position with the market-based reformers. Instead, he argues, as he did at the so-called “bipartisan summit” back in February, that there is no great disagreement over substance; it’s just that those dastardly Republicans are against progress on his watch.
In a way, it’s hard to blame him for ducking the fight. The entire governmentalist reform program is based on the assumption that the federal government has the capacity to nimbly manage the health sector and to cut out unnecessary spending without harming the quality of care. Let’s just say that’s a hard sell with most of the public. The federal government has been running public-insurance programs for almost half a century. The only way it has ever cut costs is with arbitrary, across-the-board price setting. These price controls cut reimbursement rates for all providers of services, without regard to what it will mean for patient care. That’s the norm in government-run systems around the world as well. And the end result is not more efficient health care. Artificial, government-set cost limits simply drive out willing suppliers of services, and eventually lead to access problems, queues, and government-driven rationing of care.
Truth be told, this is a debate President Obama has always known he couldn’t win, and so he never wanted to engage in it.
Which brings us to the administration’s recess appointment of Dr. Donald Berwick as administrator of the Centers for Medicare and Medicaid Services (CMS).
Unlike the president, Dr. Berwick hasn’t hidden his worldview.
The White House says Republicans were planning to obstruct the nomination. Republicans haven’t obstructed anything. All they did was signal an eagerness to engage in a spirited debate over Dr. Berwick’s vision for health-care cost control. The reason Dr. Berwick’s nomination hasn’t moved forward is because he hasn’t yet submitted responses to relatively routine questions posed by the Senate Finance Committee — questions that would have been asked of any nominee, from either party, given the same set of facts and circumstances.
Some have speculated that the White House chose to make the recess appointment because the answers to some of those questions might cause some problems for the nomination or the administration. Perhaps. But it seems more likely that the primary motivation for the recess appointment was to avoid a clear and transparent fight over the merits of the competing visions of health care reform. Dr. Berwick is an unvarnished governmentalist of the first order. The debate over his nomination would have been the perfect opportunity to present clearly to the public the consequences of handing over so much power in the health sector to the federal government.
The decision to bypass a confirmation fight may have avoided some short-term pain for the administration. But the long-term problem remains. The president jammed his health-care bill through Congress without a full debate and public consent. Voters don’t want the federal government put in charge of cost control, and yet that’s exactly what the new law will do. In time, that fact will become obvious to everyone. At which point, those who sponsored and passed this new reality into law will be held accountable for what they have done.
James C. Capretta is a Fellow at the Ethics and Public Policy Center. He served as an associate director at the White House Office of Management and Budget from 2001 to 2004.