BY: Walter Russell Mead (my fave Prog writer)
After oral arguments before the Supreme Court this week, the odds
that the Court will strike the individual mandate rose sharply; Intrade
markets after the hearings showed bettors thought there was a 62 percent
chance that the mandate will fall.
I can’t tell you whether the law is unconstitutional; I can’t even
tell you whether the Supreme Court will uphold it — or, if the mandate
goes, what else might stay.
But the health care law’s troubles shed some further light on the
crisis of American progressivism and the blue social model it has built.
Those who believe in the blue model and want to extend it have lost
their touch; the dream machines of the blue social engineers don’t sail
serenely across the azure sky anymore. Think of the various carbon
exchanges and environmental planetary schemes; think of high speed rail
proposals like California’s $100 billion train to bankruptcy; think of
Obamacare. These days the experts, “social entrepreneurs” and smart
young blue twenty somethings fresh out of the Ivy League whomp up social
programs with as much verve and dedication as their New Deal and Great
Society predecessors, but the new Dreamliners don’t take off. At most
they roll around the runway, emitting clouds of noxious smoke; wings
fall off, windows pop out, turbines misfire and the tires go flat.
Obamacare was supposed to be the capstone in the arch of a new
progressive era. The Dems were going to show us all that government
really does work. Smart government by smart people, using modern methods
and the latest up to the minute research from carefully peer reviewed
articles in well regarded social science journals can solve big social
problems. Obamacare was going to be such a big hit that even the bitter
clingers would have to put down their guns and their Bibles long enough
to thank the Democrats for this wonderful new benefaction.
But even if the Supreme Court doesn’t pull the trigger and kill the
law in June, the darn thing won’t fly. The public hates it, and the
longer it’s on the books the less popular it gets. This isn’t like
Social Security, a program the public fell in love with early on and
still cherishes today. It isn’t like Head Start, which remains dearly
beloved even though there doesn’t seem to be much evidence that it helps
anybody other than the people it employs. Obamacare is only marginally
more popular than the Afghan War; already its estimated cost has doubled
and we all know these numbers are likely to continue to increase.
Obamacare so far is a political flop and shows ominous early signs of
being a policy misfire as well. The benefits don’t seem to measure up to
the hype, more people are going to lose their existing insurance,
premiums are going up and the impact on the deficit is going to be
worse.
This is a horrible piece of legislation — as misbegotten and useless to its friends as it is menacing to its enemies. The
question is: why? Why did the blues write such a bad law? Why, given a
once in a lifetime chance to pass a program that Dems have longed to
achieve ever since the New Deal, did they craft a sloppy mess that
nobody understands and few admire, and then leave their law so
unnecessarily vulnerable to constitutional challenge?
The answers tell us much about why blue progressive thinking is
losing its hold on the body politic — and why blue methods generally
aren’t working as well as they used to.
First, there is the question of complexity. The health care system
has become incredibly complicated. It is huge — roughly one sixth of the
national economy. It is like a tropical rain forest: an ecosystem that
is so complicated that nobody understands the complicated
interrelationships of its web of life. Tweak something here, and
something completely unexplained happens over here. You can’t regulate
something this complicated effectively by a government bureaucracy any
more than you can regulate a rain forest by decree: telling the
thousands of species of butterflies when to mate, the army ants where to
march, the sloths which trees to prune, the jaguars what to kill and
when, repressing the anacondas just a touch while encouraging the
otters.
Blue regulation works best in simple systems. Social Security doesn’t
have a lot of whistles and bells. Retirement, retirement age, actuarial
projects, payroll tax deductions: these are relatively simple things.
(Even so, we’ve gotten it badly wrong, but Social Security is far from
our most serious budgetary problem.) Social Security could be run by
accountants with adding machines; there is no rocket science involved.
Not so the government’s brave ventures into health care. People
who’ve devoted their lives to the study of our health care system
(really, system of systems or just systemic chaos) don’t understand
everything about it or how it all works. Tweak a Medicare reimbursement
formula, and suddenly nurses are getting a windfall in Chicago while GP
practices are shutting down across Kansas. As the numbers grow, and the
complexity of the system increases, the opportunities and incentives for
fraud balloon — again, often in ways that those trying to ‘fix’ the
system don’t understand or predict.
Then comes the second problem: the throngs of cooks that spoil the
broth of progressive legislation these days. As the system to be
regulated becomes larger and more money flows through it, the
‘legislative space’ is suddenly populated with very effective and
sophisticated lobbies. Everybody from the AARP to the NOW, the NCAA, the
NAACP and the Catholic Church wants a bite at this apple. Community
hospitals, teaching hospitals, outpatient clinics, drug manufacturers,
chiropractors and osteopaths, firms selling catheters on television
infomercials, psychologists, rehab clinics, pregnancy test
manufacturers, doctors’ associations, staff unions: there is no end to
the number of groups who want to tweak health legislation on this or
that issue.
There is no way that a “pure” policy proposal can emerge from this
feeding frenzy unscathed. No law that Congress passes affecting this
many interests in this many ways will be less than a thousand pages
long, and the bulk of those pages will be filled with carve outs,
exemptions, special provisions and good old fashioned train robberies.
It is a perverse but very real fact of life that the more complex and
rich the system to be regulated, the less the “experts” and the
goo-goos have the political power to impose their vision on the
regulatory process. The more carefully crafted a law needs to be, the
more it is going to be full of lobby lollipops and sweetheart deals. A
legislative body trying to write a health care law for a country like
ours is like a neurosurgeon operating, drunk, with one hand holding a
chainsaw and the other in a boxing glove.
The third problem that makes it hard for blue methods to work well in
health care has to do with the state of the system. Government
regulation and centralized organization work best when an industry is in
a steady state. Utility companies in the 1950s for example were using
tried and true technologies. Their costs were predictable, their
business model didn’t change much, and, for all its flaws the system
seemed to work pretty well. Government could regulate rates and access
and while there may have been costs and inefficiencies that resulted
from the regulation, on the whole it was relatively easy to develop and
apply a reasonable set of regulations and policies. With no concerns
about global warming, air pollution or shortages of hydrocarbons, there
was little sense that the industry needed to change. We had the grid and
the generating system we figured that we needed; all we had to do was
maintain what we had and grow it a few percent every year to take care
of population and economic growth. That is the kind of situation that
blue model thinking can manage fairly well: Fairly simple, not too many
complicated interlocking feedback mechanisms, no driving need for
discontinuous and disruptive change, no existential threats or
challenges requiring flexibility or systemic change.
Health care doesn’t fit that mold. We don’t actually have a working,
sustainable system: what we are doing now is on course to bankrupt us
sooner or later as the population ages, new technologies force rapid
change, and, for various hard to decipher reasons, costs internal to the
system keep rising faster than the rate of inflation.
We don’t need to administer an existing system smoothly into the
future. We need to reform, reinvent and renew our health care system. We
need drastic innovation that can use the power of IT to make the health
care system much more productive: able to deliver better outcomes at
lower costs.
This calls for the opposite of a steady state regulatory model. It
calls for the opposite of greater central control and greater
standardization of methods and procedures. Obamacare, despite well
intentioned cost control efforts and some genuinely positive steps
toward the use of electronic patient data and other promising approaches
that could make the system more efficient, will have the effect of
locking in existing practices. And once the system is politicized, the
lobby groups (unions, hospital companies, insurance companies,
professional groups and many others) will make reform and adjustments
impossibly hard. The system will stagnate and freeze, making real
innovation harder at just the time we need it most.
These problems all loom large in the health care reform effort, but
they rear their heads almost anytime people today seek to address
pressing social problems with progressive era methods. All our systems
are growing more complex as time goes by, and therefore harder to
regulate effectively. Lobbyists and pressure groups play an increasing
role in the political process as government’s role grows and as more
companies and other groups feel the need to influence Washington to
protect their interests. And the IT revolution is pushing us to
restructure and reform the learned professions and the intellectual
guilds in the face of rising costs and low productivity.
Obamacare reveals the mismatch between the progressive imagination
and both the needs and opportunities of our time. It is a 20th century
solution for a 21st century society.
The question before the country isn’t whether the law will stand. It
is headed for failure; the question is whether the Supreme Court will
kill it quickly and at a relatively low cost, or will it impose huge
costs and inefficiencies across the country as its contradictions and
inadequacies are successively revealed.
I opposed the law when it was passed on the grounds that it
represented another rip off of the country’s young people to lower costs
for the Boomers and the middle aged. Young men (increasingly the most
vulnerable people in a society that cares little or nothing about most
of their issues) especially are going to be forced to pay too much for
insurance they don’t need. It is their artificially inflated premiums
that will provide the money that lets the social engineers of Obamacare
play their complex games with the health care system.
Supporters of the program rise to argue that when the young men grow
older they will need more care and then they will benefit from cheaper
premiums as they in turn are subsidized by the next wave of suckers,
excuse me, young people. But Obamacare isn’t fiscally balanced or
sustainable; its true costs were disguised by accounting tricks like
postponing some of its impacts while collecting its revenues so that the
first ten years of the program looked good on Congressional Budget
Office scoring sheets.
Cheap tricks might work to befuddle lazy reporters (or allow the
ideologically committed to collude in the deception of readers for the
greater good), but they won’t pay the bills or stop the inexorable rise
in health costs. By the time today’s young people are ready to collect,
without the kind of innovation that Obamacare is likely to prevent
rather than encourage, the system will have to be curtailed out of
financial necessity. The care they get will likely be less generous than
the care the first generation in the system gets; this is wrong both
from a moral and a policy standpoint.
Our health care policy today needs to begin from the understanding
that the system we have today simply cannot serve us ten, twenty or
thirty years into the future. In the real world it is impossible to
avoid a significant government presence in the health care sector; from
veterans’ care to pediatric care to the care of the poor, there are too
many reasons why government at some level must ensure care to build a
purely private health system.
But our approach to health care must be to create possibilities and
incentives for innovation and change, rather than to keep the current
system alive by pumping ever growing volumes of money into it.
Developing a highly efficient health care system is more important to
the country’s future prosperity than all the high speed trains and
“green jobs” boondoggles ever dreamed up. It matters more than almost
anything else we do. The federal government should be encouraging states
to try different approaches rather than nudging them toward standard
models. It should be looking to give consumers more power over (and more
responsibility for) their own choices in health care. Health care
reform must try to do a very short list of things very well; the longer
these laws get and the more issues they try to take on, the more
lobbyists and special interests are able to twist those laws toward
their own limited ends.
Obamacare is not all bad, but it is not close to being an answer to
this country’s present and future health care issues. If the Supreme
Court finds the law unconstitutional and sends the whole thing back to
the Congress to have another try, it will do us all a favor.
