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The Smallness of the Health Debate and the Failure of Elite Imagination

Walter Russell Mead & Jason Willick

Lurking beneath all the vicious barbs and apocalyptic claims being hurled about in the fight over Obamacare and its potential replacement is a sense of resignation—resignation that our healthcare system is basically stagnant, that costs will continue to consume a larger and larger share of our national income, and that major changes in the way care is delivered or regulated are basically impossible.

The debate we are having is therefore about how best to distribute what is assumed to be a constant amount of suffering—about who should be screwed over the most as the system as a whole continues to stagnate and underperform. Obamacare imposed higher costs on the young and raised taxes on the rich while adding millions to the Medicaid rolls—a second-rate government insurance system that may or may not improve health outcomes. The GOP would lower insurance costs for the young, raise them for the rich, and shrink the Medicaid rolls reduce the deficit and deliver a big tax cut, mostly to high-earners.

In other words, the parties are locked into a more-or-less zero-sum fight over resources that leaves the underlying deformity of our system unaddressed: Healthcare costs too much, whether it is paid for by government or private insurance. Our existing healthcare system is on a trajectory to bankrupt the country no matter how we distribute the costs. There was a time when wonks on both sides expressed more interest in addressing the roots of this cost disease. But today—whether because of a loss of national confidence, or a deficiency of ideas, or because of rising partisan balkanization that makes everyone simply want to protect their own without regard for the country’s long-term health and prosperity—the totality of our health debate has been reduced to a single, narrow question: How much should government subsidize health insurance as the system as a whole continues to sink?

There is no answer to that question will satisfy Americans in the long run. So whatever the fate of the Senate’s hastily drafted and deeply unpopular Obamacare repeal, the wider healthcare policy agenda should focus like a laser on making care less expensive—on achieving the kind of positive-sum outcome that has always been the key to America’s economic success.

What if instead of simply rolling back Obamacare’s taxes and transfers, Congress passed a smorgasbord of experimental measures aimed at bringing prices under control in the long run? There are a number of ways we can reduce cost by increasing the supply of care. For example, we could tweak our immigration system so that more well-qualified doctors come to work in the United States (the U.S. has fewer doctors per capita than many other advanced countries) and certify more medical education programs. We could encourage a more efficient distribution of doctors by offering medical school loan forgiveness for doctors who work in places with a care shortage, as Thomas Jefferson University’s Drew Harris has proposed. We could encourage an overhaul of occupational licensing restrictions so that physicians assistants and nurse practitioners can perform a greater range of primary care functions.

Then there are ways to improve competition and increase efficiency. We could repeal regulations that have encouraged hospital consolidation and encourage tougher anti-trust oversight when care providers seek to acquire their competitors. We could pass tort reform that limits malpractice payouts and reduces “defensive medicine”—and extract other cost-lowering concessions from the doctors’ guild in exchange, as a 2014 Health Affairs article suggested. We could reform HIPAA privacy laws to make it easier to gather big data about health outcomes and ultimately deliver better treatments at lower cost.

There are also more radical ideas. For example, the federal government could create a prize fund for medical innovations as a partial replacement for our current intellectual property system that gives pharmaceutical companies temporary monopoly power over their inventions. The liberal economist Joseph Stiglitz discussed the potential benefits of this approach in 2006: “Such a fund would give large rewards for cures or vaccines for diseases like malaria that affect millions, and smaller rewards for drugs that are similar to existing ones, with perhaps slightly different side effects. The intellectual property would be available to generic drug companies.” The rewards would be big enough to incentivize or even expand research and innovation while significantly reducing drug prices.

And because healthcare cost inflation is ultimately a threat to America’s public health in addition to its fiscal health, it makes sense for research on cost control to be a priority for institutions like the NIH. Figuring out how to deliver basic care at a more reasonable price will save more lives in the long run than most new cutting-edge discoveries.

The point is that health policy focus less on marginally expanding or restricting the share people who get government help buying insurance and more on how to make healthcare cheaper overall. Americans will never be satisfied with an endless tug-of-war over how to direct scarce resources while the system gradually succumbs to cost disease that’s why voters punished the Democrats for Obamacare and are likely to punish the Republicans if their bill goes through.

Republicans, in particular, suffer from a narrative deficit when it comes to healthcare. They have been declaring for years that by repealing the Affordable Care Act they would return the American healthcare system to its imaginary former glory. In fact, the healthcare system faced major problems before the ACA—some of which the law made better, and some of which it made worse. The crud that has been accumulating in the system can’t be addressed all at once. Reform should be repositioned as a series of incremental steps in the direction of lower-cost care care plus a temporary compromise over Medicaid and subsidies to tide us over until the good times arrive.

This is a more challenging and by necessity more experimental project, and it will never be fully complete. But it has the potential to start breaking us out of the despairing confines of right-left Obamacare debates, which suggest a society that has lost the confidence and imagination to reform its institutions to address its gravest challenges.

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