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Thursday, March 06, 2008

Health Care Inaction

Long-time friend and frequent correspondent Bob Odean recently forwarded to me a magazine article summarizing the position of one of the presidential candidates on the subject of health care and asked whether I had been studying the various proposals being offered and planned to comment.

My answer in both cases is no. To be frank, I have not been paying much attention to what the candidates are saying on this topic. For one thing, I have learned over the years that the poll-and-focus-group-tested statements of candidates are not very reliable indicators of what they will do if elected.

But of greater relevance in this particular case, it seems to me that whatever the candidates might say, health care is not going to receive much action at the federal level in the foreseeable future. Any politically palatable proposal would involve spending money and what with the war, the deficit, and the recession, there isn’t likely to be any.

Although most of the political discussion has dealt with the issue of health insurance coverage – should it be compulsory or voluntary, etc. - I have noted comments by one or two candidates to the effect that cost is also a problem. I take that as a sign of growing realization that, by itself, extending coverage is not a solution. Massachusetts, which has been thought a national leader in this area, has just doubled the estimate of what its program will cost and there is some doubt as to whether the state will be able to afford it. California took one look at the Massachusetts experience and killed Governor Schwarzenegger’s proposal for universal coverage.

The core issue is that we have a system of delivering health care services that cannot be sustained economically. Fixing that means changing the system so that it requires less money. But one-man’s outgo is another man’s income and so if less is spent, somebody will get less and whoever that is will be unhappy. Making people unhappy is something that politicians are notably reluctant to do.

Up to now, the pain of paying has been less than the pain of doing something about it and so costs have continued to rise. Ultimately, that will reverse – in the private sector or the public sector or some combination of both. When it happens, corrective action will begin.

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