Sunday, April 06, 2008

The Politics of Mandates

I'm a few days late commenting on this, but better late than never. On Friday, toward the end of a column largely devoted to criticizing John McCain’s nonsensical health care policies, Paul Krugman took another swipe Barack Obama:
Indeed, while Mrs. Edwards focused her criticism on Mr. McCain, she also made it clear that she prefers Hillary Clinton’s approach — “Sen. Clinton’s plan is a great plan” — to Barack Obama’s. The Clinton plan closely resembles the plan for universal coverage that John Edwards laid out more than a year ago. By contrast, Mr. Obama offers a watered-down plan that falls short of universality, and it would have higher costs per person covered.

Worse yet, Mr. Obama attacked his Democratic rivals’ health plans using conservative talking points about choice and the evil of having the government tell you what to do. That’s going to make it hard — if he is the nominee — to refute Mr. McCain when he makes similar arguments on behalf of such things as privatizing veterans’ care.
Part of this is fair criticism and part of it isn’t. From a pure policy perspective, I agree with Krugman and Elizabeth Edwards that a health care plan that includes a mandate—like the Clinton and Edwards’ plans—would cover more people and do a marginally better job of reducing overall costs.

That said, I still prefer Obama’s plan. Why? Because I think the inclusion of a mandate would be the death of any health care bill. As Obama has gently tried to point out in this campaign, the only way that a mandate can work is if you impose some sort of penalty on those who do not comply. You have to be ready to impose significant fines on those who refuse to purchase a health care policy.

And that’s the rub. The Republicans don’t need any help coming up with the talking points they’ll need to demonize such a proposal. It will be easy. If you can’t already see the attack ads, you don’t have much of an imagination.

We’re only going to have one shot at getting any kind of comprehensive health care reform through Congress, and that’s only if we’re fortunate enough to have a Democrat take over the White House in January. The pushback against this effort will be intense, with multi-million dollar ad campaigns by independent groups and near universal resistance from the GOP and the conservative media. And while I wish it were not so, I think the inclusion of a mandate would give these groups all the ammunition they need to derail the bill.

I understand why policy wonks like Krugman resent Obama for criticizing something that makes sense from a policy standpoint. I suspect that Obama chose not to include a mandate in his plan precisely because he realized that it was the sort of thing that could sink an otherwise politically feasible bill. Unfortunately, during the course of the primary campaign, he has been forced to defend this decision substantively (rather than just strategically) and has done so by using some of the same arguments conservatives would undoubtedly resort to if the Democrats ever tried to pass a bill that included a mandate.

I think it is perfectly fair to criticize Obama for resorting to such arguments, but that doesn't change the political optics of the situation. Mandates may be good policy, but they are terrible politics. I think Obama’s decision not to include a mandate in his plan will prove to be a wise one if he goes on to be the nominee and an even wiser one if he is eventually elected president and has to undertake the difficult task of actually passing comprehensive health care reform.

There were a lot of features of Clinton's original health care bill that made sense from a policy perspective but were difficult to defend politically. And we know what happened with that bill. Ultimately, the key to accomplishing meaningful health care reform is creating a plan that can survive the political onslaught it will inevitably confront. Once it's passed, and people accept it and want it to succeed, then further bills can be passed to make it more efficient, to help reduce costs, and to help ensure that everyone is covered. But it's going to be an incremental process, and insisting on the inclusion of a mandate strikes me as a way of ensuring that the effort fails, yet again.
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13 Comments:

Blogger MLS said...

How is it that you have reached such certainty that a government-run health insurance system will expand access, reduce costs and maintain (or even improve) quality? Is this based on the great track record of other government services? I know many people who live in areas where it would be unthinkable to send your children to public schools, despite the fact that it is "free." Is there something about health care that is going to make the government wiser and more efficient?

7:05 AM  
Blogger C2H50H said...

MLS,

For an example of a government-run plan that does reduce costs, expands access, and has good quality, look at the VA. Also look at other countries.

There are also many places where the public schools are better than the private schools.

For an example of private sector failure, take a look at health care in this country, or at the securities markets.

Briefly, the government can deliver, in some cases, and the private sector can fail. Health care appears to be one of these places, based on the available evidence.

8:46 AM  
Blogger MLS said...

I am aware that the “available evidence” suggests that the quality of care in VA facilities today is pretty good, at least as compared to what it was 10 years ago. But if the fact that VA care 10 years ago was generally conceded to be abysmal didn’t justify privatization of the VA, I don’t see how the improvement justifies nationalization of the rest of the health care system. And I am not sure that it has any relevance to the Clinton-Obama plans, which are focused on providing government subsidized/mandated health insurance for everyone, which will expand access but also exacerbate the biggest drawback of the current system, namely the fact that consumers have no incentive to be cost conscious in shopping for health care.

I don’t know what you mean by “many places” where the public schools are better than the private schools. Any parents who send their children to private school presumably believe that the education there is better than in the public school alternative. I agree that there are public schools that are of good quality (although very few that can compare to the best private schools), but there are a lot of public schools that are not.

It seems to me that a true public health care system would most likely be roughly analogous to the public education system, with very uneven quality and either high costs or rationing (or both). Of course, Clinton and Obama are not proposing a true public heath care system (at least not yet). What they propose may, if we are lucky, expand access without reducing quality, but at a high cost.

11:34 AM  
Anonymous Anonymous said...

Not only is mandated health care universal and cheaper , it is supported by a majority of Americans

....A new poll from NPR, the Kaiser Family Foundation, and the Harvard School of Public Health,
however, finds that most Americans reject conservatives' approach to health care. In fact, the
majority of the public supports mandates requiring Americans to purchase health insurance. NPR
reports...


It is strange then, that Obama is still claiming that his proposal is universal when it clearly isn't and that he has no compunction using Harry and Louse style ads attacking Clinton. That is shameful and Obama supporters have as little as their candidate.

MLS said: "....it seems to me that a true public health care system would most likely be roughly analogous to the public education system, with very uneven quality and high cost....".
You neglect to consider the difference in funding methods. Medicare and VA for example are funded by taxes on all Americans, public education by local property taxes which is the main cause for the disparity in school funding: poor neighborhoods, poorly funded schools. People who can afford to send their offspring to the best private schools typically spend 25,000 per annum. By comparison, public education is a bargain.

Mike

2:07 PM  
Blogger TheRadicalModerate said...

Having a debate about whether to mandate or not is like fiddling while Rome burns. Trying to squeeze in the last 5% of the population is utterly nonsensical until you can figure out how to produce a system that isn't going to cost an extra $100 billion per year in public funds. That money simply isn't appropriatable. Yes, I know we're spending $150 billion+ on Iraq. But that's going on to the credit card, isn't it? If the war lasts another 3 years or so, that will be a lot of debt to pay down, but it's nothing compared to having an entitlement that exists forever and grows at 2-3% a year. You simply can't do that without raising taxes by a politically unfeasible amount.

Let's concentrate on reducing costs for real. Then we can argue about how many insurance scofflaws can dance on the head of a pin. Neither Obama's nor Clinton's plan has a prayer of materially reducing costs unless we're prepared in incur service shortages. (Say it with me, people, all together: Price controls cause shortages--always.)

But the problem isn't totally intractable. More than half of healthcare expenditures are for routine care. That care is vastly more elastic than catastrophic care. It's also low-tech, the sort of care you can get at your local doc-in-the-box, or properly structured HMO, or even a clinic in your local Walmart.

Right now, "insurance" covers both routine and catastrophic care. Since routine care is fundamentally uninsurable (it's not insurance if there's a 100% chance that the insurer will have to pay out), all you're doing is paying the insurer to obscure the cost of the care, which in turn allows the providers to amortize the costs of the catastrophic care using the fee structure of the routine care.

If you implement policies that acknowledge the difference between services you know you're going to consume and services that you'll only need if you're fairly unlucky, you can dramatically drive down the costs of routine care. You can also implement a rational catastrophic insurance policy where consumers can choose an appropriate deductible that suits their family's circumstances.

Once that's done, we can have have a lovely discussion about how to subsidize families that really can't afford basic care and/or catastrophic insurance premiums. But until you can apply real market forces to as much of the problem as possible, worrying about enrollment is a fool's errand.

2:07 PM  
Blogger C2H50H said...

MLS,

You asked for evidence. I supplied an example. If you wish to cavil at the evidence supplied, perhaps you could state, for the record, what evidence you would find acceptable. Keep in mind that no definitive experiment will ever be run -- for obvious ethical and political reasons.

If you aren't aware of areas where the public schools are significantly better than the private schools, you must not get out much. "Private school" for much of the country means "religious" -- and while these schools are often quite good, they are all-too-often dreadful -- far worse in virtually all areas than the public schools in the same areas.

Pakistan once had a good public education system, you know, which was demolished and replaced by private religious schools. How'd that work out?

2:25 PM  
Blogger MLS said...

What I asked, actually, was the basis for believing that the government could simultaneously expand access, reduce costs and maintain (or improve) quality. You referenced the VA. Of course, if the VA were able to provide unlimited superior quality care at a low cost, the solution to the health care crisis would be easy. Just make the VA system available to everyone. There would be no need for mandates or new government regulations because the VA's high quality, low cost service would soon run the private health industry out of business. You know, like the Post Office did to FedEx.

If by some chance that solution doesn't work, I would suggest that we look at theradicalmoderate's ideas instead.

5:43 PM  
Blogger C2H50H said...

MLS,

VA care is lower cost than competing plans (reduced cost). It has expanded, as more people have taken advantage of it. And it's quality has held up.

Since nothing scales to the unlimited case, putting everybody under the VA is not the solution -- but it provides a datapoint to answer your question.

As for RM's ideas, when he starts off with "first let's reduce costs" -- without giving any sensible method for doing so -- you know his ideas aren't going anywhere.

6:03 PM  
Anonymous Bill Keane said...

This issue illustrates the important distinction between being right on a point of principle(Krugman) and formulating policy with an eye to actually governing(Obama). People sometimes unfairly tell Krugman to keep his nose out of political issues. That is a bit rude. He is a brilliant guy with some great insights. However, his limitation is that he sees policy through an academic frame (who is right?) rather than a pragmatic one (how do we make things better?). Obama's candidacy is pragmatic to the core. Just look at his caucus ground game, his fundraising strategy and education policy. He's not an ideological warrior, which is why Krugman simply doesn't get him. This is also why the talk about him being just a good speechmaker is off the mark. When you read his policy proposals, they are suffused with a very pragmatic understanding of how government actually works.

5:12 AM  
Anonymous Splitting Image said...

Krugman is undeniably right to point out that Obama's plan will leave many people uninsured.

Having said that, Obama is right to reject his argument and push for a plan that might actually get implemented.

Americans sometimes look at Canada's health care system as an example. It's worth noting that the original bill passed in 1966 had a number of loopholes that weren't closed until 1984.

Eighteen years later.

Doctors were allowed to bill a patient extra money for procedures that they were paid for by the government, for example, which effectively barred poor patients from those procedures.

Americans justly don't want to see this happen, but I do think that it's worth going for a plan that achieves most of what you want, and push for the rest when you have the first part entrenched. Better that than to have the whole plan shelved for ten more years.

1:51 PM  
Anonymous neutral said...

Today--April 11, 2008--Barack Obama's chance of becoming president became zero.

10:31 PM  
Anonymous Anonymous said...

Obama and his supporters think that non-universality non-universality is fine

..."In 2002, the Institute of Medicine released a groundbreaking report, Care without Coverage: Too Little, Too Late, which estimated that 18,000 adults nationwide died in 2000 because they did not have health insurance. Subsequently, The Urban Institute estimated that 22,000 adults died in 2006 because they did not have health insurance. To find out what this means for people across the nation, Families USA has generated the first-ever state-level estimates of the number of deaths due to lack of health insurance. Our estimates are based on both the Institute of Medicine and The Urban Institute methodologies applied to state-level data."

Mike

6:56 PM  
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