In his weekly address this weekend (prerecorded so he could play golf and mingle with the common folk on Martha’s Vineyard), President Obama talks about implementing the Affordable Care Act, which everyone but the Obama administration calls ObamaCare.
As usual, the talk was full of nasty and misleading partisanship. After listing the popular aspects of the law, such as the guarantee of coverage despite pre-existing conditions, he accuses Republicans of wanting to make sure Americans don’t receive those benefits:
They’re actually having a debate between hurting Americans who will no longer be denied affordable care just because they’ve been sick – and harming the economy and millions of Americans in the process. And many Republicans are more concerned with how badly this debate will hurt them politically than they are with how badly it’ll hurt the country. A lot of Republicans seem to believe that if they can gum up the works and make this law fail, they’ll somehow be sticking it to me. But they’d just be sticking it to you.
Republicans, of course, are not against many of the aspects of ObamaCare, they are against its bureaucratic bloat, incredible waste, poor and backward-looking design (it’s basically the old Blue Cross Blue Shield model of half a century ago that Medicare was based on) and government control of one-sixth of the American economy. But as long as there is not even a broad-brush Republican plan to reform the medical marketplace, Obama will be able to beat up Republicans. As Harry Truman explained sixty odd years ago, you can’t beat something with nothing.
But if the Democratic Party is, ever increasingly, the party of government, the Republicans should be ever increasingly the party of the free market. No one argues that medical care should be allocated strictly according to market forces. But where market forces can exert economic discipline far more efficiently than bureaucratic fiat, they should be used and Republicans should advocate their use unashamedly. They should advocate allowing insurance companies to compete across state lines, so that people can evade the costly mandates that some states impose (in New York, you must be covered for acupuncture, in vitro fertilization, chiropractic treatments, etc.). This would instantly and greatly lower insurance premiums in those high-cost states. Removing medical malpractice from the tort-law system, which benefits only tort lawyers (a very powerful Democratic constituency), would save many billions as “defensive medicine” disappeared and malpractice premiums were drastically lowered.
And forcing medical service providers to make their prices public, just as the providers of most other services must, would also greatly lower medical costs. Two weeks ago, I wrote about the medical outrage called the chargemaster, the exhaustive list of prices for procedures, drugs, and medical equipment that every hospital maintains and which every hospital refuses to reveal—until they send the bill. Interestingly, even the avidly pro-ObamaCare New York Times editorial page has noticed that price transparency is a big problem in the American medical marketplace.
Tina Rosenberg writes in today’s Sunday Review section:
Here is a basic fact of health care in the United States: Doctors and hospitals know what they charge, but patients don’t know what they pay. As in any market, when one side has no information, that side loses: price secrecy is a major reason medical bills are so high. In my previous column, I wrote about the effect of this lack of transparency on the bills patients pay out of pocket.
Here is an obvious reform that wouldn’t cost the federal government one cent and would exert an immediate and powerful downward pressure on medical costs: require that medical service providers make those chargemasters public. Market forces would instantly force the prices down towards the low end.
The natural forces that dominate an economy would do the work, and the Republicans can have the credit for lowering medical costs. What’s not to like?