Two Ways to Talk About Health Care Reform

The debate over health care reform is only in its larvae stages, but even among its advocates, it seems to me that there are two distinct methods to debating its impact on the budget. The first relentlessly seeks realistic, but politically unpopular, ways to pay for universal care. The second looks to pass health reform first and pay for it later. Who's winning?

The first way to talk about health care reform is to enumerate exactly where we are going to come up with this money in the first place. Catherine Arnst from BusinessWeek distills this argument neatly down to a sentence:

When considering proposals for extending health-care benefits to 47 million uninsured, keep in mind that there are only three ways to pay for universal coverage: Raise taxes, cut payments to medical providers, or ration care."

As Arnst points out, there is an inauspicious silence on all these methods. Some writers will admit that taxes have to go up sometime, certainly on the rich, and maybe on many more. Ezra Klein has argued that rationed care has worked in places like England, and Orszag seems to be peddling the more-is-not-better argument before Congress. But it seems impossible that a health care reform bill could come with the word "rationing" on the label. This is America. More is more, period.

Another argument is that we don't need to pay much attention to the politically impossible cuts, because spending more money now will save us money later. So we have Jonathan Chait and Jonathan Cohn of The New Republic citing a Commonwealth Fund study that sees Obamacare saving $3 trillion in 10 years, and a paper by an Obama economist saying electronic medical records alone will save $600 billion in the next decade. Chait doesn't mention any methods for saving money upfront. Cohn finds them, names them, and ends with calling them "tough political tasks." In other words, spending now is saving later. Subtraction-by-addition is the new fiscal conservatism.*

I hope the TNR's Jonathans are right. And their studies could be 100% accurate, or even understate the benefit of expanded, streamlined care. But projecting savings in health care just such a game. Remember when health care officials gathered in DC to say they discovered $2 trillion is savings? That seemed fishy too, and a Slate analysis found that their promises would realistically only save about $4.32 billion. That's not a rounding error, that's 99.98% lower than advertised!

I'm of the mind that health care reform is issue 1B after stabilizing the financial sector. But the gravity and necessity of health care reform should not obviate the also-necessary debate about where we're going to find the money now.

*Subtraction-by-addition (that is, saving a lot of money later by spending a lot of money now) is also, it seems to me, the philosophy behind education reform and climate change policies.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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