The Bad Politics of Health Care Reform

Fareed Zakaria is an admirably efficient thinker and simple writer. Tis a gift to be simple, but tis not a gift to oversimplify, and sometimes the straitjacket of column inches puts the squeeze on complex analysis. Here's a paragraph on health care from his latest column on Tuesday's elections and America's resurgent centrism:



There are two great health-care crises in America--one in-volving coverage and the other cost. The Obama plan appears likely to tackle the first but not the second. This is bad economics but also bad politics: the crisis of cost affects 85 percent of Americans, while the crisis of coverage affects about 15 percent. Obama's message to the country appears to be "We have a dysfunctional health-care system with out-of-control costs, and let's add 45 million people to it."

This is becoming the key moderate critique of health care reform as it moves closer to passage: HRC doesn't fix the cost crisis for families, or the federal government.

But this paragraph deserves a follow-up question. Why is it so difficult to reform the cost structure of health care? The answer is: Nobody will allow it.

The sure-fire way to control costs is to wrest profits and services from key constituents and challenge our prohibitively expensive fee-for-service system. But there's a catch. Cut doctor reimbursements, and you lose the AMA, rural hospitals and rural Congressmen. Cut services, you lose the AARP, which is political jargon for losing -- period. Even with a historic Democratic majority, it's a bare-knuckle brawl trying to tax rich insurance plans. Like I wrote, benefits are sticky, and elections are frequent, and it's very, very hard to tell key groups that their meal ticket constitutes "waste and abuse," because they'll disagree and vote your party out of office in a year.

In short, Zakaria might be right that this health care bill has a dysfunctional message for voters. But look at the larger picture. In health care, now and for the foreseeable future, it's all bad politics.

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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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