Two Columnists on Healthcare Reform

Here are two contrasting reactions to President Bush's healthcare reform proposal from people who should know something about economics and policy, one a columnist for the Wall Street Journal and the other a columnist for Bloomberg. Holman Jenkins thinks the proposal is exactly what is needed and claims "you'd be shocked at how quickly the system [meaning the insurance industry] would right itself." John Berry thinks that the plan would do more harm than good. While I have a definite view on healthcare policy I like to think I am open to any and all policy proposals, which is why I read Berry's criticism carefully three times to try to understand it. Unfortunately I can't figure out what he is talking about, except for the obvious logical error he makes at the start of his analysis. He claims that "[t]he president and his advisers seem to think that if you have what they call a ``generous'' health-insurance plan through your employer, you routinely take advantage of every provision even if not needed." I've never ever heard anybody claim that is what is wrong with our healthcare system, certainly not anybody advocating anything similar to what the President is advocating. In fact, the opposite is true, most insurance policies that people buy today are larded up with coverage components that they will never use but which they pay for. Men bear the costs of single moms having babies and women bear the cost of men getting treated for prostate cancer. Non-smokers bear the cost of lung cancer and grandmas bear the cost of birth-control. Furthermore it is not that we use every feature of our insurance that drives up cost, it is that when we do get sick we often overuse services in the process - we take too many diagnostic tests, we try too many drugs to see what works, we see too many doctors. We do this because we have already paid for the care and we want our money's worth now that we are in the system. Essentially, we've already paid for the grocery to stock the shelves, once we enter the store we are inclined to just put items unthinkingly into the cart. The essence of President Bush's reform is to undo the perversion of the tax code that ensures that healthcare insurance companies see IBM or General Motors as their customer not Joe Worker or Susie Secretary as the customer. That is the problem, right now Aetna and all the rest of them aren't focused on me, they are focused on my employer. If there is a critique of President Bush's proposal it is that it doesn't sufficiently let consumers get around the needless and expensive mandates imposed by state regulators by establishing a national market for health insurance.