If you watched CNN this morning you saw, presumably, what I saw. You saw videotape of town halls devolving into shouting matches between people on both sides of the healthcare debate. You probably also saw the signs of protestors. For those in support of healthcare reform you saw signs saying “Obamacare saves $$$” or “Everyone deserves insurance.” I’m paraphrasing slightly, but you saw signs meant to positively advocate for healthcare reform. If you looked at the protestors against healthcare reform you saw signs with a picture of Hitler and the words “Yes we can” underneath it, invoking the catchphrase of Obama’s presidential campaign. You saw signs with the words “Death Panel” partially covered by the ubiquitous and universal sign for no. You saw signs designed to frighten, or assuming a greater nobility, signs expressing the fears of those that wielded them. The debate on healthcare has devolved to a state so devoid of intelligence it is comparable only to the period right after 9/11.
What’s everyone so angry about? Call me too Midwestern, but I was watching people shout at each other in town halls and carrying signs so acidic in their opposition that I couldn’t help but wonder why people are so angry. Rumors have been started by that every elusive “them” that a government-run healthcare option will lead to “death panels” where grandma or grandpa will be denied care because the cost of treating them is greater then their societal worth as determined by a panel-to-be-named-later, though clearly for many “death panel” is the leading contender for the name. It sounds so ridiculous to me that at first I dismissed it, but when it didn’t go away I tried to think backwards. How do we get from a government-run healthcare option to death panels?
When I thought it through, here is the domino effect I presume is the “logic” that led us to death panels: Basically, if a government-run healthcare option is passed, then employers will stop providing a private health insurance option to employees. Why should they if the government going to act as the safety net? And how can they compete against the competitiveness and efficiency of a government-run system? The employer abandonment of private health insurance will drive the health insurance into the ground so that eventually even the companies that didn’t drop their private option will have to because there will be no private option. Presto, change-o we have only a government option for health care. So why does grandma have to die? Well with the exploding cost burden on the system tough choices will have to be made. We’ll need a panel full of mustache twisting, number crunching bureaucrats that will size up grandma and decide if she’s fit to contribute to society or she should be allowed to die.
Now let’s set aside some of the problems of logic here and focus on a few key assumptions on the surface. First, there has been no healthcare reform. There is no government-run option available to people to buy into. Second, the Democratic leadership and President Obama have repeatedly said that the public option is not a sole-provider, Canadian-esque system. Third, no one has talked about a panel that would deny care to the infirmed because they were infirmed. Turning to the logic, we are making some mighty leaps here and presuming an extreme level of nefariousness from our government officials. I mean that members of Congress and the President would push for a system that they fully know and anticipate will require the government to make life and death decisions requires a level of government distrust that is beyond anything I felt during the darkest periods of the Bush administration. If the path I presented above is not within reason, what is?
Okay, so here comes the econ lesson. There are two main drivers to have a government-run healthcare option as part of healthcare reform. First, to serve as a safety net, expanding Medicaid so that people who are currently uninsured can receive preventative healthcare. The thought being if a cough can be suppressed with an antibiotic prescribed from a clinic it will be less expensive then letting that cough worsen, requiring a trip (either planned or unplanned) to the emergency room for more dramatic, invasive, and expensive care. Second, it is to make private insurers compete. I have written on this topic in the past and Paul Krugman of the New York Times writes on this all the time, but basically currently private health insurance providers operate without competition. They only compete to be the health insurance vendor for large organizations. As far as the consumer is concerned, especially if you have employer-based health insurance, you might get a lot of options in the amount of coverage you receive, but it’s all coming from the same company. It’s like going to Baskin Robbins. There are 50 flavors, but it’s all Baskin Robbin’s ice cream.
It is for these two reasons that a government-run option is essential. We need to expand the safety net and introduce competition into the marketplace. Expanding the safety net would seem a moral imperative, but the thought of competition in the marketplace is a major reason for many people government-run becomes death panel. Will some business, especially small businesses, drop private insurance for their employees? Absolutely. Is there a possibility that this government-run system will drive all the private insurers out of business? Yes, but it’s not a probability. And part of the reason it’s not a probability is because the government-run system, presumably, will not run as efficiently as a private insurance option. Opponents of healthcare reform can’t have it both ways. They can’t decry a bureaucrat will sit between you and healthcare (even though one already does) and that this government system will run so well it will destroy the private health insurance industry.
I titled this post The Party of Fear, because as the healthcare debate devolves, the Republican, conservative strategy for defeat reform has become clear. See, first they tried to remind you how bad government is, but that didn’t really take hold. So the tactic has changed. Now they want you to be scared to death of government. They put their arm around grandma and ask if you want her to be put in front of a death panel. Reform and change are things to be feared. The government is rife with evil, dark figures (allusion intended) set on running your life, removing your God-given free will, and, for kicks, killing your grandma. Once again the choice has been made to abandon intellectualism and instead embrace fear.
You know what I haven’t heard from the Republican party? A solution. So much energy has been used. So much money has been spent to tell you all the reasons the reform is bad and when mild, classic reasons didn’t work they turned up the volume. It is far easier to sit in a room and breakdown an idea. It’s far harder come up with an idea, incorporating all the different interests involved. Healthcare reform is THE domestic issue for this generation and most certainly the next.
And so I’ll make a final appeal to those Republicans willing to listen. Stop spreading fear. Come to the table with ideas and an open mind. There will be disagreements, but let them be intelligent disagreements. Something needs done and you can either be a part of the solution, or remain the party of fear. The American people are united in their desire for change, but remain unwedded to a mode. There is an opportunity.