Are Conservatives Really Worried About Cost Controls?
In many ways, I think Tyler Cowen's critique of health reform is the right one: It is certainly plausible that the final bill will include a pricey expansion of coverage paired with a speculative and uncertain set of cost controls. But it is baffling to watch him blame this on the Obama administration. As he himself says, the White House is firmly behind the most promising proposals on cost: The efforts to tie Medicare's reimbursement rates to the cost-effectiveness of different treatments and initiatives to give MedPAC the power to aggressively reform Medicare. But those policies are not certain to exist in the final bill.
What stands in the White House's way is Congress. And, more often than not, it's the Republicans in Congress. Liberals, after all, will sacrifice almost anything to radically expand coverage. This leaves cost-conscious conservative facing a bit of a dilemma. They can attack the most vulnerable parts of the policy -- the cost controls -- in the hopes of bringing the whole thing down. The downside to that, of course, is that liberals simply jettison cost-controls to protect the coverage expansion. For a fiscal conservative, this should be considered the worst of all worlds.
Conversely, they could resign themselves to the coverage expansion and offer their support in return for stringent cost controls. Given that Peter Orszag and his colleagues are transparently desperate for more aggressive constraints on Medicare's spending, it seems pretty likely that the White House would deal. But thus far, I've seen no evidence of that strategy. Indeed, I've mainly seen complaints against the public plan, which would make health care cheaper, and the taxes meant to pay for the coverage expansion, which ensures that health reform won't add to the deficit.
Cowen, of course, is one of the nation's most respected conservative economists. He has agency here. And given that his op-ed expresses support for the bulk of the White House's cost containment strategy, it's surprising to me that he chooses the quixotic strategy of convincing Barack Obama to abandon health reform, rather than convincing the Republicans in Congress to improve it.
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