Peter Orszag Responds to His Critics
In his New Yorker profile of Peter Orszag, Ryan Lizza argued that Orszag was the Obama administration official who best represented -- and even guarded -- "Obamaism." I think you see a bit of that today over at Orszag's blog. This is his first post, to my knowledge, linking to other bloggers. And he kicks it off by linking, and respectfully responding, to criticisms made by three conservatives who he "reads regularly": Virginia Postrel, Mickey Kaus, and Richard Posner. He starts it, in other words, by reaching out to critics and trying to convince them that he understands their concerns. Call it the David Brooks strategy.
To draw out one point implicit in Orszag's response, you need to separate health care reform into two pieces. Coverage and cost. The reforms meant to expand coverage are big, expensive, coercive, and largely occur in the private market. They're things like government subsidies to purchase health insurance, individual mandates to make sure people buy health insurance, and market reforms to end the days of cherrypicking and underwriting.
The cost reforms, by contrast, are being done cautiously, cooperatively, and with a focus on Medicare. They're things like the idea to make it easier for MedPAC to reform Medicare, which Orszag talks about in his post. They're things like "comparative effectiveness review," which simply creates data on which treatments are most effective. There is no coercion attached to that data. No statute that forces your doctor to read the findings. But it's a pretty safe guess that its recommendations will be embraced first by government health programs like Medicare.
Which is why it's a bit bizarre to read Postrel writing that "if more-efficient government management can slash health-care costs by addressing all these problems, why not start with Medicare?" When it comes to cost, they actually are starting with Medicare. They hope that the efficiencies work and are voluntarily adopted by private insurance. But there's no actual mechanism to make that happen.
Most people, however, don't notice the Medicare focus, because it's the coverage issues -- insurance market reforms and subsidy costs and employer taxes and individual mandates -- that get all the attention. But another way to think of health reform is that the administration is proposing policies to reform coverage in the health care system and to control costs in the government insurance system.
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