Opponents of the Affordable Care Act predict the law will play out in four steps:
- Put government in charge of healthcare.
- Be shocked by rising costs.
- Begin micromanagement and cost controls.
- Endless pain.
Massachusetts, the model for the federal law, seems to have moved to step three, with a vote set this week on measures to contain runaway healthcare spending. We’ll see if step four is next.As the Wall Street Journal report suggests, the legislation involves significant government oversight of the healthcare system and a major expansion of government bureaucracy:
If the measure is approved . . . [a]ll health-care providers would be required to report financial performance, market share, cost trends, and quality measures to the state.A new oversight agency would monitor how providers are doing at controlling costs and provide reports on cost trends—information that will be used to develop further policy.In addition, the bill charges the state’s attorney general, Martha Coakley, with monitoring trends in the health-care market, including price variation, though it doesn’t require her to take action. Ms. Coakley, a Democrat, has been a critic of hospitals that use their brand and clout to charger higher prices that aren’t justified by quality.
Nobody really knows what the answers to America’s healthcare problems are. Rapid technological change means that any system that exists now will likely be unworkable in 30 years. As the population gets older it will require more healthcare per capita. Scientific advances will make more sophisticated treatments available, threatening to drive all existing healthcare systems to bankruptcy sooner or later.Radically restructuring the way healthcare works seems to be the only way out.Existing economic interests—pharmaceutical companies, employee guilds like doctors and registered nurses, insurance companies, state and local government, and so on—can create political gridlock and stop real change. Thus markets, rather than government planners, seem most likely over time to create the innovation we need.Backers of government-run healthcare, including the single-payer concept, think regulation by government and intelligent planning will work better. I think that these people are well-intentioned but wrong. If we follow their suggestions, we are more likely to end up with something like the U.S. Postal Service than a high-tech, streamlined medical system that can work in the future. This is not because governments can never do anything right, but because the American political system works the way it does. Other countries, usually smaller and more homogenous ones, can do these things better. Approaches that might work in Denmark don’t work well here. The messy compromises and one-size-fits-all solutions that usually come out of Washington generally can’t provide the kind of guidance our healthcare system needs.But nobody knows how things will work out. Given political and social realities, government has a role to play. There is no way that the United States can come up with a true free market approach. It is conceivable theoretically but impractical from a political point of view. So we are stuck with a messy, mixed system.Massachusetts, thanks in part to Governor Romney, offers us a picture of what the future might look like if the Affordable Care Act survives to shape the future of American healthcare. I don’t think the picture is going to be a pretty one.How do you cut health-care costs in a system with universal insurance and individual mandates guided by heavy government regulation? The issues that Massachusetts is working on now are exactly the questions the country will have to confront next if we continue on our current track.Let’s watch and learn.