The key to the Obama administration’s new higher-ed plan is turning that question around: Perhaps, they think, the subsidies are actually the solution.The idea isn’t to funnel more money into these sectors. It’s to use the existing money differently. If the government is going to pay, then perhaps it can use its huge market share to do what consumers can’t: Say “no,” or at least be more cautious about when it says “yes.”This is the core cost-control idea behind Obamacare. The government is using the money it spends for Medicare and Medicaid to try to push the health-care system away from fee-for-service medicine and toward pay-for-performance.
In other words, both the educational plan and Obamacare will work by reforming the provider side of the system, because the consumer has no leverage in the market. How this will work for education remains to be seen, but if the ACA is any guide, it will widely miss the mark.Klein cites some stats to prove that the ACA provider-centric model is working, mainly that overall health care spending has been slowing down nationwide. But that slowdown has much more to do with consumer restraint than anything the ACA has done, as study after study has shown. Indeed, it seems like consumer-based reform is not only possible, contra Klein, but the best thing we’ve yet seen in the American context for lowering costs.