Krugman on Health Care Reform

krugman.jpgOver the weekend I finished Nobel laureate Paul Krugman's excellent The Conscience of a Liberal, which I will examine at length tomorrow. Today I want to discuss one particular chapter of the book, in which Krugman argues that the most important issue on the liberal agenda should be "completing the New Deal by providing Americans with something citizens of every other advanced country already have: guaranteed universal health care."

What follows is as good a 30-page summary as exists on the current problems with the health care system, the reasons Democrats failed to fix it in 1993-94, and what the current plans on the table involve:

The fact is that every other advanced country manages to achieve the supposedly impossible, providing health care to all its citizens. The quality of care they provide, by any available measure, is as good as or better than ours. And they do all of this while spending much less per person on health care than we do. Health care, in other words, turns out to be an area in which doing the right thing morally is also a free lunch in economic terms. All the evidence suggests that a more just system would also be cheaper to run than our current system, and provide better care.

Krugman demonstrates how Americans get less service for more money (with a couple cites to Ezra Klein for good measure; go Ezra!), explains the mechanics and costs of our private insurance-based system, shows how this has led to crisis over the past two decades, examines why reform failed in 1993-94, and how things could be different this time. He gives a great outline of why a single-payer system (akin to Medicare for everyone) is both economically superior and political impossible, and then describes the more feasible alternatives that liberals have crafted, based on four elements: 1) community rating, 2) subsides for low-income families, 3) mandate coverage, and 4) public-private competition. While the details are negotiable, Krugman says "the important thing is that universal health care looks very doable, from an economic, fiscal, and even political point of view."

In facft, we have seen a remarkable confluence of opinion that in the midst of all our other economic problems, health care should be a priority. Charles Morris singled it out at the end of a book focused on the financial crisis. Krugman highlights it as the single issue that can renew the promise of liberalism. President-elect Obama hammered the health care issue home in his advertising and the debates (remember when he called health care a right and discussed his own mother's illness?), and it showed: the public trusted him by wide margins on health care, and now they expect reform.

And it looks like they'll get it, if the President-elect's personnel choices give us any sign. Last week I highlighted the choice of Tom Daschle as HHS secretary and White House health care reform czar. Other good signs include the appointment of Peter Orzag to head OMB, since as Ezra points out:

Orszag will be coming from the Congressional Budget Office, OMB's legislative cousin. There, he's shown an almost single-minded focus on health care reform. He's added dozens of health care analysts to the staff, reconstructed the health policy division's management structure, and is readying to release two major books on health policy options and CBO's health care scoring models that will be extremely central in how Congress looks at building a health care bill. Amidst all that, he's toured the country giving a slide show about the problems of the health care system, the overwhelming danger it poses to our fiscal condition, the incredible inefficiencies that beset the delivery, and the research that suggests reform could not only save money but also improve care. He's also acted as a powerful and credible counterweight to those who counsel incrementalism, or delay, on health reform.

And for the progressives decrying the key role Larry Summers looks to be getting in the White House economics shop (based on a lot of silly nonsense, in my opinion), it is worth mentioning that he is "a true believer in health care reform, both as a way to alleviate economic insecurity and to address the country's long-term fiscal crisis."

With the public clamoring for change and the new President-elect and Democratic majority in Congress ready to deliver, things should go smoothly, right? Don't count on it. In fact, expect all out war. Because this is not just about health care. It's about the public's confidence in the liberal welfare state as we know it. As Krugman says, if Democrats enact effective universal health care:

Universal health care could, in short, be to a New Deal what Social Security was to the original--both a crucially important program in its own right, and a reaffirmation of the principle that we are our brother's keepers.

It is for this reason that Republicans blocked reform under Clinton, as Krugman mentions, and Steve Benen laid out in a blast-from-the-past post about a memo Bill Kristol circulated to congressional Republicans in 1993 opposing the Clinton health care plan because "Its passage will give the Democrats a lock on the crucial middle-class vote and revive the reputation of the party." Krugman explains Kristol's motivation:

[H]is main concern, clearly, was that universal health care might actually work--that it would be popular, and that it would make the case for government intervention... The most dangerous government programs, from a movement conservative's point of view, are the ones that work the best and thereby legitimize the welfare state.

And we are seeing exactly the same rhetoric again. After a US News editorial favorably quoted a Cato Institute blogger's argument that "Blocking Obama's health plan is key to the GOP's survival," Hilzoy summed up the state of thinking in the minority party:

Pethokoukis and Cannon claim that if Obama succeeds in passing health care, then people who might have been conservatives will like it, and will be more likely to vote for the people who passed it. This is unexceptional. An honest conservative might accept this claim and say: well, I guess our ideas are unpopular, so we'll just have to make our case more persuasively.

But that's not the conclusion they draw. Pethokoukis and Cannon say: because people will like health care reform, if we do not block it, our party will lose support. So precisely because people would like it if they tried it, we need to make sure that it fails.

The self-perpetuation of the Republican party, is, at this point, its only purpose.