There were two interesting pieces in the Wall Street Journal editorial page yesterday relative to the issues posed by health care reform. The first has to do with the "cost savings" that are always claimed for single payer or otherwise highly centralized plans. I have marvelled at the earnest faith with which people state that a plan like Healthy Wisconsin will save billions of dollars while covering more people and paying for more treatments. They sound as if they are reciting a law of physics.
A column by Merrill Matthews points out that, at least with respect to the total cost, there is a circularity about this. Countries like Canada and England spend less than we do for health care because the government has decided that it is all that is going to be spent. The demand for health care is determined, not by those who would receive it, but by those who will pay for it.
Substituting political demand for consumer demand is a critical issue with respect to government provided health care. It may be that Healthy Wisconsin will limit health care spending to 15% of state GDP. But it would be pure happenstance if it turns out that this is the optimum level of health care. I'd rather see that determined from the bottom up than from the top down.
The idea that expensive things can be paid for through administrative savings may not be precisely the equivalent of faith healing, but its close.
The editorial board of the Journal also criticizes Gov. Schwarzeneggger's proposed plan for California in that it requires people to buy insurance. This, they say, is a violation of free market principles and so it is.
The problem is that in most areas in which the market operates we are willing to allow people to fail. If you borrowed more than you can repay, you lose your house.
It's less clear that we are willing to let someone die because they did not buy insurance. Because we won't do that, it may be necessary to compel people to invest in their health to avoid the need for the taxpayer to do so.