To Your Health, Part 1

Health care reform, not my jam, but I thought I ought to bone up a little so I bought a book that looked good by two health/econ academics. It's "We've Got You Covered," by Liran Einav and Amy Finkelstein of Stanford and M.I.T., respectively.

Although it flouts the old dictum, "Don't judge a book by its cover," which I do all the time (doesn't everyone?), the blurbs for the book are not encouraging. The lead is from the notorious Professor Emily Oster. Others come from Matt Yglesias, no comment necessary, and Harvard reactionary economist N. Gregory Mankiw.

They choose to run the thought experiment, if we were building a new system for the U.S. from scratch, what would we like to do? There are two ways to take this. One is that it's an interesting, useful question. I want to know their answer. They claim to be foursquare in favor of universal coverage, in keeping with the title of the book. I'll get back to that later.

The less favorable interpretation goes to the pitfalls of incremental reform. The authors have a batch of horror stories about how the complexity and inconsistency of eligibility rules make a nightmare for patients. They use that to bolster the idea of wholesale reform. This argument doesn't quite fly. Their own scheme is far from a patchwork, but its simplicity is deceptive.

First of all, setting a basic package of universally-covered services still creates a seam between what is covered and what is not, the same problem afflicting the existing, patchwork system.

Secondly, the incompleteness of their scheme merely offloads the myriad problems they describe to the private sector. They would leave everyone to the tender mercies of private health insurance companies.

Thirdly, while incremental additions to supported benefits are inferior to . . . more benefits, they are better than no incremental addition. In policy analysis, a no-no is comparing real-world changes or existing arrangements to ideal ones. The comparison is of limited value, since the ideal is unavailable. That's why they call it ideal. The bigger problem with incremental changes is that they can go either way.

It's interesting to see that while the profit motive inspires private insurers to find ways to deny you coverage, there are parallel pressures on public benefit programs. Competition for public dollars, including for tax cuts, generates budget pressure that leads to exceptions and interruptions in public coverage, and profound financial trauma for patients' families.

Fourthly, imagining a system whose design escapes politics is another case of economists assuming a ladder to get us out of the hole of the U.S. health care system. To be sure, cheap politics -- politicians justifying impractical arrangements that sound good to the uninformed -- brought us to our present pass. But it is of limited value to abstract from it entirely.

The authors cite a dictum from the long-departed right-wing economic icon Milton Friedman, to the effect that the reformer's job is to describe the ideal and wait until the public sees it as essential. In practice, that's a formula for paralysis, something that the old fox probably understood and appreciated. This is also easy to say for someone enjoying very good insurance (as I do).

A useful point made by the authors is that the U.S. already has a de facto social contract, that all should have access to medical care, regardless of ability to pay. To be sure, the system works badly and is full of holes and exceptions that impose high costs of compliance (e.g., filling out forms to apply for benefits). But there is a system. That points to a political basis for making a better system. There's a reason even Donald Trump was at pains to promise that his preferred health care reform would not let pre-existing conditions prevent someone from getting support for treatment.

I also like their discussion of how public sentiment favoring medical benefits flowed from ideas of "moral emergencies" and of "the deserving poor." This came up vividly in discussions of compensation for victims of 9-11. A man with the misfortune of being in the Twin Towers at the wrong time was thought to deserve something that a man hit by an equally random bus did not. These questions come up in the matter of disaster relief. They are vividly brought out in a book by Kenneth Feinberg, a man deeply involved in administering such relief. He talks about it in his first book.

More later.