Orszag forgot one thing. It’s kind of important.

Posted by Marc Hodak on May 15, 2009 under Patterns without intention, Politics | 2 Comments to Read

Peter Orszag, White House OMB director, published an editorial about the importance of containing health care costs, and how to do it.  The portion of our health care that is nationalized, i.e., Medicare and Medicaid, indeed threatens to bankrupt the country.  From this, Mr. Orszag concludes that “we” are in big fiscal trouble and “we” need to do something about it, “we” being code for “the government.”

Mr. Orszag is optimistic about what “we” can do:

Representatives from some of the most important parts of the health-care sector — doctors, pharmaceutical companies, hospitals, insurers and medical-device manufacturers — confirmed that major efficiency improvements in health-care are possible. They met with the president and pledged to take aggressive steps to cut the currently projected growth rate of national health-care spending by an average of 1.5 percentage points in each of the next 10 years. By making this pledge, the providers and insurers made clear that they agreed the system could remove significant costs without harming quality.

This kind of reminds me of Stalin’s optimism:

A Bolshevik’s word is his bond. Bolsheviks are in the habit of fulfilling promises made by them. But what does the pledge to fulfil the control figures for 1931 mean? It means ensuring a total increase of industrial output by 45 per cent.

Like Stalin’s central planners, Orszag is using this faith in government-led change to make us all into guinea pigs of centrally planned reform.  Orszag ignores the 800 lb. gorilla standing next to the guinea pig, i.e., the virtue of competition.

When one casually looks at the areas of our economy, they can judge the relative availability, variety, quality, and cost of different parts:

More competitive … More regulated/socialized

Private/Charter schools          Public schools

UPS, FedEx                                Post Office

Private railroads                        Amtrak

Phone service post-1984          Phone service pre-1984

Anything pop out?

Imagine what restaurants would look like if their menus, prices, and policies were dictated by central planners.

Never mind what they would look like if they were actually owned and operated by the government.

Unfortunately, most people can’t visualize a free market in health care because they’ve been told, and appear to believe, that our current health care system is “free market.”  To others of us, it appears as if the government is heavily involved in nearly all areas of health care, especially insurance, and that the more it has gotten involved, the worse things have gotten.

  • Kat said,

    I’ve had a little more experience as an inmate of the Soviet health care system than I would prefer and I can tell you that Orzag is completely correct. If our system is centrally planned, we can remove significant costs in the United States without harming quality if everyone remains completely healthy and does not need health care or if we go ahead and just slaughter the sick when they first present. Otherwise we’ll save costs only the way Soviet system did by not actually treating patients and resorting to advances such as wrapping wounds in honey, chewing propolis, and urinating on things (urine was a big “cure-all” – sort of like Windex in “My Big Fat Greek Wedding”). Doctors re-used everythig from syringes to catheters and surgical gloves (sanitizing consisted of boiling the item), increasing infection rates. EKGs and other routine tests were practically non-existent and surgery was performed under local anesthetic (fun if you’re getting abdominal surgery a with primitive Soviet boiled and dulled with use scalpel). Russian manufactured medicines, subject to soviet production as it was, was notoriously unreliable in both quantity and quality. To improve any of that, the Soviets would have had to spend multiples on health care than they did.

    But, I’m told we needn’t worry because it “can’t happen here” just because it happened in the USSR and Britain. We will magically achieve better health care at much lower cost. The evidence is European countries and Canada – all of whom are free riding on the American health-care consumer who is made to bare the overwhelming majority of the cost of all innovation. Who will give us a free ride to achieve an outcome better than the Soviet Union’s?

    The only thing I don’t understand is why you included a war propaganda poster which is the Soviet equivalent of America’s “loose lips sink ships” war posters.

  • Marc Hodak said,

    I thought it was an effective “don’t ask” visual, with a touch of cyrillic irony. Maybe it hit too close to home?

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