Sunday, July 1, 2012

The Healthcare Ruling: the issue is back where it belongs

The aftershocks of the Supreme Court ruling on Obamacare are still rumbing around DC and the mediaverse. I've held off talking about it for a few days while I read the various responses from those who are experts in constitutional law (which, incidentally, I find fascinating.)

I think, on balance, it's a good outcome. Obamacare impresses few people in itself, of course. Even most Democrats would have preferred more of a single-payer outcome, or extension of medicare.

Obamacare also fails the most important task. The Affordable Care Act does not deal with health cost inflation - the single biggest challenge to the Republic - beyond a few pilot projects. Bending the cost curve would utterly transform the fiscal future of the United States. Without a serious effort to do that, every other thing that government does, from education to the military to interstates to the weather service, is going to be increasingly at risk. Healthcare spending will kill everything else that Democrats want to do with government. And soaring healthcare premiums are undermining many private sector companies and diverting consumer spending into inefficient and unproductive areas.

If healthcare was cheaper, universal care would be much less of a problem.

The bill is a huge, ramshackle contraption which leaves many of the most problematic features of the current healthcare system in place. Radical reform in either direction, towards single payer or a more market-oriented defined contribution system, would have been better than this Frankenstein monster.

But it should not be up to the Court to overrule the legislature in most cases. Judicial review should be a last resort. After all, overturning Congressional law is a clever invention of first Chief Justice John Marshall. It is not actually in the constitution itself. And it has grown far too extensive in recent years. The rule of law is not the same thing as the rule of lawyers.

Politicians also often use the Court as an excuse to confront deepseated problems, rather than fighting things out and resolving them in the court of public opinion.

The Court's history shows that it can often be terribly wrong - most obviously, the Dred Scott case which helped drive the country into civil war. It has often been too far behind the public, as in the 1930s and the "switch in time that saved nine." It has got too far out ahead of the public, especially Roe v Wade which ignited a socially conservative backlash which dominated politics for a generation.

There is no reason to believe that nine justices will make more just decisions than the other branches. They will not necessarily know better what makes for the common good. In fact, their decsions generally have little or nothing to do with the common good, often protecting sectional rights at the expense of the wider good. Instead, it is a kind of clerical elevation, a scholastic belief that points of law and procedure can deal with the human condition.

The Court works best when it frustrates the momentary imposition of elite opinion on the rest of the country, not when it faciliates it. That, to me, is part of the message of the Acemogulu and Robinson book we were looking at the other week. Most governments throughout history have been extractive, using power to exploit the rest of society for their own benefit. The great genius of the American constitution is it makes it hard to do that. No-one has untrammelled power.

That is part of the explanation of the Court's undoubted legitimacy from the civil rights cases in the 1950s. Congress was blocked and inactive, as long-serving Democratic committee chairs from the south blocked any legislative action. The system was gridlocked, and the Court broke that. But better Congressional rules and action would have been a better way if it had been possible. And the unintended consequences of even good policies have reverberated in damaging ways. School busing, for example, helped drive the segregation is was intended to prevent. Consequences have to be factored into legitimate public policy, not just rights or legal procedure. Fiat iustitia et pereat mundus is a deeply immoral stance.

Huge Supreme Court blockbusters which unilaterally overturn the other branches are rarely a good thing. The Court should be able to delay, force a rethink, balance different states or deadlocked lower courts. But not impose positive policy of its own.

And in that light, the Roberts decision has returned the issue to where it belongs - the 2012 election and Congress. Republicans will have to come up with a better alternative.

So far they have not. I don't believe the GOP has had a sensible line on this. It's all very well to talk about market forces, but we simply don't have real market forces in healthcare at present. Talking about the market in the abstract just irritates me, given it requires willful blindness to the failure of the healthcare market as it actually exists. The health insurance companies are inefficient, greedy and economically useless. They compete by skewing the pool of insured, not in terms of quality or cost effectiveness. The whole system is dizzyingly expensive, wasteful and it undermines both public finances and private sector competitiveness. It is a disgrace to the private sector.

I had a routine checkup a few months ago. It took three months and six letters to get the doctors' surgery and the insurance company to sort out their billing codes and pay for things properly. It took hours of my time. The system is a disgrace.

And I am a little bored by GOP fulminations on the individual mandate, especially when most of that came from GOP sources like the Heritage Institute. It prevents adverse selection, so it makes economic sense. But more importantly, the problem with it is it forces the young to subsidize blatantly crazy overspending on uncontrolled healthcare costs for the old.

The cost of healthcare is the heart of the problem. Period. Fix that, and everything else works. If you don't fix that, then nothing you do is more than a stopgap along the way to disaster.

The answer has to be innovation. That is what the private sector is good at, not entrenching some kafkaesque private sector bureaucracy that tries to compete by shirking obligations. There needs to be a productivity revolution in healthcare. I remember going to a conference and someone saying the next billionaires, the next Bill Gates or Steve Jobs, will probably be the people who can use technology and other means to solve some of these cost problems in the health sector.

But for that to happen, there needs to be an open playing field, not a court-imposed structure. And there needs to be discussion of the big issues of how to make choices of who gets what.

It increasingly seems to me that many of our biggest economic problems are caused by sidestepping ethical or moral problems. This is a prime example. We have to confront the fact that no amount of spending can deliver immortality. We have to talk about what we want. We have to talk about the purpose of health spending.

Right now, a disproportionate amount of spending is on futile and painful interventions to prolong the lives of the terminally ill for two or three months, often against their will. That is, in essence, what we are buying with our trillions on healthcare, at the expense of working families without cover, higher taxes and education stripped bare. There has to be some relationship between means and ends. We have to know when to let go. Incidentally, it is the GOP who have done most damage in this respect with their silly talk of "death panels".

There should be more open discussion of different tiers of coverage, and selective coverage of different procedures. Everyone should have access to standard medicine at very low cost. If they want more than that, they should make their own arrangements.

And the employer-based system and the associated tax expenditure is clearly stupid. Healthcare needs to be separated from employment once and for all, for the good of both individual Americans and companies.

So: healthcare is still a mess. But the political system has to to deal with it. And it is a good thing the Court has left it to do so.




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