Thursday, December 26, 2013

Yep, #ObamaCare's 'Cementing in Place,' Which is Why Everyone's Planning for the Law's Unraveling

You gotta love the subliminal messaging at the New York Times, "As Health Law Cements Its Place, G.O.P. Ponders How to Attack."

That's clever headlining, especially how it implies that Republicans will have a hard time replacing ObamaCare once it's all "cemented in place." The piece even quotes Republicans who stress that any reform must account for those now covered by the ACA. At least Republicans care about people not losing their coverage. And as for that "cemented in" part, you'll have to ask the president himself, who treats little of the law as permanently settled. (See WSJ, "Flurry of Tweaks to Affordable Care Act Leaves Insurers Rattled," and "Health-Insurance Deadlines Keep Slipping.")

And interestingly, Phillip Longman and Paul Hewitt, at the far-left Washington Monthly, are looking well beyond ObamaCare with little expectation that the law will restrain healthcare costs. The authors double-down on government fail, however, saying that federal regulators should simply come in and set prices for the entire national healthcare system! See, "After Obamacare."

I don't know what's going to happen with the law, but I'm intrigued with the recent finding at the Reason-Rupe Poll, "Americans Want to Go Back to Previous Health Care System..."

Frankly, polls show that Americans think anything's better than ClusterCare.

But the left doesn't have a way forward. It's a holding pattern for the White House now, with the left hoping the bad news fades away in time to minimize Democrat midterm losses next November. And 2016's still a long ways off.

Meanwhile, some form of market-based reform's needed to get the healthcare system back on track towards quality and affordability. I think this piece by John Cochrane at WSJ is one of the best on this I've seen, "What to Do When ObamaCare Unravels":
The U.S. health-care market is dysfunctional. Obscure prices and $500 Band-Aids are legendary. The reason is simple: Health care and health insurance are strongly protected from competition. There are explicit barriers to entry, for example the laws in many states that require a "certificate of need" before one can build a new hospital. Regulatory compliance costs, approvals, nonprofit status, restrictions on foreign doctors and nurses, limits on medical residencies, and many more barriers keep prices up and competitors out. Hospitals whose main clients are uncompetitive insurers and the government cannot innovate and provide efficient cash service.

We need to permit the Southwest Airlines, LUV 0.00%  Wal-Mart, WMT +0.49% AMZN -0.22%  and Apples of the world to bring to health care the same dramatic improvements in price, quality, variety, technology and efficiency that they brought to air travel, retail and electronics. We'll know we are there when prices are on hospital websites, cash customers get discounts, and new hospitals and insurers swamp your inbox with attractive offers and great service.

The Affordable Care Act bets instead that more regulation, price controls, effectiveness panels, and "accountable care" organizations will force efficiency, innovation, quality and service from the top down. Has this ever worked? Did we get smartphones by government pressure on the 1960s AT&T T +0.60%  phone monopoly? Did effectiveness panels force United Airlines and American Airlines to cut costs, and push TWA and Pan Am out of business? Did the post office invent FedEx, FDX +0.92%  UPS and email? How about public schools or the last 20 or more health-care "cost control" ideas?

Only deregulation can unleash competition. And only disruptive competition, where new businesses drive out old ones, will bring efficiency, lower costs and innovation.

Health insurance should be individual, portable across jobs, states and providers; lifelong and guaranteed-renewable, meaning you have the right to continue with no unexpected increase in premiums if you get sick. Insurance should protect wealth against large, unforeseen, necessary expenses, rather than be a wildly inefficient payment plan for routine expenses.