Three weeks ago Megan McArdle was annoyed. Have you ever noticed how health care reform proponents act as though there’s deep wisdom in reminding us that there is going to be rationing one way or another? “This is one of the things that most puzzles me about the health care debate: statements that would strike almost anyone as stupid in the context of any other good suddenly become dazzling insights when they’re applied to hip replacements and otitis media.” I – and others – pointed out that there were problems with McArdle’s use of the word ‘ration’. Without missing a beat, McArdle has moved on to being impressed by the deep wisdom of the thought that (envelope please): there is going to be rationing one way or another. She muses about the ironic circumstance that no one wants to utter the r-word and – long story short – ends by suggesting that reformers are particularly remiss in this regard. They want the fact that there is going to be rationing, one way or another, to be invisible. Have you ever noticed this about health care reform proponents?
Let’s distinguish two senses of ‘ration’. McArdle now writes: “One way or another, we are going to ration care, if you use “ration” to mean “allocate inherently scarce goods”. But neither side of the health care debate likes to talk about this.” On this definition, it turns out that pretty much everything that isn’t strictly from Ponyland is ‘rationing’. So this sort of rationing is a good thing, in the sense that nothing else would be realistic. It can’t be a good idea to hallucinate that limited goods are unlimited. But this is a pretty low bar to clear: namely, seeing that ‘and a pony’ is not plan. Call this the trivial sense of ‘rationing’.
Second, per my previous post: ‘rationing’ means securing for everyone a minimum share by ensuring that no one gets more than than a certain maximum share. You do the former by doing the latter. The castaways adrift on a raft with limited fresh water logic of this arrangement is clear enough. Mixing fresh water with pie: you cannot grow the pie, so you are very careful about cutting the pie into fair slices, because fairness is good; and it is especially good when being fair will keep people from dying unnecessarily. Call this the substantive sense of ‘rationing’.
No one is proposing health care rationing in the substantive sense, pretty much for the simple reason that making it illegal for granny to buy a pacemaker doesn’t make pacemakers for anyone else. You don’t ensure minimums for anyone by enforcing maximums for anyone, in this case. (Health care isn’t like fresh water on a raft that way.) So rationing in this second sense will not be explicitly encoded into into any legislation. It will not become illegal to buy a pacemaker, or buy premium private pacemaker insurance, in the event that the government does not just give you one. This is just the ‘death panels’ canard. Now, given this fact, it is not exactly surprising that those whose job is to package reform attractively are not eager to emphasize that – yes, they are in favor of rationing! Bothering to say the trivial thing is just going to make it sound like you are saying the substantive thing. Soon enough, sure enough, someone is going to ‘discover’ that the bill includes Pony Panels.
On the other hand, policy wonks and other intellectual types of a reformist stripe are under no illusions. Yes there will be rationing, in the sense that there will be non-infinite allocations of non-infinite goods. No, there won’t be ‘death panels’.
Such, such is the lot of the reformer in relation to ‘rationing’. Basic clarity about the issue. A certain difficulty with the framing.
Let’s look at this article from “First Things” that has impressed McArdle with its bold willingness to speak truth (in contrast to the shameful reticence of reformers, re: rationing): “Come, let us speak of unpleasant things. How is health care to be rationed? Who gets the short end of the stick?”
The idea, basically, is that the invisible hand of the market is better than the visible hand of government. Because you can always see what the invisible hand is doing, because it’s visible. And you can’t see what the visible hand of government is doing, because it’s invisible.
Private insurance plans sometimes include an element of implicit rationing, but because they are, at heart, contractual agreements between the insurance company and the insured are more likely to ration health care explicitly. The many pages of the healthcare plan describe what is a covered service, which providers will be reimbursed for services, the duration of coverage, the dollar limit, and so on. The advantage of explicit over implicit rationing is obvious: It gives potential customers of the insurance plan information to use when deciding which insurance plan to buy, and gives them clear expectations of services to be delivered.
The government, on the other hand, would probably make things confusing. “Rationing must occur, but it need not be admitted. Denying the truth of rationing is more common in government-run health care schemes than private ones, because the government is reluctant to have the people know this ugly fact.”
What can one say to an argument that what is preferable about the status quo – private health insurance plans – is the glorious, customer-friendly transparency of it all? (Remember the little boss in “The Incredibles”?) But let’s settle for this argument instead, for today: as things stand, a lot of people receive poor healthcare in the US, or are financially crushed by the cost of healthcare; but not because it is written anywhere – in any law or private contract – that legally, or contractually, this person is obliged to get poor healthcare, or to be crushed by the burden of paying for healthcare. It’s nothing that anyone expressly dictated, in so many words. It’s just a by-product of the system, an unintended consequence, a passive letting happen. I wouldn’t say it’s the invisible hand of the market, exactly, but it’s an invisible hand of sorts. This is consoling because it means that no one is guilty of having, specifically, deprived this person of health care. They slipped through the cracks. But no one built the cracks, in a positive sense. The cracks themselves just sort of slipped through the cracks in some higher sense. So you don’t have to think of these sorts of problems as rationing (which would imply a kind of explicit plan). Which is, on the whole, pleasant. Because it is unpleasant to feel guilty of having not allocated goods in such a way that people got what we actually feel they should get. Better if the ‘rationing’ aspect of the system is more or less invisible.
So if we are now going for unpleasant truths; if we want it to explicit about who gets the short end of the stick, surely an explicit – government-provided – minimum, a public option, would be the best way. The public option is, after all, the short end of the stick. You can top up your stick on the private market if you want a longer one. (No one is going to make it illegal to buy a pacemaker.)
I take it McArdle is now in favor of a public option?
In all seriousness: I realize I have been arguing, for several posts now, at an unsatisfactorily high level of abstraction. (I have seized on the strange case of McArdle because she started it, insisting on talking only at the philosophical level, thereby giving me an excuse to continue in that vein.) But there is a point. Philosophically, there just isn’t a case to be made against reform unless it’s this simple one: if you don’t have any money, you shouldn’t be entitled to any medicine. McArdle is very indignant when people accuse her of indifference to the fate of the poor, but – honestly – if it isn’t that, then it’s nothing. At the philosophical level.
At the practical level there are all sorts of reasons for thinking reform isn’t going to work out well: namely, because we have to be able to keep costs down long-term, but the only way to do that is to mess with the stuff people have got. But you can’t do that, in practice. Because people are loss averse. Damn, we might be stuck. Sure hope not. Still, we ought to be willing to say what the better thing would be: namely, affordable, universal, basic health care. (Not necessarily premium health care. That would be too expensive. But a solid package. Buy more if you want it.) If you don’t think that goal sounds right, say so. Don’t oscillate between saying reformers are wrong because they say rationing is inevitable and saying that reformers are wrong because they are unwilling to say that very thing. That doesn’t make sense.