GRRR!!! (or, Obamacare needs more Obama and less care...)

Generally, I consider Clive Crook to be the smartest, most reasonable conservative on the Internet (perhaps it's because he's British, and therefore not afflicted with the gnawing fear that "government spending" = "black people raping your family and burning your house"). And though I typically avoid thinking about health policy like a Fox News commentator avoids thinking, I'm afraid I'm starting to agree with what Crook writes in this column:

[T]he president’s message is at odds with the product taking shape in Congress. This is all about controlling costs, he says: without reform, healthcare will bankrupt the country. That would be an excellent line if Congress was seriously trying to build control of costs into its bills, but it is not. Widening coverage is the priority. So it should be, you might argue – but in that case the president has to sell access and health security as things worth paying for, an entirely different proposition.

Every measure on the table would increase costs. The administration, despite all it says about “bending the curve”, is demanding only deficit-neutrality over 10 years. Every time Mr Obama stresses cost control, he diminishes his credibility.

The upshot: while Obama talks about cost control and reforming the "fee-for-service" model - things that pretty much everyone agrees need to be done - the Congressional plan seems to focus mainly on expanding coverage. "Obamacare," as it's shaping up, does not seem to fit very well with Obama's real health care vision.

We seem to have two basic health care problems in America. Problem #1 is that lots of people are uninsured. Problem #2 is that even those who are insured often get crappy care and pay way too much for it.

The reasons for Problem #2 are many, but the basic flaw seems to be the "fee-for-service" model, in which doctors are paid to do more stuff instead of to make people healthier. This increases costs and decreases quality. It also provides a huge incentive for insurers to deny claims. If we switched to a payment-for-results, as Obama says every time I see him talking about health care, it would not only increase quality and decrease costs, it would give insurers an incentive to approve claims (because healthier customers means a reduced chance of really big claims in the future).

What's more, solving Problem #2 would go a long way toward solving Problem #1, since if costs went down it would be a lot cheaper to insure the uninsured. People would be much more likely to support a public option - or even full nationalization - if costs seemed to be coming under control

However, from all accounts, the main focus of the reform bills now being pushed through Congress is on Problem #1. The basic idea seems to be to provide universal public insurance, paid for almost exclusively by taxes on the rich (rather than by eliminating the tax exemption for employer-provided health care, which is the first thing we should do). This focus has big political and policy downsides.

First of all, it's going to scare the heck out of any American who's worried about the national debt; due to Problem #2, our health care is much, much, much more expensive than health care in countries where costs have long been under control, and therefore a national health service will cost much, much, much more here than in England or Japan or France or Germany. It will push up the debt. That is scaring people; it is also throwing a wrench into Obama's plans to restore long-term fiscal responsibility.

Second of all, paying for national health service exclusively with taxes on the rich is going to cause rich people to fight the plan tooth-and-nail. Now you may say "Those evil rich, screw em! I will ride my white horse Bucephalus over their mangled bones!", but the fact is that rich people have the money and the time and the motivation to slow down and water down not only health reform but other Obama initiatives as well. Reforming America's institutions becomes much harder if it's done in a way that pits different segments of American society against each other; it's just much smarter to go for the Pareto improvements first.

And Clive Crook is right when he says that the differences between Obama's rhetoric and Congress' reality makes Obama look like a weak leader. That is something we can ill afford, because the line of problems waiting to be solved after health reform is long and grim.

It seems to me that the way to do health reform is first to control costs, and then create universal public health care once costs are seen to be falling. But Congress seems to be putting the cart before the horse, and in doing so is endangering Obama's credibility in the bargain.

Update: Senate Democrats, apparently thinking along the same lines as Crook, have dropped universal coverage from the health bill.