[Posted by Karl]
[T]here’s a weird tendency among people to think that very banal comments are very important insights when they come from Greg Mankiw. And this is worse than a very banal comment: It’s disengaged with the debate.
Mankiw’s basic argument is that health-care reform should be better than deficit-neutral. It should be deficit-improving. That is to say, it should bend the curve in the long term. And it should! But what evidence does Mankiw have that it won’t?
In reality, the average person will wonder why we place the burden of proof on the proponent in science, legal proceedings, and so on — but not when it comes to placing one-sixth of the US economy under government control. Nevertheless, Klein presses on with his list of admittedly speculative cost-cutting hypotheses:
There’s the theory that comparative effectiveness review — particularly when combined with a new IT infrastructure that could eventually help guide physician decisions — will cut down on unnecessary treatments and allow us to bring high-spending regions of the country into sync with their low-spending brethren.
There’s the idea that the Independent Medicare Advisory Council will be the locus for a continual process of Medicare reform that will begin to bring down costs in the Medicare program, and also create a sort of “best practices” laboratory where experiments can be attempted and the best efforts can be further developed.
There’s the argument for the public plan, and in particular the public plan with Medicare powers, that implies that a large purchaser in the center of the system could bargain better discounts with providers.
There’s the argument that the health insurance exchange will grow to become the primary insurance market and that as insurers begin competing on grounds of cost and quality — as opposed to risk selection — that efficiencies will emerge and spending will drift downward, and over time, the employer-based market, which is responsible for many of the costly problems in the system, will begin to migrate toward the exchange.
At Corrente, lambert lambastes these speculations on their (lack of) merit from the Left. It would be just as easy to do so from the Right. However, it is simpler to point out that Klein’s arguments for cost-savings — rationing by unelected bureaucrats, arbitrary price-setting through unfair competition from the government, forcing people to buy government-designed insurance in government-created “markets” — are all reasons why public support for a government takeover of our healthcare system is waning every day (most recently evidenced in the USAToday/Gallup and Politico polls). Jonathan Chait manages to one-up Klein by suggesting that Mankiw’s “understanding of American politics is rather shallow.” In reality, the “banal” observation that healthcare reform is stumbling because people do not want to pay sure costs for speculative benefits is exactly what Ezra Klein wrote earlier this month.