h/t Gordon Crovitz in Obamacare’s Serious Complications
From Silicon Valley to Wall Street, simplicity is the new watchword. Books with titles like “Simple: Conquering the Crisis of Complexity” and “The Laws of Simplicity” are must reading in boardrooms. Companies aim for the elegance of Apple’s design and Google’s search box. Then there’s ObamaCare.
The functional failures of the Affordable Care Act websites are well-documented, but the fundamental flaw is the law’s mind-numbing complexity. The officials who planned ObamaCare blame their Web engineers, but they’re passing the buck. ObamaCare is a hugely complicated approach to addressing problems in health care that have simpler solutions…
The complexities of ObamaCare make it less likely to achieve its goals, but the broader point is that health-care reform didn’t have to be this morass. Liberals and conservatives agree on the two big problems in health care, an industry that accounts for 18% of GDP: that almost 50 million Americans don’t have health insurance, and that employer-provided coverage gives patients little incentive to monitor spending. Even if Americans want to control costs, they have almost no information to let them compare prices.
Both problems grew out of World War II wage and price controls. Companies got around wage controls by providing health insurance, which Washington has treated as an untaxable benefit ever since.
The result is that employees have been largely insulated from the costs of health care, most of which have been paid by employers. That means there is no functioning market. There is little transparency of pricing for medical services, devices or drugs. Pricing fluctuates wildly depending on whether the patient has insurance or what deal the insurer happened to cut with the provider.
Have you ever seen a price list in your doctor’s office or at a hospital? Probably not, except for services like laser eye surgery and elective plastic surgery, which aren’t covered by insurance. In these rare cases, there is price transparency and open competition.
As hospitals have merged to cope with the costs of increasingly complex regulation, competition has further diminished. This is a reminder of the truism that monopolies can only be sustained when government policy supports them.
Simpler reform would provide subsidies for the uninsured while encouraging transparency in health-care costs so that Americans can become better-informed consumers. That simpler approach, alas, is for a future government.