Health-Care Madness Ensures Obama Someday Wins

Aug. 18 (Bloomberg) — To read the news wires, you would think that Democrats had failed in their campaign to widen government's role in American health care. Republicans are crowing at the news that Health Secretary Kathleen Sebelius allowed that a government insurance plan might not be necessary, in spite of its inclusion in the Obama plan.

The reality is more complicated. President Barack Obama may yet succeed in winning over enough colleagues for his plan. Even if he doesn't, government still is likely to widen its role in the health-care business. That widening may not come before Obama's mid-term, or even during his presidency. But it will come, and for one big reason: we've lost our collective mind on this issue.

In the 1950s or 1960s, a hospital felt like a safe haven — you went there and matters often improved, due to the ministrations of a minor saint, the family doctor, or a major saint, the legendary surgeon. The period seems impossibly innocent, just like the TV series, "Marcus Welby, M.D."

Because third parties tended to pay for care, patients had little concept of the cost of the treatment they received. Premiums rose, partly because patients were demanding more and partly because hospitals were shifting costs of the uninsured or the underinsured (Medicare, Medicaid) to those with traditional insurance. Cutbacks began to frustrate citizens and doctors.

Managed-Care's Promise

Then came the famous health-care crisis of the early 1990s. Secretary of State Hillary Clinton, then first lady, put forward her own plan, a program that seemed likely to widen government's role. Lawmakers in Congress rejected it. Private-sector fans argued that the innovation of the health-maintenance organization and managed care would realize the cost savings the Clintons had envisioned. Managed care would solve the crisis.

Very few would argue today that managed care has ended the crisis. Many Americans are more frustrated now than they were in 1993. What managed care did, over time, was to convert Marcus Welby's friendly office experience into something like the experience of a bad airport, or a Division of Motor Vehicles office. Get in line. Wait. Get a speakerphone, so you can do other things while the insurance company has you on hold.

The first complaints are usually about money and time, but there has been worse damage in terms of civics. One of the games that Medicare and managed care both play is to try to trick patients into believing their choices are proliferating at a time when the choices are actually diminishing. That's disconcerting all by itself.

Riding the 'Float'

Another tactic that insurance companies have specialized in lately has been to act like the furniture stores of yore. They collect payments early and make their own payments late, hiding under a bush when customers come around and profiting from the "float." Interview Americans about what they recall of health care in the past decade or two, and most will cite the battles with bureaucracies to get even routine care.

The shift has found expression in our television life. The popular shows now are not "Dr. Kildare," or "Marcus Welby, M.D." They are shows like "House." "House" features a drug-addicted sex maniac of a doctor whose genius is thwarted at every turn by hospital functionaries. Many of the scenes in "House" are conveniently set in the emergency room, which enables the protagonist to order up zillions of pricey diagnostic tests without a thought to insurers' approvals or Medicare protocol.

"House" is a post-managed-care fantasy about how life might be without Medicare, Medicaid, and managed care. In the 1990s the health-care crisis was all about coverage; now it's all about betrayal.

Telling Lies

"And then I was lied to," said a man who confronted Senator Arlen Specter at a town hall over health care last week. The citizen was talking about his own individual health-care experience. But his line resonated because it neatly captures our national health-care experience. What stood out, too, was that the citizens weren't offering alternatives to the administration plan. The town halls weren't substantive rebellions; they were yowls.

Some will say this rage will slow the rise of government care. The opposite is more likely, precisely because people are no longer at the stage of reason. A truthful government service may seem more welcome than the disingenuous and illogical network that is the current arrangement.

The longer voters have to wait for relief, the more likely they are to be willing to accept whatever the government offers. Citizens are just desperate enough that the very idea of having one interlocutor — government — instead of the many in today's system is deeply alluring.

There are other factors. Merely knowing that all those MRIs and other scans we see on "House" are possible makes us want them. And that in turn, at least under the current system, drives up the health-care bill. Very few of the town hall citizens who spoke up said, "I want to pay for these myself."

Demography also plays its role. As the country ages, more citizens will move onto Medicare and fewer will be in the workforce. More of us will be sick and demand more. For markets fans, it is no moment to crow. Health care is another one of those instances in which time is on the government's side.

(Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression" is a Bloomberg News columnist. The opinions expressed are her own.)

© Copyright 2009 Bloomberg

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