Last month, I debated the direction America should take in reforming its health care sector with Prof. Hugh Waters of Johns Hopkins University’s Bloomberg School of Public Health. We squared off in front of students and faculty at Colby College in Waterville, Maine, under the auspices of the college’s Goldfarb Center for Public Affairs and Civic Engagement. Those interested can find more information here or listen to the debate here.

Earlier this month, I spoke at a Federalist Society event on a panel titled, “Health Care: How Our Tax Laws Affect How Health Care is Paid for and Delivered,” with Bob Helms of the American Enterprise Institute and Prof. Amy Monahan of the University of Missouri-Columbia. (Mark Pauly of the University of Pennsylvania was scheduled to speak, but had to cancel.) For the most part, I plugged my Large HSAs proposal. Those interested can watch or listen to the forum online.

USA Today reporter Dennis Cauchon is an expert at distilling complex data about governments down to bite-size pieces. Today he finds that:

Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That’s nearly $500,000 per household.

When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.

Kudos to USA Today for running such hard-data stories on the front page. Too many newspapers opt for the “human interest” angle when reporting on government economic policy.

Cauchon’s data raises many questions. For one, how could governments have gotten away with imposing $62 trillion of unfunded obligations on young Americans?

At the state and local level, taxpayers have been sleeping as union-backed politicians have jacked-up compensation levels for the nation’s 16 million state and local workers. 

The Washington Post pointed to an example of state and local irresponsibly yesterday. The paper lambasted Montgomery County, Maryland, for its “staggeringly generous” compensation increases for county workers, increases that will add to the $62 trillion total and likely push up county taxes down the road. 

The Church of Universal Coverage is whipping itself into a fervor over the Healthy Americans Act (S.334), a piece of legislation originally introduced by Sen. Ron Wyden (D‑OR) that promises “affordable, guaranteed private health coverage that will make Americans healthier and can never be taken away.” Wyden has enlisted seven Republican senators as cosponsors, including such conservatives as Lamar Alexander (TN), Bob Bennett (UT), Mike Crapo (ID), and Judd Gregg (NH). 

That guarantee and that bipartisan support have generated opeds in major newspapers, a web site, journal articles, a preliminary scoring by the Congressional Budget Office, and much twittering among the left-wing blogocracy that this could be the vehicle for achieving universal coverage. There’s even a clever video that, come to think of it, supporters of market-based health care reforms could emulate in selling their own ideas.

What’s most interesting about all this is that so many conservative Republicans are acquiescing to a sweeping government takeover of the health care sector. The Healthy Americans Act wouldn’t go quite so far as to enact the Left’s long-sought dream of “Medicare for All,” where government would dictate the terms of coverage for all Americans, set the prices, and cut checks to the doctors. Rather, it would throw us all into a Medicare Advantage-like program, where government would dictate the terms of coverage, set the prices, and cut checks to … insurance companies. Call it “Medicare Advantage for All.” I have more to say about how the Healthy Americans Act would operate in this podcast. 

The conservative group Americans for Tax Reform claims the Act would constitute “the largest tax increase in history.” Former Republican House Majority Leader Dick Armey accuses the bill’s GOP supporters — in particular Sen. Chuck Grassley (R‑IA), the ranking Republican on the Senate’s committee of jurisdiction — of “signing on with the government-run health-care Democrats.” 

So why would conservative Republicans sign on to such a bill? In particular, why Bennett, who has done an admirable job as a member of the Joint Economic Committee of trying to explain free-market concepts to his fellow senators? 

Given the general lack of health-policy literacy on the Right, it seems plausible that these conservatives just didn’t know what they were doing — or that their understanding of the legislation was sufficiently dim that any resistance could be overcome just by dangling the words “health savings accounts” in front of them.

A more troubling prospect is that these conservative senators and their staffs knew exactly what they were supporting, but made the calculation that their immediate political needs are more important than their fellow citizen’s health and freedom.

If you’re like most Cato@Liberty readers, you often ask yourself, “Self, what kind of artwork does Michael Cannon have on the walls of his office?” Thanks to the folks at blog​ging​heads​.tv, not only can you find the answer, but you can learn an awful lot about medicine, health insurance, and health care reform. 

This week, BloggingHeads hosted a discussion between New America Foundation senior fellow Shannon Brownlee and me. Brownlee is the author of the quite excellent book Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer. (Disclaimer: I disagree with many of the conclusions in Overtreated, else we wouldn’t have much to debate.) Brownlee was kind enough to plug my book, too.

Yesterday, an announcement from the Commonwealth Fund landed in my inbox. The subject line read:

How to Achieve Universal Coverage While Lowering Health Spending

A colleague received the same release, and forwarded it along with this note:

Coming next, anti-gravity and perpetual motion machines.

To which I replied:

…eternal youth, gold from base metals, a lasting peace in the Middle East…

To which he replied:

The dead shall rise, the lame shall walk, the blind shall see.

I’m tempted to throw in something about the Cubs winning the World Series. But even that wouldn’t convey the level of impossibility we’re talking about here. You see, there’s an outside chance that the Cubs actually could take the Series.

I’d say we’re as likely to see the dead, the lame, and the blind win the World Series as we are to achieve universal coverage while lowering health spending.

Or does even that overstate the odds?

One of the hottest trends in health policy — wait, where are you going? — is for insurers to pay doctors and hospitals based on the value of their services. I know: how novel. But as it happens, in the United States we generally pay providers based on volume, rather than value. The new trend of value-based purchasing goes by the name “pay-for-performance” or P4P.

P4P can be tricky, since patients vary in terms of their preferences and how they respond to even high-quality care. So if you’re going to have insurers define and reward value, it makes sense to let patients choose their health plan. That way, patients can avoid a P4P system that might (ironically) leave them with lower-quality care.

Unfortunately, the government doesn’t see it that way. The federal Medicare program — which covers 45 million seniors and disabled Americans, making it the nation’s largest purchaser of medical services — is developing a P4P scheme that enrollees will find unavoidable, for two reasons. First, many Medicare enrollees do not have the option of switching insurers. Second, even if they do have that option, private insurers will simply follow the P4P scheme developed by Medicare. Why spend your own money doing something when a big government bureaucracy will do it for you?

The reactions to a study in this week’s Journal of the American Medical Association illustrates another concern with government-administered P4P. According to that study:

Safety-net hospitals tended to have smaller gains in quality performance measures over 3 years and were less likely to be high-performing over time than non–safety-net hospitals. An incentive system based on these measures has the potential to increase disparities among hospitals.

This is not necessarily a problem: a P4P scheme should penalize low-quality care and spur those hospitals to improve quality.

The problem is that when government administers the P4P scheme, the low-quality providers and their advocates will lobby their elected officials for more money in advance of improving quality. In some cases, such as safety-net hospitals, providers may indeed require more resources to improve the quality care. But because the P4P scheme is politically controlled, even providers who don’t will demand more resources — and get them. Moreover, what will those providers say if the “pre-improvement” subsidies fail to deliver any improvement? I’m willing to bet my hat that they’ll ask for even more subsidies.

As I argue here, better that we just let patients choose their health plan, and leave the P4P-ing to the private sector, where the low-quality providers won’t be able to lobby their way out of making some badly needed behavioral changes.