Since the special election in Massachusetts, there’s been a resurgence of the notion that it was a mistake for Democrats to lump all of health reform together in one giant package, rather than breaking it down into more manageable pieces that could be tackled separately.
The idea is that, because the legislation is so long and complicated and affects so many different interest groups and because there is so much ideological baggage in play, it has inevitably been under attack from every angle, doomed to death by a thousand cuts. If the effort were broken into smaller chunks, we are told, lawmakers could take on just one or two big interests at a time and have a better chance of getting things done. That’s the idea.
But it’s a bad idea. Reform can’t work that way. Not this reform, anyway. The problem is that the piecemeal theory ignores the difference between legislative politics and policy and fails to recognize the interdependence of policy that underlies the legislation’s many components.
Start with insurance reforms: banning exclusions for pre-existing conditions, guaranteed issue, guaranteed renewability, and community rating. Those things are going to drive insurers out of business if you don’t address adverse selection, so you impose an individual mandate. Because you’re making everyone get insurance, you have to make sure everyone can afford insurance, so you pump subsidies into the exchanges and expand Medicaid for those with the lowest incomes. Now the government is putting a lot of money into covering everyone, and it has to raise the revenue to pay for it all, so we get an excise tax, wring some inefficiencies and waste from Medicare, and cut the excess from Medicare Advantage. Because of the size of the government’s commitment to health spending—which is in fact already unsustainable—we have to slow the rate of growth in healthcare costs, so we throw in a smorgasboard of delivery and payment system demonstrations and pilot programs and an independent commission to recommend and in some cases implement cost-saving measures.
And there we are. Given the objectives and the starting point, the several components follow naturally. If you didn’t start with the private insurance reforms, you wouldn’t need mandates or Medicaid expansion; but then you wouldn’t get anywhere near universal coverage. You could do cost controls and delivery reforms before expanding coverage; but it wouldn’t make much sense to do it that way, because the effectiveness of those reforms will depend on the way we choose to pursue coverage expansion.
Fundamentally, health reform is complex because our goals make it complex. In fact, contrary to another common critique (that the bill is a radical restructuring of our market-based healthcare system), it is largely because our goals are so moderate that reform is so complex. We are trying to achieve near-universal coverage while preserving the status quo for as much of the system as possible and indeed while rewarding as many of the system’s major players as possible. As long as we try to achieve near-universal coverage within a largely private insurance system, reform will be a massively complex undertaking.
This is make-no-enemies health reform, moderate to the core. If it fails, it will not be because its complexity engenders enemies, but because the political process has been engulfed by a cancer and is in need of reform of its own.