(Cross-posted on TCF’s Taking Note)
David Brooks has just published a column modestly titled “where wisdom lives,” which evenhandedly considers both parties’ approaches to health reform. In his usual lighthearted fashion, Brooks ultimately concludes that Republicans are basically right about the big stuff, and that Democrats are overly wedded to technocratic, big-government solutions.
Read the column. Then read Jonathan’s Cohn’s fair but devastating response wonderfully titled “The imaginary debate in David Brooks’ brain.” As Jon puts things:
Brooks writes as if the key distinction between Democratic and Republican plans for Medicare is the way they would manage the program, with Democrats entrusting experts to make key decisions about where to spend money and Republicans entrusting consumers. But that’s not the most salient difference between the two approaches. The most salient difference is that Democrats would preserve Medicare’s fundamental guarantee of health benefits at affordable prices. Republicans would not.
Jon is too polite to comment on the most striking aspect of Brooks’s piece: the Powerpoint-like reduction of complicated health policy matters to superficial bullet points.
Consider Brooks’ key passage:
Democrats tend to be skeptical that dispersed consumers can get enough information to make smart decisions. Health care is phenomenally complicated. Providers have much more information than consumers. Insurance companies are rapacious and are not in the business of optimizing care.
Given these limitations, Democrats generally seek to concentrate decision-making and cost-control power in the hands of centralized experts. Under the Obama health care law, a team of 15 officials will be created to discover best practices and come up with cost-cutting measures. There will also be a Center for Medicare and Medicaid Innovation in Washington to organize medical innovation. Centralized officials will decide how to set national reimbursement rates.
Republicans at their best are skeptical about top-down decision-making. They are skeptical that centralized experts can accurately predict costs. In 1967, the House Ways and Means Committee projected that Medicare would cost $12 billion by 1990. It actually cost $110 billion. They are skeptical that centralized experts can predict human behavior accurately enough to socially engineer new programs. Medicare’s chief actuary predicted that 400,000 people would sign up for the new health care law’s high-risk pools. In fact, only 18,000 have.
They are skeptical that political authorities can, in the long run, resist pressure to hand out free goodies. They are also skeptical that planners can control the unintended effects of their decisions.
Republicans point out that Medicare has tried to control costs centrally for decades with terrible results. They argue that a decentralized process of trial and error will work better, as long as the underlying incentives are right. They suggest replacing the fee-for-service with a premium support system. Seniors would select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.
From 50,000 feet, that seems persuasive. When one gets down to policy specifics, this is much less plausible. Indeed Brooks’ piece reminds me of many glib Powerpoint presentations I’ve endured over many years.
I’ve seen many such presentations that contrast “top-down” vs. “bottom-up” decision-making. Oddly enough, the “top-down” strategy never fares well in the “Conclusions and recommendation” slide. I’ve also seen many consultant presentations that contrast “fragmented” vs. “integrated” approaches. Oddly enough, “fragmented” has never fared well, either.
The particulars of health policy just don’t fit these boxes. Global budget constraints or prospective payment systems might allow physicians greater practice autonomy than a fee-for-service system with less powerful centralized budget controls that is then driven to implement greater micro-management. Centralized financing is not the same as centralized practice guidelines which is not the same as centralized risk-adjustment which is not the same as…. You get the picture.
I’m also puzzled by Brooks’ suggestion that “Medicare has tried to control costs centrally for decades with terrible results.” Medicare has controlled cost growth more effectively than private insurers have been able to do. Pretty much every health policy commentator notes that other wealthy democracies have controlled costs even more effectively than we have. They’ve done this by deploying government market power in precisely the way Brooks deplores. Reading Mr. Brooks’ piece, one might also forget that market-oriented state health insurance exchanges, the very model of a “decentralized process of trial and error” are at the center of President Obama’s health reform.
Cracks in Brooks’ argument become clear when one considers other particulars, too. The proposed Independent Payment Advisory Board (IPAB) will use a highly decentralized evidence base of comparative effectiveness research to inform Medicare reimbursement and coverage policies. That’s pretty “bottom-up.” A second virtue of IPAB is to help Congress solve its obvious collective action problem by replacing fragmented policymaking with a more centralized model. That’s “top-down.”
CMS’s Center for Innovation will largely support a range of local initiatives and demonstration projects. One might debate whether efforts to implement and evaluate Medicaid medical homes or the new Accountable Care Organizations are “top-down” or “bottom-up” approaches to innovation. Pretty quickly, though, one realizes that this is just the wrong question to be asking.
I won’t bore people with my continued criticisms of the Affordable Care Act’s high-risk pools, which I strongly opposed. I’ll just say that fragmentation is one of this program’s basic problems. It’s hard to effectively implement a network of state-federal partnerships, particularly given political and budgetary uncertainty, and given the ideological/political differences between many governors and the Obama administration. Expanding Medicare coverage for the medically uninsurable disabled would have addressed this problem much more effectively and humanely, through this is a “top-down” appproach.
Many of us in public policy spend so much time making faux-sophisticated Powerpoint arguments. We easily forget how empty these arguments often are.
One of the most irritating conservative mistakes is to compare the private vs. government service without acknowledging the fundamental point of government service: to guarantee some standard of access to all. Private enterprise is pointed to as routinely superior in service - which it no doubt usually is. But be they roads, parks, libraries, schools or health care - they are not required to open their doors to everyone. Of course this is often less efficient, and normal market mechanisms won’t come to bear - but we make this sacrifice if we feel the service is of sufficient importance to provide to the public.
Has “public service” lost its meaning?
Brooks is more or less on my don’t-bother-to-read list. He seems like a nice enough person, but kind of a cheese-eater, someone who believes in trickle-down economics even after all this time. If the penny hasn’t dropped yet, it’s not going to.
This debate brings a whole new meaning to ‘American Exceptionalism’. These conservative commentators can’t come to grips with actually examining the evidence over dozens of other countries. There isn’t really that much need to speculate. The experiments have been done, now build on it.
One thing Brooks misses is that researching health care options isn’t free. If seniors have to spend a couple of weeks every year comparing plans, figuring out the gotchas, matching up against their voucher and other income and so forth, that’s an implicit cost well up in the billions of dollars.
And it’s worse than that. Individuals have no market power. That’s why you have groups getting together to bargain with insurors, delegating a few people to do the research and figure out the best options, and to offer insurors the gain or loss of a revenue stream big enough to care about. Which is apparently fine just as long as the bargaining doesn’t involve anyone in government…
Edward Tufte is a fairly well-known statistician/political scientist whose research has involved the visual display of information. I can’t recommend his one-day short course highly enough.
One of Tufte’s pet peeves is Power Point: he points out (correctly) that PP is pitch software. It was designed to help salesmen make their pitch and close the sale. That is not the best way to convey complex information efficiently. It may not even be a good way. Tufte holds PP at least partially responsible for several major disasters, because it has a built-in bias towards hiding important information. It sounds like Brooks is writing his column from a PP presentation.
For a look at some of ET’s take on PP see http://www.edwardtufte.com/bboard/q-and-a-fetch-msg?msg_id=0001yB&topic_id=1 (Sorry, I don’t know the HTML for embedding links.)
Stepping back, what is puzzling is why Brooks gets to write about health care at all on the pages of the NYT. He has no expertise. He has no experience as a doctor or administrator. He is unwilling to do the most basic fact-checking - witness his howler about Medicare D costs.He is really nothing but a more polite version of Limbaugh.
Why should the NYT editors, or anyone else, grant him any credibility on the subject.
Brooks, in my view, shares a fundamentally mistaken belief with many, many others of his ilk. It is that if someone’s making money from something, that means wealth has been created. He does not understand, or allow himself to see, that much of our current economy works by seeking exclusive and increasing capture of existing and future wealth, ie rent-seeking, which is an out-and-out transfer, not a creation or a trade. For him, a transaction between a private person and a privately-owned business entity is, by definition, an exchange of fair value. Never mind the efforts of private entities to lock in consumers and increase their revenue stream while reducing content and value in many ways; think of hidden and rising costs and termination fees in cable and cell phones, hidden and rising banking charges, and the decline in customer service and information that relentless cost-cutting gives us.
For him, only the government is capable of taking without providing equivalent value. That’s what captains of industry believe implicitly. In Brooks’s case, watching stock prices too much probably encourages him in the belief. Which I don’t think he’s articulated to himself.
Bernard:
“…what is puzzling is why Brooks gets to write … at all … [in] the NYT.”
Because of a powerpoint-driven hiring decision. The ppt probably looked something like:
A. We are perceived as “liberal”
B. Our prestige requires “balance”
C. We need conservative columnists
D. David Brooks is a visible conservative
E. We enjoyed talking with him during interviews
F. He starts next week
The NYT editorial board are as ppt driven as the writers they hire.
Affordable for whom? Medicare as currently constituted is not sustainable. Somebody’s paying. Or do you think doctors will be willing to work, like good little socialists, for the good of society? Let’s work toward a system where patients and doctors make their own rational decisions about what procedures are affordable and necessary and will truly impact life quality and length. A system where everyone can get whatever procedure they “want” “paid for” by society is not a rational one.