The Government Spends A Lot of Money Because It Pays High Prices For Health Care Services

I don’t particularly agree with his interpretation, but I think Christopher J. Conover does American conservatism a favor with his article about how health care is the health of the state. He’s making the point that growth in government spending is overwhelmingly not the consequence of grasping liberals coming up with evermore things for the government to do. Instead, the government has for a long time shouldered responsibility for health care finance, and health care is very expensive.

Something I would note about this is that the basic principle here is much less controversial than conservatives sometimes pretend to believe. The existence of “private” health insurance in the United States is largely an artifact of elements of the submerged state. We provide a large tax subsidy for employer-provided health insurance that makes it cost effective for firms to offer group health insurance plans to their workers. We also prohibit employers from engaging in risk-screening when they put their group health insurance pools together. And we have continuity of coverage regulations that ensure that a person can get a job, then get insurance, then develop an illness, and then get a new job and get new insurance with the new job without losing her coverage. Absent those “big government” interventions into the marketplace, many fewer people would have health insurance and the political demand for formal government provision of insurance would be higher than it currently is.

State of the art progressive thinking on this subject features ideas like all-payer rate setting and IPAB that are supposed to wring waste out of the system. State of the art conservative thinking, as embraced in the House GOP budget, is to just refuse to pay what medical treatments cost. Except because this is totally untenable, their idea is to promise today that we’ll refuse to pay what treatments cost in the future. But will we? I don’t see any reason to think we actually will. Efforts to change the cost structure might fail, but you could at least imagine them succeeding. Imagining some future scenario in which elderly people don’t get health care and everyone stands around saying “well, Paul Ryan said it would be smart to do it this way 20 years ago” doesn’t make any moral or political sense to me. Sometimes you’ve just got to pay the taxes.