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Thursday, November 19, 2009

The Price of Reform?

A piece in The Honolulu Advertiser yesterday pointed out that the Senate version of Obamacare will penalize states such as Hawaii, by offering less federal support for Medicaid. It’s a case of “no good deed going unpunished,” because the reason for the shortchanging seems to be that these 14 states had already extended wider Medicaid coverage to their citizens then other states, at their own expense, so are seen by the feds as needing less help. (For more on how federal reform will shift costs onto the states, go here.)

However, the cost of Obamacare to Hawaii, and the nation, may be even higher, if we are to believe the dean of Harvard Medical School, Dr. Jeffrey Flier. In an essay yesterday, he gave the Obamacare legislation making its way through Congress a “failing grade.”

In his analysis, the proposed reforms don’t actually change the current, dysfunctional interplay of tax policy, insurance companies and government intervention that make up the health care industry—it simply makes that system bigger and more expensive. Do read his essay for the details of why. The warning that jumped out at me: “Ultimately, our capacity to innovate and develop new therapies would suffer most of all.”

The pro-reformers are discussing the social good of universal health coverage as if money were the only price to pay. But what if the cost of that expansion is that medicine gets no better than it is in 2009? Will we think it’s progress if people in 2025 are still dying of diseases that might otherwise be cured by a system that left more money on the table for innovation and experimentation?

To turn to a local example of how universalism can trump innovation, consider Hawaii’s attempt at delivering universal public education, something the magazine has covered extensively. Is there a school in every neighborhood, ostensibly free and open to the public? Yes, absolutely. By that measure, the DOE is a rousing success. And yet, what has been the defining characteristic of this system, for decades? Hawaii’s students perpetually rank near the bottom in national measures of academic performance. No amount of public scrutiny or dissatisfaction ever seems to change this. A student graduating in the class of 2010 is getting an education little better than what a 1990 graduate would have experienced. Still a success?

Posted on Thursday, November 19, 2009 in Permalink

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