The Stanford Political Union held an important debate on Monday. The topic: Should we repeal Obamacare?
Our debaters for the night (full disclosure: I have studied under both of them) sported impressive resumes. Professor Mark Duggan is the director of the Stanford Institute for Economic Policy Research and worked in the Obama White House. The event marketed him as one of the "architects of Obamacare." Opposed to Obamacare was Professor Lanhee Chen, a fellow at the Hoover Institution, and the former chief policy director (the brain) of Mitt Romney's presidential campaign.
There were two other student debaters, but these men held court. They are, after all, The Experts. Which is the whole point of the long resumes — both of The Experts are unassailably authoritative and they turn out to be compelling enough to convince your correspondent of just about anything.
If you, like me, are not a healthcare policy expert, just what are you supposed to do? Should you believe Professor Duggan? He seems like a nice guy. He'll tell you that Obamacare has brought health insurance to 20 million Americans. He'll have you think of the kid whose mother got sick and father got laid off and whose family was just slightly ineligible for Medicaid and was forced to avoid seeing the doctor just to make car payments — and Professor Duggan will get you to say thank God for Obamacare.
But maybe you should believe Professor Chen. He seems really sharp. He'll tell you that yes, 20 million have been insured, but 80 percent of them have gained insurance through the Medicaid expansion. And "lest you believe that's a good thing," he'll tell you that many doctors won't even see Medicaid patients, and that several studies show people with Medicaid have no better, and in some cases worse, health outcomes than people with no insurance at all.
Professor Chen will go on to inform you about the "unprecedented" intrusion of the federal government, which standardizes benefits even though people obviously need different things and should choose for themselves. You'll nod along. You'll nod even more when he tells you about rising premiums, fleeing insurance providers, and how "California can't raise taxes high enough" to cover its rising healthcare costs. After Professor Chen is done, you'll thank God that Obamacare was designed so poorly it will self-destruct.
But not so fast. Professor Duggan will reassure you that, because of Obamacare, "cost growth is slowing down at the aggregate level." Obamacare is even reducing the federal budget deficit, he says, citing the Congressional Budget Office. Besides, he says, the rise in premiums "was not unexpected" and is largely covered by subsidies.
Professor Chen calls the budget deficit claim a "fantasy" and asks how it makes sense that the government saves money from providing health insurance to 20 million people. "There are no free lunches," he says (twice), and declares, "Obamacare is perhaps the largest single transfer of wealth in American history." If you think that's a good idea, he concludes, then you'll probably like Obamacare.
For the first time all night, your correspondent is certain of something: Professor Chen is right about this. He's right because nobody wins this debate. The Experts are too good. They have too many facts and too many studies, and after what seems like the thousandth wonkish term used that night — "risk corridors," I believe it was — I realize that I have absolutely no clue what The Experts are talking about. The only thing left to do is follow my tribe, the Red Tribe, and oppose Obamacare.
Simply put, my gut tells me that a massive transfer of wealth is not the best solution. My gut tells me that, far from being too important to be left to the vagaries of the market, healthcare is too important not to be left to the market.
Near the very end of the event, long after everyone had chosen his or her side, Professor Duggan slipped up. "What is strange," he said, "is that, in healthcare, unlike in other industries, new technologies lead to higher costs." This, the professor explained, means that small taxes "discouraging some innovation might even be helpful." I am increasingly confident this makes no sense.
I wish that Professor Duggan would stop to ask just why it is that healthcare is so strange? Kevin Williamson of National Review offers a helpful comparison to the cell phone market. Every year our phones get cheaper and better; now everybody has a better phone than millionaires could afford just 20 years ago, and you now likely have the same phone as the president of the United States.
What makes the cell phone market different? Williamson continues: "If you buy a cell phone, you spend your own money to meet your own needs, and you have an incentive to get the best value for your dollar. It's a pretty competitive market, so providers have to answer to you." Whereas, "In health care, you have to convince somebody else — either an insurance company or the government — to spend money on you, and other people don't really want to spend money on you… In return, you don't care how much a particular medical treatment costs, only whether your insurance or government plan will cover it."
The point is intuitive: People spend their own money more efficiently than anybody else's. "You'd never buy a $9,000 phone," writes Williamson, but you'd spend that much and far more on operations that you don't really need and for which someone else is paying. And when the real prices are so hidden, mystified and insulated that even the doctor cannot tell you how much an operation will cost, you couldn't find the best deal even if you bothered. Market forces are stymied and healthcare prices rise.
The Experts can argue all day about who pays what, but as long as we neglect to ask why our cell phones grow cheaper while our healthcare grows more expensive, my gut tells me we will never fix our healthcare system.
Elliot Kaufman (@esterlingk) is a contributor to the Washington Examiner's Beltway Confidential Blog. He is a student at Stanford University.
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