Owned
Sorry Republicans. Your cost-control ideas belong to Democrats now.
Neera Tanden March 29, 2010 | 1:00 am
On the day of the historic House vote on the Senate bill and reconciliation package, conservative pundit David Frum wrote a piece titled "Waterloo," in which he stated that “conservatives and Republicans today suffered their most crushing legislative defeat since the 1960s.” Frum argued that, by opposing the entire legislative effort as a means to cripple the Obama presidency and refusing to negotiate in good faith, the Republicans ensured they would have no part in shaping the most significant domestic policy of the last 40 years. “Barack Obama badly wanted Republican votes for his plan," Frum explained. "Could we have leveraged his desire to align the plan more closely with conservative views?” The answer is clearly yes.
And the consequences will be large. By unilaterally ceding control over the contents of the health bill, Republicans have also ceded any claim to the policy innovations therein. Ideas that were once championed by conservatives have now been adopted by Democrats, who have become their primary champion. Going forward, if they are successful, these ideas will be permanently considered Democratic achievements.
One of the best examples of such a conservative issue is cost control. For decades, cost-conscious Republicans criticized the way health care is delivered in our country. They argued that generous insurance plans, combined with the fee-for-service system in which doctors, hospitals, and other providers are reimbursed for each point of service they deliver, creates incentives for overuse. Incentives work in health care like they do in other markets: If you pay someone to do something, they will do it a lot. Because we must pay for each check-up, each consultation, each test, the system encourages providers to approve unnecessary care for higher payment. So the fee-for-service system rewards volume over quality of care. By realigning the system to provide better market incentives, moderate conservatives argued, we could wring billions of wasted dollars out of the system. (Many also contended that we should control costs from the opposite direction, making consumers responsible for more of the cost for each service, and therefore reducing their incentive to "overconsume" health care.)
Liberals, in turn, defended this fee-for-service system from its critics, arguing that any alternative would limit access to needed care. They wanted to ensure that doctors and consumers had the primary say over health care, and fee-for-service, they argued, was the best way to guarantee that. They didn’t talk about "death panels," of course, but they did imply that a system which encouraged doctors to control costs might ultimately mean patients would suffer. CONTINUED
