Bending the Curve

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

Brad DeLong tries to figure out why the Congressional Budget Office has been so pessimistic about the potential for healthcare reform to reduce long-term costs:

The problem, I think, is that the CBO has a category for cost control but no category for getting system incentives right. It is a budget office, after all, not a philosopher-king office. The problem, however, is that it is the only arbiter out there. And there appear to be a lot of members of congress who think controlling costs = getting system incentives right.

I don’t think we should care much about costs: it might be in the future we want to spend a lot on health; it might be that in the future we develop magic treatments and so want to spend a lot less. If we get the system incentives right, then whatever we spend on health will turn out to be the right thing to do.

There are useful things we can do that will help control costs.  Better IT, for example.  Lower administrative overhead.  Comparative effectiveness research.  For the most part, though, these are one-shot deals.  They’re worth doing, but you only get to do them once.  And once they’re done, costs keep going up.  They go up from a lower base, but they still go up.

Then, as Brad says, there are things that help align incentives better and (maybe, possibly) bend the curve of rising healthcare costs downward.  Moderate copays, for example, can help reduce unnecessary doctor visits.  Cheap (or free) access to preventive medicine can keep chronic ailments from turning into expensive acute crises.  Paying doctors straight salaries probably promotes more efficient use of expensive services than either capitation or fee-for-service. Universal coverage can prevent overuse of expensive emergency room services.  A more sensible malpractice regime might reduce defensive medicine (and more fairly compensate victims of genuine malpractice in the bargain).

But in the end, both as individuals and as a society, we’re going to spend as much on healthcare as we feel like spending.  And why not?  We should spend our incomes on whatever we value the most, and for a lot of us that’s healthcare.  If that turns out to be 30% of GDP, then it’s 30% of GDP.

And that’s what will eventually bend the curve in healthcare costs: when we all finally decide that we’re spending enough.  Whether we’re doing it as individuals, as employees with healthcare insurance, or via tax dollars, we’ll get serious about controlling costs when we decide that costs have gotten too high.  Until that happens, though, well-designed incentives may make things more efficient but won’t appreciably reduce the rise in total spending.  I don’t think politicians can afford to say that in public, but it’s probably true.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate