0:04
While waiting for the next question, let me interject one of my own.
You've written brilliantly about the politics of
post-reform implementation of law.
And you spoke specifically in a recent article about the toolkit of
policy entrenchment.
>> Yeah.
>> Could you enlighten us a little bit on some of the things that
one who's implementing policy.
And Eric, I should add,
has not only a wonderful Bachelors degree from the University of Virginia.
Sat in your seat some time ago.
But also in [CROSSTALK]. >> 1956.
>> [LAUGH].
>> More recent.
Also an MPP, which is a great degree we offer here at
the Batten school before he got his doctorate at, at Berkeley.
But could you talk about some of the tools in the tool kit, for
those who are trying to entrench a policy that continues to
be controversial after it's been adopted by the legislature.
0:51
>> American politicians are responsive to voters and interest groups.
That's the key.
If you want a policy, not only to pass congress but
to succeed, it has to build a constituency.
One of the things I think that's been most worrisome for the Obama administration,
for advocates of the Affordable Care Act,
is that many of the people that are benefiting the most from Obamacare do not
recognize themselves as being beneficiaries.
They either don't understand that they're being helped by it,
or else they don't want to participate because even though many of
them are receiving generous subsidies, because lots of them are low-income folks,
these subsidies are still not large enough to induce them to participate.
So on that side, there's a weaker constituency than you would think.
It's also the case, we know from political psychology,
people react much more strongly to loses than to gains of equal size.
So something that was also not fully anticipated was the number of
Americans that would have their health insurance plans canceled.
1:50
Because they did not meet the regulatory requirements of Obamacare.
To take away an existing health insurance plan, even if those people end up
getting new insurance plans that are very similar to what they had,
is extremely disconcerting for people.
When you create losers or
you disrupt the routines that Americans have relied upon, that is a big problem.
And so, from the standpoint of building a constituency, not rattling voters,
this has bee very problematic.
And as I mentioned as well,
we know historically, you need, over time, to build strong bipartisan support.
And this law has not yet done it.
Not to say it won't over time, but we're not there yet.
It will take time to make this a program that Republicans decide they
no longer want to fight.
And until Republicans make that decision, and until this law is still up for grabs,
we're going to see residual uncertainty about whether it will succeed or not.
>> Hi, Dan Schmeel from Pennsylvania.
Some experts say that much of the unnecessary care is the result of a fear
of being sued, not necessarily indecision about what is best for the patient.
Do you think tort reform should be a priority for us to reduce medical costs,
or do you think another area should be focused on first?
>> Great question.
The best evidence suggests that malpractice litigation is not
a primary driver of our healthcare cost problem.
However, a lot of experts that are quite knowledgeable believe that some of
the studies on that subject are not fully credible, and
that we really don't know and that there are good theoretical reasons to believe it
might be a larger problem than some of the data suggests.
There was significant discussion during the debate over the Affordable Care Act
about whether to add a significant malpractice reform measure to the law.
This was something that some Republicans had been interested in.
It did not happen for several reasons.
One reason was that Republicans were interested in it but
were not willing to say,
if you give us malpractice reform we'll give up our opposition on other issues.
They weren't willing to bargain.
In addition, on the Democratic side, a key Democratic constituency which
are the trial lawyers were opposed to aspects of this malpractice reform.
And so the Democratic political advisers were unwilling or reluctant take, to
take on that constituency unless they knew they were going to get something for it.
And then finally and most interestingly, a key constituency that
would potentially benefit from malpractice reform are physicians.
4:20
And because a lot of them have to pay very high insurance costs in order to,
to worry about this.
Interestingly, they did not push hard for this.
They had the opportunity, the doctors to sort of say,
this is something we really care about.
You know, we want malpractice reform.
This wasn't the top of their list.
The top of their list was maintaining Medicare funding and
some more direct reimbursement issues.
And so doctors did not make it a big issue.
Some core Democratic constituents were opposed to it.
And Republicans that wanted it did not signal a willingness to bargain.
That, in a nutshell, is why it didn't happen.
Even though a lot of experts believe it would be an idea that should be
included in the future reform.
4:56
>> With all the talk about medical costs increasing,
a lot of people forget there are areas where medical costs have decreased.
For example, with laser eye surgery.
In the last ten years, quality has gone up and prices have gone down.
And one of the reasons for
that is there's, there's not really any middle men.
There's no insurance companies involved, there's minimal government regulation, and
there's just less actors involved.
So, considering that Obama is adding to bureaucracy, creating more middlemen,
how is it going to control costs and
increase quality like we've seen in some facets of medical care?
>> That's a great question, too.
And this goes back actually to my beginning of my talk,
about these different ways of solving the, the dilemmas of the healthcare system.
At the end of the day,
healthcare cost control, there's really two places you can try to put it.
Leave aside the issue of the poor and the need for subsidies for them.
You could try to put it in the hands of the individual.
And try to give individuals greater incentive.
Make it more like a Gap shirt market.
Find way of saying the individual health care consumer will have
a greater incentive.
That's things like health savings accounts or other market like mechanisms.
That's one market approach.
The other approach would be to empower the government, to regulate, say,
the cost of drugs like it's done in Europe.
To actually empower the government to say,
Medicare is only going to pay x dollars for this drug and no more.
6:15
What I think has been frustrating for many people who concern about U.S.
healthcare cost is the United States has done neither overall.
We have neither adopted a market model nor a government model.
We have not gone the European way nor have we gone the full libertarian way.
We have a hybrid system.
And the fact that we have a hybrid system reflects our politics,
the nature of the society we are.
That we sort of distrust government but
we also want government protections in some ways.
We have ambivalence about it.
We have not been, as a people, willing to make a firm choice.
And I think the irony which you're pointing to is,
actually in some ways the hybrid model of healthcare cost control,
neither putting the constraint on the individual, nor
empowering the government, might be the worst of all worlds.
And so we have a system that reflects the ambivalence of the American public, that
reflects the pluralism and tug and pull of different groups, but it also is a result
of a hodgepodge system with no clarity and no clean mechanism for cost control.
7:15
I think that sobering note is actually the best way to leave this for today.
It illustrates the challenge ahead of you, and why,
in the future, all economists will be health economists.
Please join me in thanking Professor Patashnik.
>> [APPLAUSE].
>> It's great [INAUDIBLE].
Thank you so much.
>> Oh, you're welcome. >> Very nice.
Good.
