Code Red: Two Economists Examine the U.S. Healthcare System

March 15, 2010

Cutler’s Folly

Filed under: Health Reform,Tax deduction,Uncategorized — David Dranove and Craig Garthwaite (from Oct 11, 2013) @ 1:33 pm

In recent days, leading health economist and policy adviser David Cutler published an op-ed piece endorsing the Democrats’ latest plan at salvaging healthcare reform. Cutler has good reason to support this latest effort as it retains many of the ideas that he articulated when designing his own version of reform. But there is a big difference between the Cutler plan and the Democrats’ plan that Cutler is ignoring. If the Democrats’ plan becomes law, Cutler won’t be implementing it and he will be powerless to prevent Democrats from changing it.

Just consider how much the plan has changed already. Starting with the Cutler plan, the Democrats have mixed in the following:

– Largesse for unions who want the rest of the nation to subsidize their archaic, bloated healthcare plans. In the process, they have preserved the $250 billion regressive tax subsidy that helps preserve inefficient care delivery
– Virtual elimination of Medicare managed care, even though managed care has proven to be one of the only tried and true ways to bend the cost curve
– Bribes to vacillating legislators
– An unhealthy dose of immigration politics
– An even unhealthier dose of abortion politics

And most of these have occurred in the last few weeks. You can be sure that once health reform is enacted, a weak-kneed Congress will eliminate scheduled cuts in physician fees (these changes have taken place every year since 1994; why stop now?) Higher taxes here we come. And who can predict what more will be done to wreak havoc with the pristine Cutler plan? (Just as no one would have predicted the Cornhusker Kickback and the Louisiana Purchase, no one can predict the next travesties.)

The American public likes many of the principles of health reform. I like many of the principles of health care reform. But I don’t trust Nancy Pelosi as far as Harry Reid can throw her.

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