US Health Reform and the Opportunity Cost of Rhetoric
Whatever you may think of President Obama's steadfast attempts at health reform, it is worth estimating the dollar cost of all the chatter, lobbying and rancor on all sides. What are the opportunity costs of debating reform that most objective US health policy observers think will do little to nothing to improve the health outcomes of Americans?
In his recent televised healthcare summit, Mr. Obama conceded the debate over the past year had turned into a "very ideological battle…trumping common sense." Jeffrey S. Flier, the dean of Harvard's Medical School, wrote last November in the Wall Street Journal: "…I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. Likewise, nearly all agree that the legislation would do little or nothing to improve quality or change healthcare's dysfunctional delivery system. The system we have now promotes fragmented care and makes it more difficult than it should be to assess outcomes and patient satisfaction. The true costs of health care are disguised, competition based on price and quality are almost impossible, and patients lose their ability to be the ultimate judges of value."
Still, give Mr. Obama and his supporters the benefit of the doubt. "We have good prospects for passing legislation," House Speaker Nancy Pelosi said Friday. But, statistically, passing just any law is not enough for Mr. Obama, a self-declared post-partisan, to succeed on his own terms. There must: (a) be a greater than 70 percent likelihood that a non-partisan variant of his bill might still pass; and (b) be a greater than 70 percent likelihood that a new law will demonstrably improve the health outcomes of Americans within his tenure. I like to call this the '70/70 rule' of public policy decision-making (some manner of which, I understand, owes its conceptual underpinnings to the work of Aaron Wildavsky. The 70/70 rules requires (at least) both assumptions to be true (multiplying the probabilities) to approach a 50 percent likelihood that human health in America will improve as a direct, or proximate, consequence of the horse-trading and political hot air now swirling about in Washington on the topic of health reform.
Let us assume, further, that policy 'incrementalism' works. That is, if Mr. Obama manages to push the needle on health reform ever so slightly toward improved insurance coverage for Americans, America will inexorably step closer to what some consider an enlightened age. Let us assume this is the end goal, the supremely ultimate policy perfection, and that this end goal will, in fact, lead to ever greater improved health outcomes for more Americans. If all this were true, then Mr. Obama's efforts may have been worth it.
But if Mr. Obama really is a post-partisan, then he should subscribe to the post-partisan first principle of policy development: relationships are as important as convictions. This means that the "end-game," as in alternative dispute resolution in divorce law, is to keep the disputing parties acutely aware of the fact that going to trial - or in politics, arguing and arguing and arguing until you're crystal blue in the lips - inevitably ends up costing you more money, more political capital and more squandered opportunity than it's worth. In short, you need to know when to move on.
Confirming this observation, House Minority Whip Eric Cantor, a Republican, told reporters on Sunday: "If Speaker Pelosi rams this bill through the House using the reconciliation process [which requires a simple majority in the Senate], they will lose their majority Congress in November." In life and in public policy and management, there is a real cost to maintaining one's policy convictions as if they are forever righteous and true. There is a dollar cost to showing your constituents that you will go to the wall for Mr. Obama's health reform, or, alternately, that you will go to the wall to fight any and all of his reform endeavors.
What, then, is that cost? Based on my review of the Congressional Record (Volume 156), at least 30 percent of all congressional debates thus far in 2010 have dealt with health reform. (Aid to Haiti, where 228,000 people have died, has enjoyed much less congressional air time.) Wikipedia advises that the average annual salary of a Congressman or Congresswoman in the United States is $174,000 per year (excluding innumerable perks of office). The 111th United States Congress consists of 541 elected officials from 50 states, five territories, and the District of Columbia. The president earns a $400,000 annual salary (along with a $50,000 annual expense account, a $100,000 non-taxable travel account and $19,000 for entertainment). The salaries for US Vice President Joe Biden and Speaker of the House of Nancy Patricia D'Alesandro Pelosi are $221,000.
Let us assume that 30 percent of the working hours of these individuals since the beginning of the year has been devoted to health reform. Further assume 260 work days in a year; and that there have been 40 working days for these people in 2010. And so, 30 percent of $14.6 million, or roughly $4.4 million of taxpayer dollars, has been invested - by these officials alone - in the healthcare debate since January 1, 2010.
To get a real sense of dollars invested (in 2010 only), we should multiply that number by at least 100 to include White House and Republican staffers, state and local politicians, lobbyists, pundits, reporters, activists on all sides of the debate, think-tankers and academics, civil servants, lawyers, insurance and pharmaceutical industry executives and assorted others. There are, I'm advised, "Byrd-bath meetings," held in Democratic Senator Robert Byrd's office, that reportedly drag on for weeks as lawmakers and their staffers bicker over what should stay in the Obama legislation and what should be jettisoned. (Elements that fall by the wayside are now referred to as "Byrd droppings").
All this totes up to hundreds of millions of dollars spent in rhetoric since January 1st - no matter where you fall on your assessment of the '70/70 rule'. It fuels the oxygen tanks of CNBC, Fox News, CNN and their never-ending train of talking heads. Most Americans would agree there are better uses of this money given that meaningful debate has turned into what the Irish call "blarney". This 'debate' should be prorogued until post-partisan heads prevail.
About the Author(s)Neil Seeman is a writer, and director and primary investigator of the Health Strategy Innovation Cell at Massey College in the University of Toronto.
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