This Budget-cutting Farce

Mark Thoma has a post titled, "The Ryan Plan Is "Fundamentally Immoral."  I think I would have to agree with this.  Slashing medical care for the poor so that rich people can pay less in taxes isn't right.  Thoma summarizes by looking at the causes of the record deficits, and ends with a sigh about how unserious the potential solutions are:

As also noted above, we already have something like that in the works, it's in the Affordable Care Act, and we'd be much better off focusing on making this program function effectively than dreaming that somehow individual vouchers are the answer. They're not, and "the greatest risks will fall on the poorest, sickest, or least savvy."

The game being played here has little to do with the budget itself. It is an ideological debate about the role and obligation of government. First, cut taxes for the wealthy to create a big hole in the budget, have a Great Recession aid the cause by stripping government at all levels of tax revenue, increasing costs of serving people, and creating short-run deficit problems (and a war here and there doesn't hurt the cause either), and finally use the deficit as a club against social insurance programs such as Medicare and Social Security.

The cover for the attempt to get government out of the social insurance game is the deficit, but deficit reduction is not the primary purpose. The goal to reduce the government's involvement in these programs by whatever means. If deficit reduction was, in fact, the primary goal, there are much better ways to do this than the Ryan plan, e.g. the market-based mechanisms in the ACA.

I wish I could trust Democrats as the gatekeepers, but they seems just as determined as Republicans to kill some program so that they can wear the badge of deficit reduction for the upcoming election. The badge itself seems much more important than what it takes to get it. Democrats are itching to kill something, anything, so they can put the notch on their gun, and that is the most worrisome part. "We don't need no stinkin' badges!," but it looks like that's what we are going to get.

In the end, my opinion is that cost-savings in health care will probably only come about with less competition, not more competition.  Why do I say that?  Because in the end, multiple hospitals providing the same services will all end up underutilized, as they each expand to try to take more of the market.  It is nearly impossible to maintain the proper staffing to maximize efficiency in such a random situation.  Likewise, with a large number of insurance companies each negotiating different pricing arrangements with the hospitals and doctors, there are a number of extra hands in the till. 

Because it is a public good, health care will need to be managed as such.  That goes in the face of our national belief in the perpetual goodness of markets, but I don't see a way around it.  People can't be expected to be rational consumers of health care when they are facing health emergencies.  Anything else will end up leaving large numbers of people without health care or bankrupting the country.