Hey Dems: the only way out on health care is through

December 26, 2013
An Affordable Care Act navigator in Illinois Bureau helps a woman shop for health insurance. (Daniel Acker/Bloomberg)
An Affordable Care Act navigator in Illinois Bureau helps a woman shop for health insurance. (Daniel Acker/Bloomberg)

A new poll shows that the Democratic edge on the generic congressional ballot has evaporated, and Republicans now have a slight edge. Unsurprisingly, this is stoking panic in moderate Democratic circles, where they rightly blame the bungled Obamacare rollout for their poor position.

The typical moderate Democrat instinct here is to make some move toward the Republican side. But no amount of distancing themselves from the president or Obamacare will help. In fact, if they are to rescue their electoral fortunes, the answer is more liberal health-care reform, not less.

In a big new piece from the new issue of the Washington Monthly, Phillip Longman and Paul S. Hewitt show us one reason why. Hospital consolidation has been skyrocketing and many regions have been basically monopolized. Without competition, price gouging is rampant:

Start with the sheer number of hospital mergers … the tally has run up from fifty-two in 2009, to seventy-two in 2010, to ninety in 2011, and reaching 105 in 2012….

Today, the effects can be seen in the prices providers receive for the same procedures in markets with different degrees of concentration. For example…in concentrated markets, the price for a pacemaker insertion averages $47,477, but in markets that remain comparatively competitive the cost of the procedure averages $30,399.

So what’s the solution? First, greater anti-trust enforcement. But second, since there are others reasons to prefer larger, integrated care organizations (witness the success of Intermountain Healthcare in Utah and Idaho), the government should start enforcing “common carrier” rules:

[A] common carrier regime might work like this: A hospital over a certain threshold of market power — let’s say, one-third or more of a community’s beds — would be required to publish a full schedule of its prices for all its different services and procedures. It would also be required to charge all customers the same price, whether those customers were large or small insurance companies, employers, or individual patients.

The idea here is to prevent the kind of price gouging of the weakest customers that is routine in today’s hospitals. In other words, Obamacare is only a foundation — more government action will be needed to keep the health-care industry from eating the entire federal budget. But on the other hand, fix health-care inflation and you’ve fixed the long-term deficit problem.

Moderate Democrats resist this kind of conclusion. In 2009, during the frantic negotiation of the Recovery Act, they insisted (based on no reasoning or argument of any kind) that the stimulus be no bigger than $800 billion. As people predicted at the time, it wasn’t big enough, the economy didn’t recover fully, and moderate Dems lost en masse in 2010.

Now, I’d guess this is a local minimum for Democrats’ polling, and things will turn up as 2014 progresses and Obamacare improves. But, as Duncan Black has said, the entire health-care system is going to be stapled to the Democratic hide for the next several years at least. There’s no escape, and being hesitant or trying to “compromise” is the riskier strategy that probably will ensure a loss in 2014. By contrast, owning Obamacare, keeping pressure on the administration patch it up and embracing additional reforms where needed is the sensible, lower-risk strategy. Because the anti-Obamacare vote will always be for a Republican.

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George Zornick | December 26, 2013