True Gentlemen: David Brooks

Brooks is an admirable gentleman, and never fails to find a way to describe complex and politically fraught situations in terms that allow everyone to feel good about themselves and require nothing so uncouth as affixing blame to individuals or groups. Well, unless those individuals happen to be liberals. But no one's perfect.

Brooks shows his gentlemanliness in his opening line:

If I were magically given an hour to help Barack Obama prepare for his health care speech next week

Yes, if only. Rare is the pundit today motivated not by self-aggrandizement but by the desire to assist a politician with whom he disagrees vigorously. Brooks's advice? Quite reasonable. Peruse an article in the estimable Atlantic Monthly with the perfectly non-inflammatory title "How American Health Care Killed My Father." But wait, you say. Such an article by name alone suggests the impertinence of populist anger against The System, a social plague thought eradicated in the 1960s. Fear not, for both Brooks and author David Goldhill seek not to rouse pitchforks against The System, an entity guided and driven by recognizable and identifiable human hands. Rather, perverse incentives are to blame for costs. As Brooks summarizes:

Goldhill’s main message is that the American health care system is dysfunctional at the core. He vividly describes how the system hides information, muddies choices, encourages more treatment instead of better care, neglects cheap innovation, inflates costs and unintentionally increases suffering.

As Brooks is an upstanding gentleman, I trust the reader will feel no need to pursue a full reading of Goldhill's piece to judge the veracity of Brooks's summary. Clearly, once Barack Obama declares war on the Malefactors of Perverse Incentive this reform is as good as done. I also trust that the reader, like Brooks, sees no possible obstacle to a government initiative to regulate the health delivery system to avoid unnecessary expenses, encourage economies, and streamline information. No one has any problem with suggestions so reasonable.

Kudos, David Brooks, for solving one of our most intractable problems, without asking us to bicker and argue about who's gouging/overcharging/dropping/denying/defrauding whom. You are a gentleman and a scholar.

It is unfortunate, however, that David Goldhill's dad had such strong perverse incentive to die.

Update: An uncouth person might point out that Goldhill's article, which deals with a fatal infection contracted in a hospital as a result of systemic failure to practice good hygiene, describes an important issue but one that is nonetheless irrelevant to the issues being debated now, which largely involve the financial end of the health system rather than the health delivery end.

Update 2: An even more uncouth person might point out that Goldhill's aversion to blame-fixing is perhaps insincere since it allows him to proceed to a standard glibertarian argument for market-oriented reforms:

To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.

A truly uncouth person might point out that, while Goldhill's proposed remedy of eliminating "moral hazard" by ceasing the funding of routine care through insurance would, indeed eliminate much bureaucratic overhead for administering preventive care, it would also discourage anyone from seeking care until their illness was debilitating.

Society’s excess cost from health insurance’s administrative expense pales next to the damage caused by “moral hazard”—the tendency we all have to change our behavior, becoming spendthrifts and otherwise taking less care with our decisions, when someone else is covering the costs.

Evidence? hold on to your hats. How spendthrifty are we when a generous insurance company is footing the bill?

Want further evidence of moral hazard? The average insured American and the average uninsured American spend very similar amounts of their own money on health care each year—$654 and $583, respectively. But they spend wildly different amounts of other people’s money—$3,809 and $1,103, respectively. Sometimes the uninsured do not get highly beneficial treatments because they cannot afford them at today’s prices—something any reform must address. But likewise, insured patients often get only marginally beneficial (or even outright unnecessary) care at mind-boggling cost.

An super-duper uncouth reader might say: Where exactly is this "other people's money" that the uninsured are spending coming from? Doesn't such a ridiculous statistic undermine Goldhill's whole point? Such a clod might argue, "I've racked up more than $10,000 in charges in three hours. For an ambulance ride, an X-ray, six stitches, and an antibiotic IV. I guess I should have explained to the 19-year old who hit me with his car while I was cycling that we were engaging in moral hazard. I guess I could have texted him 'OMG: mrl hzrd plz dnt rn me ovr11111'."

A yet-more uncouth reader still might read Goldhill's proposal for paying for medical expenses -Health Savings Accounts--and exclaim "Dear God, this horseshit again?" After spending a few moments swearing and stomping around the room, this person might wonder how they might be expected to save enough to pay for treatments whose costs might exceed by a factor between 1 and 100 the amount they spend on food in a year:

What about care that falls through the cracks—major expenses (an appendectomy, sports injury, or birth) that might exceed the current balance of someone’s HSA but are not catastrophic? These should be funded the same way we pay for most expensive purchases that confer long-term benefits: with credit.

Here, our reader, by now approaching asymptotal uncouthness, might wonder if all of the health savings accounts in America could cover the cost of extracting David Goldhill's head from his anus (if this reader were either a glutton for punishment or a snarky smartass, this piece would truly be a gift that kept on giving).

But such crudeness has no place in polite debate. David Goldhill is a "media executive", and therefore has numerous great ideas for managing risk and incentive in high-stakes contexts. His opinions are to be respected and his demands obeyed.

Final update: Others noted Goldhill's piece when it was first published last month, and good manners dictate that I credit or scold them accordingly. Consumer Watchdog had a particularly uncouth response. The Economist more politely glossed over the logistical, logical, moral, and sociological merits of the article and contented itself with pointing out that Goldhill was being a bit hasty in demanding the immediate implementation of his ideas, as sudden change is unpleasantly disruptive to all parties involved.