Give It To Us Straight

We cannot, it seems, have a candid national conversation on health care. President Obama's speech the other night was a brilliant performance, and it may improve prospects for congressional passage of his "reform." But no possible plan will fix the "health care problem" for all time. When Obama says that "I am not the first president to take up this cause, but I am determined to be the last," he is indulging his ambition for a special place in history and illustrating why Americans don't discuss health care honestly.

The political problem was simple: Support for "reform" was collapsing. In April, 43 percent felt they'd be better off with his "reform" and only 14 percent didn't, according to a Kaiser Family Foundation poll. By August, it was 36 percent to 31 percent. To restore momentum, Obama needed to convince more people that his program would help them.

Americans generally want three things from their health-care system. First, they think that everyone has a moral right to needed care; that suggests universal insurance. Second, they want choice; they want to select their doctors—and want doctors to determine treatment. Finally, people want costs controlled; health care shouldn't consume all private compensation or taxes.

Appealing to these expectations, Obama told Americans what they want to hear. People with insurance won't be required to change plans or doctors; they'll enjoy more security because insurance companies won't be permitted to deny coverage based on "pre-existing conditions" or cancel policies when people get sick. All Americans will be required to have insurance, but those who can't afford it will get subsidies.

As for costs, not to worry. "Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan," Obama said. He pledged to "not sign a plan that adds one dime to our [budget] deficits—either now or in the future." If you believe Obama, what's not to like? Universal insurance. Continued choice. Lower costs.

The problem is that you can't entirely believe Obama. If he were candid—if we were candid— we'd all acknowledge that the goals of our ideal health-care system collide. Perhaps we can have any two, but not all three.

If we want universal insurance and unlimited patient and doctor choice, costs will continually spiral upward, because there will be no reason or no one to stop them. We have a variant of that today—a cost-plus system, with widespread insurance and open-ended reimbursement. Higher costs push up premiums and taxes. That's one reason health spending has gone from 5 percent of gross domestic product in 1960 to 16 percent in 2007. (Other reasons: new technologies, rising incomes.) But controlling spending requires limits on patients and doctors.