Monday, November 18, 2013

Obamacare: A Damage Report

Last weekend, reader MM asked me what I thought of the whole Obamacare rollout fiasco. My thinking has been: Not good. Botching the website was a disaster... for the law, for Obama's presidency, and maybe for modern liberalism. And all of it is made worse because a website is exactly the sort of thing that should not go wrong. Build it. Test it. This is the most important legislation since the Great Society, maybe since the New Deal. Just don't screw it up.

But they screwed it up.

Now Democrats are suffering through a news cycle that won't go away with the signature achievement of Obama's first term (and, let's face it, his whole presidency) taking a daily beating in the headlines. The damage may be worse. Ezra Klein and Evan Soltas at "Wonkblog" have argued that "Obamacare's troubles threaten Obama's core political project." Klein, in particular, has been all doom and gloom on the website issues. In this piece, they claim that more foundational issues are at stake. Here are the crucial paragraphs:
Like many Democrats of his generation, Obama believes that the government is necessary — but that the government must be redeemed if it's to be trusted. He thinks the American people are rightly suspicious that the government doesn't do big things well. He venerates the market's capacity for innovation and efficiency even as he struggles against its ruthlessness and cruelty. And he ran for office convinced that if the American political system was going to be able to address the country's problems going forward, it would require an end to the old ideological battles and the forging of a new policy consensus.

The Affordable Care Act is the purest incarnation of these theories. It's meant to protect Americans from the predations of both the job market and the health-insurance market by making sure the poorest Americans can afford coverage, the sickest Americans can't be denied it and no one is tricked into plans that prove inadequate when health crises strike.

But it's also meant to avoid the pitfalls — both substantive and political — of big-government programs by relying on private insurers competing in tightly regulated, highly transparent, government-structured marketplaces. That's why Obama modeled the plan off of Mitt Romney's largely successful health reforms in Massachusetts. What better way to absorb Republican ideas and generate Republican buy-in then to adopt an idea from one of the GOP's leading lights?
What's immediately useful about this diagnosis is the reminder that Obama's "core political project" is the enactment of left-wing values through centrist or center-right policies. Harness the best aspects of the free market to the government's commitment to the people, and good things will follow.

Perhaps this is modern liberalism? Perhaps the great victory of the Reagan revolution was to inculcate the liberal establishment with elements of neoliberalism. The progressives' suspicion of the free market has been replaced with bland appreciation.

If that is the case, it may be not such a bad fate that Obamacare's debut has come under fire. All of the problems of the rollout have been issues of the market. Every glitch, every error screen, every frustration that has arisen has had to do with the act of shopping for healthcare among multiple plans from multiple providers across fifty states. Americans have long suffered a wholly privatized healthcare system, in which the market failed in every way possible. Relative to every other developed nation, healthcare costs were inflated, and, criminally, millions of Americans were left without insurance. Now we are witnessing the problems of a privatized healthcare system operating with a government mandate that everyone obtain insurance (a damn good thing) facilitated by a deeply flawed website (a damn terrible mistake). Here's how the whole thing could have been made easier: single-payer national health care.

It is worth noting that the introduction and early days of virtually all health care initiatives have run into some trouble. Some pundits have drawn comparisons (of varying value) to the Medicare Part D legislation passed under George W. Bush. Here, again from "Wonkblog," is a collection of headlines from the 1966 Medicare launch. Then, too, the fear was that they would not get enough people to sign up of the millions of seniors they needed. Despite it being a government operation, one heralded by the AMA as the "beginning of socialized medicine," here were the results:
On the whole, however, the enrollment effort worked. Of the 19 million seniors eligible for Medicare, 93 percent enrolled by the summer of 1966. 
If government can sometimes get things right, we can also find plenty of examples of private companies making mistakes comparable to Part of the backlash against Obamacare comes from a sense out there that real tech companies would never have botched their websites like the government just did. After all, websites, servers, visual interfaces, and virtual markets are all the things tech companies know backward and forward. As it turns out, they swing and miss too. Take two examples from the video game industry. The massive multiplayer online game, Star Wars: the Old Republic, which at the time of its release in 2011 was the most expensive video game ever made, ringing in at $200 million, was plagued by server access problems upon launch. These problems paled in comparison to the launch of the latest Simcity by gaming company Electronic Arts, where severely limited server capacity and in-game coding bugs aggravated so many players, they actually petitioned the White House to mandate a universal video game return policy when remote access to servers is defective. (Apparently, that was before Obama had lost his internet credibility. You can't make this stuff up.) Check out Simcity on Amazon... currently it has an average user rating of 1.5 stars with over 2,200 one-star reviews.

Private or public, the Simcity story tells us that bad launches in the internet age can be crippling. Obamacare may yet fall to its irresponsible, shoddy, amateur introduction. That so much of the political agenda of the left wing relies upon Obamacare's success makes this mistake inexcusable. But Obamacare may yet succeed—in fact, I'd wager there's still a better chance it will succeed than fail. Why? Because Obama is in office holding a veto pen until January 2017. Thinkprogress reports that, as the website has improved, more people have been shopping. Good signs. The administration task force bent on fixing the website reports that it has improved tremendously. On average, pages now take less than a second to load (down from 8 seconds) and the user error rate is below 1% (down from 6%). Want to find out? Check out the website functionality for yourself:

But if the whole thing falls under the weight of poor execution, the problem of health care will still require a solution. Maybe we should look to our northern border for inspiration and old fashioned liberalism. There are a lot of myths about it (dispelled here), but here's a good primer on the Canadian health care system.

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