THE COSTS OF COST.

Over at The Health Care Blog, Robert Laszweski offers an in-depth analysis of the Obama health care plan. He largely brackets the mandates issue and instead examines, in great detail, the cost control portions of the plan. His conclusion? "Obama would be successful in getting most of the uninsured covered and securing coverage for those that now have it. But when it comes to crafting a system that will not continue to outstrip the rest of the economy in what it costs, I see no evidence that he has tackled the drivers in health care costs—in fact he has likely poured some highly inflationary 'gas on the fire' by adding tens of billions more to the system with no effective cost containment features to offset the new inflationary pressures." This isn't an Obama-specific problem. Laszweski continues:

To really get at costs you have to gore some very powerful political oxen among all of the key stakeholders.McCain won’t do it because he simply doesn’t believe that a direct assault on the market players is the right thing to do—put market incentives in place and it will encourage and reward efficient behavior.Obama and Clinton won’t do it, not because they don’t like government intervention, but because they don’t want to offend key stakeholders who could derail any meaningful health care reform effort.

One of the useful maxims in policy reform is that one man's waste is another man's profit stream. In a sense, when we talk about saving a dollar in health care, we're really just talking about changing who profits from that dollar. If it goes towards insurance administration, the profit portion of that dollar goes to the insurers. If the insurers are reformed, it goes to the taxpayers. And that's, basically, what we're talking about here: Moving dollars around. If we move more of them to taxpayers, the folks who used to be getting those dollars will be pissed.I have a piece in an upcoming Prospect that will look into various theories of cost control in greater detail, but till then, the way to understand the Democratic plans is that they're about the politics, and they really don't have any cost controls. Yet. The two theories of cost control in their plans are 1) that they'll be added in the legislative process, as business buys-in and demands some relief or 2) that they'll be added in a next step -- that reform will first focus on access, and then work towards reining in costs. The way to understand the John McCain health care plan is that it neither controls cost nor expands access. Instead, it figures out ways to scale back the health insurance people buy. That doesn't make it cheaper for folks so much as it leaves them able to afford less of it.