Private insurance in the United States suffers from a legitimacy problem: It's hard to trust that the HMO is working in your best interests when they exist to make money, and they make money by rejecting your care. Not every American has an economics degree, but we're not idiots: Incentives matter. Meanwhile, for all the talk you hear of the awful rationing worldwide, there's no developed country where the citizens are even close to as unhappy with their health care as we are. That's true despite waiting lines in Canada, and denial of care in Britain. In part, that's because the systems of other countries aren't nearly as bad as various American interests want you to believe. But it's also because Americans are plagued by the sense that something in their health care system is fundamentally perverse. They're not just having their claims rejected, they're being screwed. Europeans don't have that same feeling. Matt Yglesias, sensibly, wonders whether government could attain a more legitimate role here. I'm skeptical. There's a level of hatred of bureaucracy in this country that's nonexistent in Europe. Which is why ideas like Tom Daschle's proposal for Health Care Federal Reserve have a certain political logic to them. The government may have the credibility to administer the system, but they probably don't have the credibility to act as the final deciders. One could easily imagine a regulatory body, however, that's chaired by doctors and includes consumer representatives, nurses, health economists, and assorted other folks who command high levels of public trust. Such a body wouldn't be "the government," but nor would it be the private market, or profit-focused. Instead it would simply be "public," and anchored by individuals who had the system's best interests in mind. Tyler Cowen may still be right that people won't like being told they can't have what they want, but as lots of management books will tell you, the difference between an adverse decision that people feel is "fair" and an adverse decision they consider illegitimate is sizable.
