Wedgie Time for Peter Orszag?

Wedgie Time for Peter Orszag? July 20, 2012

Did anybody else read this anti-summer break piece by Peter Orszag and feel the urge to give the author a tremendous wedgie?

The question is posed semi-seriously because I wonder if I’m reading this piece too much through the lens of someone who followed Orszag’s shaping of and advocacy for Obamacare and found it contemptible.

Recall that Orszag was director of President Obama’s Office of Management and Budget who touted the long-term effects of the government taking control of even more of America’s healthcare system. He argued that Obamacare could “bend the cost curve” of health care down.

It would do so by rationing care through government review boards, which several conservatives including Sarah Palin labeled “death panels.” Setting aside those barbed semantics, it seemed to me that Orszag’s whole approach to American healthcare was not only beside the point but dangerously so.

The problem with American healthcare, from my point of view, was not a lack of government meddling but a surplus of it. About half of all funds spent on healthcare in this country come from federal, state and local governments and those funds come with some pretty crazy strings attached.

U.S. governments arguably underpay for medical services and so those people with private and employer provided insurance have to make up the difference through increased premiums and fees and — let’s not forget — lower wages.

Regulators further bump up premiums by closely scrutinizing all the ailments that insurance companies “must cover.” They also force emergency rooms and the like to serve everyone, regardless of ability to pay.

The emergency room requirement might not be so bad if it were limited to true, life-threatening medical emergencies. In practice, people without insurance know that they can go to the emergency rooms and not be turned away. So they end up going there with any ailment and creating nightmarishly long lines for people with true emergencies.

Then there is our legal system, which is a true bonanza for trial lawyers. Doctors have to keep up an insane amount of paperwork to prevail in these lawsuits and their liability premiums can be debilitating. New drugs are so expensive largely for the same reason.

And don’t forget the third party payer problem. Most health dollars spent come from government or government-regulated insurance. There is little incentive for patients to shop around and thus impose normal price discipline. That’s the reason hospitals can get away with $6 aspirins.

Orszag took in this true cornucopia of problems and said, You know, the real issue is that there is not enough government control. All of the parties should be forced to behave in certain ways and voila! the costs will come down.

So now Orszag turns to K-12 education, a field much more thoroughly dominated by government than even healthcare. He finds that the kids are getting “dumber and fatter during the vacation.” Though he says he has no intention to “declare war on summer,” he really would like to extend the school year and all but eliminate summer breaks.

Let’s grant that there is some evidence of summer slippage. But to look at the vast wasteland that is American public education — the poor teaching, the awful curriculum, the low standards, the anemic achievement, the institutional resistance to needed reform — and say that the real problem is summer vacation takes a special sort of mind.

One hopes the next time Orszag is called on to give expert testimony, he’ll be taking the short bus to Congress.

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