Obamacare: making the WorkChoices mistake?
That the American healthcare system is dysfunctional is not hard to show. It is also very complex (not an insignificant factor in its high cost) but has most Americans fairly happy with their healthcare while a relatively small minority are quite badly off. As with US health policy, labour market regulation also typically favours a large majority (employed incumbents) while being very much against the interests of a relatively small minority (labour market entrants and marginal workers).
“Obamacare”, rather than going for root-and-branch reform, is a range of adjustments and add-ons to an already dysfunctional set of public policies: an expensive range of adjustments and add-ons. Being a complex policy reform, it lacks clarity in its content and animating principles, making it harder to argue for and easier to raise fears against.
Which makes it a lot like WorkChoices. Many advocates of labour market reform (such as myself) were very unhappy with WorkChoices: it was complex, rather too keen on putting the boot into unions, did not go far enough in going for regulatory simplicity and hard to argue for. Similarly, many advocates of public health delivery in the US are unhappy with Obamacare as being complex, not going far enough and too interested in pandering to various interest groups.
Having read Murray Horn’s The Political Economy of Public Administration: Institutional Choice in the Public Sector, I understand the political and policy attractiveness of “building on”, rather than replacing. Nevertheless, this seems to me a clear mistake in the case of Obamacare, as it was for WorkChoices, on both policy and politics grounds.
First, much of the benefits to be gained from reform come from making the regulatory structure much simpler. Reducing transaction costs is almost always good public policy, and regulatory complexity is not the way to do that. Second, clear principles are an easier political “sell”. The more complex something is, the more uncertainties and details there are to build fears on. Thirdly, the more one “leaves in place” in a dysfunctional system, the more risk that one will be just perpetuating dysfunction. (Of course, there is also risk of getting rid of highly functional bits: less so if one is not too restrictive.)
The problem with Obamacare may be it involves rather too little “Audacity and Hope” rather than too much. Granted that coming on top of a huge fiscal indulgence and a potentially expensive cap-and-trade system may make it a “step too far”. Granted that “Clintoncare” ran into similar problems in 1992-94. Still, “building on” with WorkChoics failed to ensure that it “took” as public policy, even if one can argue it did help reduce unemployment. Obamacare may not get even as far as being seriously implemented.
“Obamacare”, rather than going for root-and-branch reform, is a range of adjustments and add-ons to an already dysfunctional set of public policies: an expensive range of adjustments and add-ons. Being a complex policy reform, it lacks clarity in its content and animating principles, making it harder to argue for and easier to raise fears against.
Which makes it a lot like WorkChoices. Many advocates of labour market reform (such as myself) were very unhappy with WorkChoices: it was complex, rather too keen on putting the boot into unions, did not go far enough in going for regulatory simplicity and hard to argue for. Similarly, many advocates of public health delivery in the US are unhappy with Obamacare as being complex, not going far enough and too interested in pandering to various interest groups.
Having read Murray Horn’s The Political Economy of Public Administration: Institutional Choice in the Public Sector, I understand the political and policy attractiveness of “building on”, rather than replacing. Nevertheless, this seems to me a clear mistake in the case of Obamacare, as it was for WorkChoices, on both policy and politics grounds.
First, much of the benefits to be gained from reform come from making the regulatory structure much simpler. Reducing transaction costs is almost always good public policy, and regulatory complexity is not the way to do that. Second, clear principles are an easier political “sell”. The more complex something is, the more uncertainties and details there are to build fears on. Thirdly, the more one “leaves in place” in a dysfunctional system, the more risk that one will be just perpetuating dysfunction. (Of course, there is also risk of getting rid of highly functional bits: less so if one is not too restrictive.)
The problem with Obamacare may be it involves rather too little “Audacity and Hope” rather than too much. Granted that coming on top of a huge fiscal indulgence and a potentially expensive cap-and-trade system may make it a “step too far”. Granted that “Clintoncare” ran into similar problems in 1992-94. Still, “building on” with WorkChoics failed to ensure that it “took” as public policy, even if one can argue it did help reduce unemployment. Obamacare may not get even as far as being seriously implemented.