Vetoing healthcare for kids

Sebastian Mallaby has a good column today exploring why Bush’s expected veto of the SCHIP legislation is both bad policy and bad politics. More interesting though is that Mallaby seems to be the rare Washington pundit that recognizes as false one of the primary arguments against government sponsored healthcare: that the private sector can do it better.

But the most troubling aspect of the Bush veto is not statistical. It is, as he would say, "philosophical." "What I'm describing here is a philosophical divide that exists in Washington over the best approach for health care," Bush declared at his news conference. His real objection to Congress's proposal is that it represents "an incremental step toward the goal of government-run health care."

Leave aside the fact that the children's health insurance program is government-financed, not "government-run." Private insurers administer benefits, and private doctors and nurses deliver them; this is not, as Bush's spokeswoman charged last week, "socialized-type medicine." The larger point is that private markets in health care are not necessarily better than the government-run variety.

[Snip]

Because there are limits to the empowerment of consumers, there are limits to how well a private health market can function. And that's before you get to the question of the uninsured, to which the free market has no answer. Some degree of government intervention in health care is therefore inevitable and desirable. It is ideological nonsense to suggest that this intervention displaces an otherwise efficient private market.

Finally, someone within the Beltway understands that markets are not perfect in every scenario. When one experiences a healthcare emergency, it is unlikely that one will be in a position to negotiate prices or examine other treatment options. Understanding that piece of the puzzle, while somewhat obvious, is a step in the right direction.