Health care: the economic obstacle

It is up to Mr. Orszag to help the president deliver on two bold promises: to provide near-universal health care without adding to a budget deficit already at record levels, and to reduce health-care costs for regular Americans and businesses. Those promises have Mr. Orszag on a quest to whittle down health-care costs currently borne by the federal government and to find ways to change how medicine is practiced. But the history of medical cost control, like the push for universal health care, has been fraught with trouble. It’s much harder to cut spending than increase it — as Congress demonstrated when it created, then expanded, the Children’s Health Insurance Program, and when it added prescription-drug coverage to Medicare.

Translation: The Obama administration’s goal is “to provide near-universal health care” (expanded demand) and “to reduce health-care costs for regular Americans and businesses” (decrease in price). Now, even those of you who are not economics majors should have learned enough here to know that increased D combined with decreased P requires a big shift of the supply curve downward. To the extent Obama’s plan implements his two goals, an similar order of magnitude downgrade in the amount and quality of medical services are unavoidable. There is no way to avoid this as the economic logic is remorseless.

Meanwhile, Jonah Goldberg explains how ObamaCare cannot possibly be considered a “right” in any meaningful sense of the term.