THE BLOG
09/07/2009 05:12 am ET | Updated May 25, 2011

Frog and Scorpion Healthcare

Americans are for a starting up a public health care system by a huge majority. The margins in favor of reform are so great that it is not really accurate to even call it an issue. Even as the same majority in number are satisfied with their current health care. Americans just want it, and some great numbers need it. Somehow, in a rare lucidity, the public may see trends that they do not like. Why, then, is Obama losing support on the issue?

On the one hand you have the social progressives that consider anything other than a total public solution a failure and waste of time. On the other hand you have social conservatives that so little understand the logical outcome of the current system incentives that the only thing that concerns them is some misbegotten denial of self interest in defeating anything Obama and the Democrats want to do, and not just in health care. Between these two poles is a public buffeted by misinformation in such abundance and at such a volume that no one can even still hear the train wreck approaching. And the train wreck is inevitable, as most of us still know. The for profit system is as certain to kill, through pricing people out of health care, as was the fabled scorpion certain to sting the frog midstream. The frog's last words were "Why did you sting me, we'll both now die?" The scorpion replied "It is my nature."

Such is the politics of health care. There is so much profit being taken, by so many with so little concern about anything but profit, that you must consider the system a single minded scorpion. It will do what has succeeded for it until what it does no longer succeeds. And for every obsession with formula success, there is a logical conclusion. As long as there is a customer base that is able to pay more in order to live, there will be price increases in order to grow margins. Margins are the measure of success in corporations both for profit and not for profit. Higher margins are the triggers of every executive bonus incentive let in American today. It is a sickness that is more lethal than Swine Flu by tens of orders of magnitude, lethal to long term growth, lethal to the country and lethal to health care consumers, which is everybody, sooner or later. The scorpion might have said "I have a bonus incentive to sting you."

Status quo health care will eventually price itself out of existence. There is no other possible outcome. On private health care's current heading, eventually, government will have to step in to provide public health care as fewer and fewer Americans can afford private health care, as it has done with Medicare, Medicaid and SCHIP already. It is as sure to happen as is another year. The cash cow will die just as the frog died, midstream, disappointing oh so many scorpions who's bonuses were predicated on one last push to increase prices. They will always try to increase prices, it is their nature.

Obama is losing support on the issue not because of the prospect of public health care, he is losing public support because most of us know, even if you never heard of the frog and scorpion, it is not a good idea to trust scorpions. Maybe the world needs scorpions on some Natural Selection level, but a scorpion will never, ever, uphold the Hippocratic Oath.

I, probably, should add that the CBO did not do either the frog or scorpion any good by publishing a naked claim of a trillion dollar cost for expanding health care to the uninsured. Republicans ran with the trillion. To begin with the bottom line was actually 239 billion over ten years and even that number completely discounted any savings from a publicly administered plan. Medicare, a government administered plan, as Krugman points out here has, demonstrably, outperformed private health insurers in cost containment by 1/3 over the period from 1960-2007, Medicare costs rising an average of 8.8% per annum while private rates increased an average of 9.9% per annum. CBO might have assumed similar savings but did not.