06/07/2010 05:12 am ET Updated May 25, 2011

The Health Care Debate Isn't Over... By a Long Shot

In the wake of the acrimonious adoption of the health care bill, it is clear that both proponents and opponents believe that this bill, for better or worse resolved our major health care issues. However, they are wrong; there are many matters that can not be definitively addressed at this time, and as to which the American people will have the final say in determining the consequences of the bill:

• Covering the uninsured will not by itself reduce costs. It may be good policy, but there is no way that providing a good or service previously unavailable to millions of people will reduce its overall cost. Even assuming that emergency room care is more expensive than care in normal channels, a frequent rationalization, it is clear that too many people have no care at all at present. Getting care to such people will not be free, nor somehow have a negative cost.

• Rising health care costs as a percentage of GDP are not inherently wasteful. Reducing such costs - assuming this does happen - will not in itself prove beneficial. These costs are in large part the result of greater longevity resulting in part from health care advances - new techniques, equipment and medicines which prolong and enhance the quality of life. Even where longevity is not enhanced, an improvement in quality is still beneficial. We must not start from the premise that rising health costs are bad per se and take actions that nullify the benefits of so many advances, solely to control costs.

• The problem is not greedy medical insurers. There is no financial metric which indicates that such companies are earning more than a historical average for all American companies. Their stocks have never been significant market out-performers. Sen. Rockefeller's statement at the February 2010 summit that this is a "rapacious industry that does what it wants" is factually unjustified. Too many observers confuse pursuit of profit - necessary for survival - with dishonesty. Simply forcing carriers to disregard pre-existing conditions and insure all comers or price in accordance with what regulators believe is "fair" will not necessarily reduce individual costs, but may drive insurers out of markets ... or out of business. In the wake of Hurricane Charley, the state of Florida tried to limit property insurance premiums, and caused several major carriers to leave the state.

• Reducing aggregate cost of health care - "bending the cost curve" - requires reducing the amount of care which is consumed. This can be done in three ways: (1) government fiat - i.e rationing; (2) market-based mechanisms where people voluntarily consume less care as a result of directly paying for it themselves - e.g. health savings accounts and high deductible plans or increased competition in the insurance market; or (3) keeping people healthier in the first place. The noisy debate about death panels obscures the "inconvenient truth" that one way or the other we can not materially reduce costs without reducing the amount of care, and that doing so will involve many hard choices. Whatever the administration may say, if it is not willing to let markets operate or force/induce people to be healthier, it is going to have to deny care in some manner. Similarly, conservatives can not pretend that letting markets operate will not have the same ultimate effect. However, ...

• Lifestyle matters, a lot. Every study and expert that has addressed the matter agrees that a high percentage of our health care costs are for problems linked to personal choices. Reflect on the massive costs resulting from diabetes, heart disease, stroke, many cancers and traffic accidents and you will quickly realize that getting people to do something about poor diets, lack of exercise, smoking, substance abuse and reckless driving is as close to a painless cost control measure as there is. Whether we do so with carrots or sticks, we can do more to control costs by preventing people from harming themselves than by anything we do with insurance practices or market structure. It is unpopular for both sides to view real wellness efforts as a key part of reform - conservatives arguing about keeping the government out of peoples' lives, and liberals not wanting to cast aspersions on choices made by the poor or ignorant - but no plan will achieve much without doing so.

• Consequences will vary from individual to individual and company to company and in the short term versus the long term. For example, even if the bill does ultimately prove beneficial to the country as a whole, its new taxes will be detrimental to (at least) many individuals and in the short run, may impede economic recovery. Similarly, as Rep. Waxman fails to understand, even if the bill reduces aggregate costs, it is going to impose new net costs on some companies by requiring them to provide coverage or pay penalties and deprive others of current tax benefits. This may all be a net positive for society, but will clearly be a negative for at least some actors.

Throughout the debate, both sides have trivialized the real issues with their finger-pointing and condescension toward each other. There is no magic elixir in the enacted bill or elsewhere that if only "they" would ingest, will lead us to the right answer. We need to start from the right premises and be willing to think objectively in order to make real progress.