The Tao of Conservative Government, Part 1

"Governing a large state is like boiling a small fish," reads the Lao Tzu, one of the foundational texts of Chinese Taoism. Also known as the Tao Te Ching, it holds (according to D.C. Lau, one of its esteemed translators) that ...

... the state or the empire is a delicate thing that can be ruined by the least handling, or a sacred vessel which must not be tampered with. The empire is as much a part of the natural order as [it is a part of] the world of inanimate objects and, being part of the natural order, will run smoothly so long as everyone follows his own nature. To think that once can improve on nature by one's petty cleverness is profanity. The natural order is delicately balanced. The least interference on the part of the ruler will upset this balance and lead to disorder.

This wisdom from the 4th century B.C., out of a cultural tradition not America's own, resonates with some of us moderns today as we consider what to do about, among other things, our health care financing system that threatens to go bust in coming decades, or Social Security's looming fiscal crisis, or our planet's inability to keep sidestepping the climate change coming from all the carbon we are spewing into the air.

This ancient wisdom, applied to today's political controversies, admittedly seems an apostasy to a political liberal such as oldstyleliberal. We liberals are folks who say show me a problem, and I'll show you a way to have the government fix it.

Health care getting too expensive, with a sixth of the populace uninsured? Fix it by legislation mandating that everybody buy health insurance privately, if they can't get it from their employers. Then set up the government as insurer of last resort and give tax breaks to citizens who can't afford the premiums.

Social Security heading for a fiscal crackup as the burgeoning number of retirees drawing from the kitty overburdens the dwindling number of workers feeding the kitty? Fix the system. How, exactly? That remains unclear, but what seems ultra-clear to most liberals is that privatizing Social Security and subjecting it to the ungoverned vicissitudes of financial markets is out of the question.

Global warming threatening to swamp not only the planet's coastlines but also its sustainable agriculture and its potential for economic growth? Again, bring government power to bear on whatever or whoever is responsible for creating the climate change in the first place. Only problem is, we have met the enemy and he is us. We all have a huge carbon footprint. Even on paper, what could the government fix be for that?

It is beginning to become apparent to oldstyleliberal that, well ... that the old-style, liberal approaches to solving the world's problems have gone bankrupt.


Take, for example, the woes of our health care system today. Primary care physician Kevin Pho writes in an op-ed column in a recent USA Today that a real problem is the acute shortage of doctors who aren't specialists, but rather general practitioners, family doctors, and the like. Medicare and the rest of the health care financing/insuring system pay them much less handsomely when they use "30 minutes to discuss a patient's hypertension, diabetes or heart disease" than if they use the same 30 minutes to perform a procedure or render a tangible service. The incentives are all stacked in favor of primary care docs doing more and discussing less.

Meanwhile, there are the "annual government threats to indiscriminately cut reimbursements despite rising office and malpractice costs, [such that] physicians are faced with no choice but to increase quantity to maintain financial viability." Hence, "primary care physicians who refuse to compromise quality are either driven out of business or to cash-only concierge practices, further contributing to primary care's decline."

Patients naturally respond to the demise of the old-fashioned way of interacting with the family doctor by going directly to specialists who are eager to perform procedures that result in themselves, the specialists, being reimbursed generously. In the old days, the family doc would act as an intermediary and clearinghouse for possible specialist interventions, discouraging those that aren't really going to do the patient much good. Today, though, "studies show that increasing fragmentation of care results in a corresponding rise in cost and medical errors."


How did we get things so messed up?

In the estimation of oldstyleliberal, the culprit may have been the litany of attempts over the past half-century or more to "improve" or "fix" the health care system. They have all had in common that they make the consumers of health care services insensitive to the real relationship of benefits to costs, since "someone else" is paying the costs.

So consumers demand health care services more indiscriminately than they otherwise would ... and the primary care physician whose counsel might help avoid that is out of the loop. Because of the laws of supply and demand, prices go up, and the "someone else" bearing the costs — whether an employer, a private insurer, or the government — tries to impose artificial rules to keep things in check.

But the rules typically rebound. For instance, there was a time not too long ago when experts said "managed care" facilities (HMOs and the like) were the fix we needed. The HMOs, originally benign, soon began imposing all kinds of rules on who may see what doctor when and for what, simply to hold down costs. Massive customer dissatisfaction ensued, followed by an exodus from HMOs.

Again, oldstyleliberal believes the underlying problem with HMOs and the various other "solutions" that have been tried is that they have all been attempts to overrule or undermine the health care marketplace. As columnist George F. Will mentioned in this recent piece about Cuba, a market is "an information-generating mechanism, communism cannot know what things should cost."

Neither can the participants in an American health care financing system that suppresses the ability of consumers to find out, or even care about, what things actually cost.

Now, according to Dr. Pho, "if the Democrats' universal health care proposals come to fruition, the primary care system will be inundated with at least 45 million newly insured patients. As Massachusetts is finding out in its pioneering attempt to provide universal coverage, our system is not ready for this burden."

Dr. Pho's prescription

... starts with reforming the physician reimbursement system. Remove the pressure for primary care physicians to squeeze in more patients per hour, and reward them for spending time with patients, optimally managing their diseases and practicing evidence-based medicine. Make primary care more attractive to medical students by forgiving student loans for those who choose primary care as a career and reconciling the marked disparity between specialist and primary care physician salaries.

oldstyleliberal is not convinced, though, that these solutions wouldn't rebound in some unexpected way, should they be enacted, because they don't solve the underlying problem: the health care market has been jiggered and re-jiggered so that the "information" it provides suppliers and consumers with is ever more bogus. It doesn't give anyone any real idea of what things should cost. The reason it doesn't is that the level of demand for health services is divorced from what might be termed "cost-benefits reality" whenever "someone else" pays. Then the "someone else" typically tries to impose artificial cost-cutting measures, which always end up cheating somebody even more than purely market-driven forces might do.

In short, government soultions too often end up boiling the proverbial "small fish" into fish paste. There has to be a better way. oldstyleliberal increasingly looks to the so-called conservative initiatives — what this recent editorial in the Baltimore Sun recently lambasted as John McCain's "raft of small-bore policy ideas centered around giving individuals more control over [health care] spending" — that might allow the bottom-up forces of the marketplace to do what the top-down imperatives of government controls have conspicuously failed to do.