It is awfully difficult to pass judgment on a health care plan still in formation. The best thing to do is to retreat to the default position, which is to choose some provision or other because your favorite political party or politicians are in favor of it. That is because parties and politicians play more or less true to form during the process of what has turned into a public debate about the shape health reform legislation will take. Watching legislative sausage being made is edifying rather than horrifying.

Various Democrats were at one time, not that many weeks ago, in favor of a scheme that paid for health care that was expanded to cover a much greater part of the population by taxing money spent on the premiums paid for “luxury” health insurance plans. The trouble is that the regulators might well set the minimal level at which taxes kick in at far below the level of plan that most people have. That would have driven many people who had private plans into public plans in violation of the Obama dictate that you could keep a plan if you were happy with it. It would also have constituted a tax on people making far less than the $250, 000 a year Obama cites as the cut off point for those who will not have their taxes increased. But that method of financing is no longer on the table, perhaps because just these objections arose when the trial balloon for that plan was first floated.

Also objectionable would have been a plan that engaged in rationing if that were understood to mean that there was a given bundle of money that had to be distributed against the various services doctors provide and so some services, like heart operations for ninety year olds, would have to be curtailed so that there would be money for heart operations for young people. A model of humane medicine offers a better model than rationing. Does it make sense, for the sake of the patient, to provide a ninety year old with a hip replacement or multiple bypass surgery? Is electing that surgery at that age a way of accomplishing suicide by physician? The same is true of overmedication. People take too many drugs, not too few, and a better medical regime would lead to reduced drug costs. That plan has also fallen by the wayside.

Still around, however, is the idea that cost savings will pay for half the cost of the costs that occur because coverage is expanded. This is a dubious proposition. Doctors are always out to spend money, not to save it, even if they say they are spending the money to remind patients to take their medicines and so treat this as saving the cost of more care later on. Money on unnecessary tests will only be saved if doctors are on salary and if there is sufficient use of information technology to avoid duplication. Yes, the Cleveland Clinic and the Mayo Clinic may be doing the right things, but it will take a long time for medicine in general to develop the technology and the mind set to do this. So Obama and his people are probably wrong about bending the inflation curve any time soon, though the public debate on how to save money may take some of the wind out of the sails of the mantra of “cost saving” unless the legislators find a way to make it work fairly quickly. There is much to be said for an open process whereby every day’s congressional negotiations are on the front of the New York Times the next day and so experts and laypeople can provide a correction course, something that was sadly lacking in the attempt to pass Hillarycare.

Yet the real point for why the nation needs health insurance reform is the original one that motivated it a decade and a half ago, regardless of the attempt to show, today, that the economy as a whole needs to cut down on the total cost of health care. People need better coverage. Forget about people in their twenties. Think about people who are two or three times above the poverty level and where a medical catastrophe can put them behind the eight ball and also think about the millions of people who are being nickel and dimed to death by copayments and deductibles. Obama is right when he says that to stand pat on health care is to guarantee that current inequities will grow and that the economy will be pushed further into the tank. So there are those who want an Obama plan if only to set something into place that will be refined over the years and to establish the principle that health care is a right rather a job perk.

All the special interests benefit from a health care overhaul. Physicians and nurses and pharmaceutical companies all support it, as do unions and corporations. Small businesses don't because they are creatures of the Chambers of Commerce and its right wing laissez faire ideology which is for the free market so long as it doesn't impact on its members. Why are all those dealerships whining about being put out of business? It is the American way. Even insurance companies can swallow one or another version of the Obama plan because it will create a larger market for the insurance companies. Indeed, the most significant criticism of what will evolve into the Obama plan is that it is just the Gephardt plan revisited: have the national treasury give insurance companies oodles of money to cover ever more people under basically the same rules of the game.

Now, Mitch McConnell makes some of these points about the shortcomings of the evolving health reform package and all credit to him. (He was also correct about McCain-Feingold, though the evolution of the media has left that in the dust.) But the Republicans in general have no credibility when it comes to domestic issues. Their idea of domestic policy is to find a way to make rich people richer, and not just through lowering their taxes. The Republicans passed a student loan program that was guaranteed by the federal government but administered through private companies so that those companies could make a profit. And they call that free enterprise. The same is true of the drug program for seniors that people now says works because old people are getting drugs, though the way it works is to turn over the elderly population to the drug insurance people who offer plans that may or may not suit the elderly and that the elderly are supposed to shuffle through. Republicans talk about government being too expensive when it was they who presided over the greatest increase in national debt in world history when they so recently held the reins of government. As Obama says, you would think they would be a little bit ashamed of themselves.

Those to the left of Obama are clearly morally and programmatically superior to those to the right of him, but they are barking up the wrong tree. They repeat the old argument that a centrally planned economy (in this case, the health sector of the economy) would be so much better than what we have presently because it would avoid the duplication and waste inherent in a market economy where multiple competitors waste money on advertising and duplicative efforts and all the other things that happen when there is more than one provider in the field. That additional overhead is more than compensated for by the meanness of competition. Yes, big corporations have expensive paintings on the wall, but they also cut wages to workers and figure out shortcuts in production so that their products sell for less. GE makes very good aircraft engines even if there are and maybe because there are competitors.

The problem that keeps health care so expensive is not, I think, that it is part of the capitalist system but that it is that special kind of capitalist enterprise known as the insurance industry. Overhead is not the insurance industry’s key dysfunction even though the industry does indeed spend a lot of money on advertising and lobbying and employing clerks to turn down claims. That is what it is intending to do because insurance does not provide a good or a service. It supplies only a promise that if you keep providing it with payments it will turn over money to you according to a schedule of benefits it defines. The insurance business takes in money and then finds way to avoid paying money out, which means it finds ways to break its promise. It can do this because it is holding the money and you are not and so you have to justify, through a variety of procedures, getting them to hold to their promises. The same thing happens with banks that have no great desire to increase small scale lending unless they are guaranteed results and can charge huge interest rates. It is the nature of money rather than the nature of competition that leads this to happen.

The question therefore is how to make health the provision of a service rather than the operation of an insurance scheme. I would suggest what are now thought to be the standard remedies, even if they had not become familiar ones until the past few weeks. Doctors should go on salaries. Hordes of doctors should be flown in for sick-ins at armories and ball fields so as to treat poor patients. There should be a rush to develop for the non-hospital patient-doctor interaction the equivalent of the Diagnostic Related Groupings that revolutionized hospital care by rearranging reimbursement so that hospitals were paid per illness rather than per day of hospital care. That led to better care (people were less likely to become weak because of too much bed rest) and lower costs due to the fact that people were out of the hospital in less time. A similar system that saw doctors paid for serving a client rather than for providing a particular service might have similar results. Money may not be the only motive that drives institutions, but it is certainly a major one.

Obama is reticent about talking too much about how a makeover of medical financing will change the nature of medical care for the patient, who will receive the services they need rather than the services, including unnecessary testing, that they want. He doesn’t think he can engage the public in a discussion of real changes in the organization of the profession, even though those changes are the only way to save considerable amounts of money. He thinks that people will shy off their weak support for health insurance reform if it might mean changing the way they use medicine. But that is the necessary requirement for as well as the desirable outcome of reform. And an open legislative process will, I think, get around to those issues soon enough.