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A Ruthless Pragmatism

11:47 AM, Apr 29, 2009 • By MATTHEW CONTINETTI
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That's President Obama's description of his economic team's philosophy in this fascinating interview with the Times's David Leonhardt. Run, don't walk, to read it.

Two takeaways. In the first, Obama describes his touchstone for economic policy:

[D]oes it allow the average American to find good employment and see their incomes rise; that we can't just look at things in the aggregate, we do want to grow the pie, but we want to make sure that prosperity is spread across the spectrum of regions and occupations and genders and races; and that economic policy should focus on growing the pie, but it also has to make sure that everybody has got opportunity in that system.

This is a president concerned with distributive justice to a great degree. And big government is the means by which he can try to achieve his desired distributional outcomes.

In the second takeaway, Obama relates the heartbreaking story of his grandmother's final days:

I don't know how much that hip replacement cost. I would have paid out of pocket for that hip replacement just because she's my grandmother. Whether, sort of in the aggregate, society making those decisions to give my grandmother, or everybody else's aging grandparents or parents, a hip replacement when they're terminally ill is a sustainable model, is a very difficult question. If somebody told me that my grandmother couldn't have a hip replacement and she had to lie there in misery in the waning days of her life - that would be pretty upsetting. ...

So that's where I think you just get into some very difficult moral issues. But that's also a huge driver of cost, right?

I mean, the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here. ...

Well, I think that there is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place. It is very difficult to imagine the country making those decisions just through the normal political channels. And that's part of why you have to have some independent group that can give you guidance. It's not determinative, but I think has to be able to give you some guidance. And that's part of what I suspect you'll see emerging out of the various health care conversations that are taking place on the Hill right now.

What's going on here? To me, Obama is laying out the intellectual case for health care rationing while acknowledging the potential human costs of such a policy. He's saying that, in order to contain costs, under a universal health care program his grandmother might have been denied that hip replacement, or forced to pay for it herself. This is the natural consequence of a universal policy, which would bankrupt the country without some form of rationing care - or put another way, some form of making care more expensive for those the government chooses not to treat for financial reasons. On the actual rationing mechanism, Obama punts, saying that "an independent group" should make recommendations.

In his column last week, Krauthammer anticipated Obama's argument:

In an aging population, how do you keep them from blowing up the budget? There is only one answer: rationing.

Why do you think the stimulus package pours $1.1 billion into medical "comparative effectiveness research"? It is the perfect setup for rationing. Once you establish what is "best practice" for expensive operations, medical tests and aggressive therapies, you've laid the premise for funding some and denying others.

It is estimated that a third to a half of one's lifetime health costs are consumed in the last six months of life. Accordingly, Britain's National Health Service can deny treatments it deems not cost-effective -- and if you're old and infirm, the cost-effectiveness of treating you plummets. In Canada, they ration by queuing. You can wait forever for so-called elective procedures like hip replacements.

Rationing is not quite as alien to America as we think. We already ration kidneys and hearts for transplant according to survivability criteria as well as by queuing. A nationalized health insurance system would ration everything from MRIs to intensive care by myriad similar criteria.