More on experimenting with health care and competitveness

Last week, I posted a piece on the role of the states in administering the health care reform efforts. As I argued, health care (both availability and cost) is a key factor in economic competitiveness. Different states are likely to take different routes with respect to setting up a cornerstone of the reform efforts: the health insurance exchanges. That sets up a nature experiment as to which approach will be best to boost state economic competitiveness.
In his column today, Ezra Klein takes up the argument about experimentation (“Health-care proposal would let states decide what ‘real reform’ is”). Klein discusses a bill by Sens. Ron Wyden (D-Ore.) and Scott Brown (R-Mass.) to expand states’ ability to set up various systems. The bill, S.3958 Empowering States to Innovate Act, simply moves up the start date for a state waiver provision that Wyden, and Sen. Bernard Sanders (I-Vt.) got in the health care reform legislation — but was delayed until 2017. As Klein notes:

What Wyden and Brown are offering is the chance for the various sides to prove that they’re right. If industry players make the system work better, then the states that prize their involvement will prosper. If conservative solutions are more efficient, that will be clear when their beneficiaries save money. If liberal ideas really work better, it’s time we found out.

I’m sure that there will be all sorts of arguments against this. For example, I’m sure that some companies will complain about the possibility of having to cope with 51 separate plans (yes 51 — remember DC counts as a state in such matters even though we don’t have a vote in Congress). In part I suspect that delay until 2017 was to give time for a “national” system to be set up that would then be harder for the states to modify.
On the other hand, as my earlier posting points out, we are already headed into a situation of state experimentation. So let’s do it right — rather than half-ass. If Vermont sets up a workable single-payer system, then we will have some important information. If Mississippi’s approach to health care raises the economic competitiveness of that state, then we will have additional information.
So let the grand experiment begin! It can’t be much worse than the dysfunctional system we have right now.

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