Testing the skills of the Professor in Chief

TESTING THE SKILLS OF THE PROFESSOR IN CHIEF…. President Obama, even before he was president, has always been good at explaining complex ideas in an accessible way, without talking down to his audience. When it comes to the debate over health care reform, that’s a valuable skill, but it’s already being tested.

For the tens of millions of Americans with no insurance, it’s an easy, straightforward pitch — they want coverage, and they’ll get it. For the millions of Americans covered by a government program (Medicare, the VA system), reform may not seem entirely relevant. And for the rest of the country, many of whom are asking “what’s in it for me” right now, selling reform is arguably trickier than it sounds.

The NYT‘s David Leonhardt, who’s done some terrific work on the reform debate, had another interesting piece on this today, noting that most Americans may not have the first idea what reform will mean to them personally, except that it might cost their government more to cover those who are currently lacking insurance. Leonhardt makes the case that these folks may not realize what they’re already paying for.

Our health care system is engineered, deliberately or not, to resist change. The people who pay for it — you and I — often don’t realize that they’re paying for it. Money comes out of our paychecks, in withheld taxes and insurance premiums, before we ever see it. It then flows to doctors, hospitals and drug makers without our realizing that it was our money to begin with.

The doctors, hospitals and drug makers use the money to treat us, and we of course do see those treatments. If anything, we want more of them. They are supposed to make us healthy, and they appear to be free. What’s not to like?

The immediate task facing Mr. Obama — in his news conference on Wednesday night and beyond — is to explain that the health care system doesn’t really work the way it seems to. He won’t be able to put it in such blunt terms. But he will need to explain how a typical household, one that has insurance and thinks it always will, is being harmed.

The United States now devotes one-sixth of its economy to medicine. Divvy that up, and health care will cost the typical household roughly $15,000 this year, including the often-invisible contributions by employers. That is almost twice as much as two decades ago (adjusting for inflation). It’s about $6,500 more than in other rich countries, on average.

We may not be aware of this stealth $6,500 health care tax, but if you take a moment to think, it makes sense. Over the last 20 years, health costs have soared, and incomes have grown painfully slowly. The two trends are directly connected: employers had to spend more money on benefits, leaving less for raises.

In exchange for the $6,500 tax, we receive many things. We get cutting-edge research and heroic surgeries. But we also get fabulous amounts of waste — bureaucratic and medical.

One thing we don’t get is better health than other rich countries, whether it’s Canada, France, Japan or many others.

Ezra Klein has more on this, noting that the employer tax exclusion has “created a fractured, expensive, inefficient health-care system. But people think they benefit from this subsidy. And why not? It’s countertintuitive to say that something that’s making your health-care coverage cheaper than it would otherwise be this year is also making it everybody’s health-care coverage, including yours, a lot more expensive over time. The key to explaining all this, Leonhardt says, is connecting it to stagnant wages.”

The White House hasn’t really tried to make this case to the already-insured Americans wondering what reform will mean for them. Maybe tonight we’ll start to hear more about this.