A Short Leash

Americans are pragmatic. They are willing to try solutions that run counter to popular ideologies, especially if the problems (e.g., war, depression) are bad enough. But experimenters are put on a short leash. If the problems not only linger but appear to be getting worse, then the voters effect a reversal of direction as they did last November.

As leaders prove themselves in one area, followers will allow them more rope. Conversely, failure on one project dissipates confidence in other endeavors. The Obama Administration’s forecasts about the economy have proved to be as wrong as its predictions of a warming planet. Now that there are early indicators that the Patient Protection and Affordable Care Act, aka “Obamacare”, will accomplish the opposite of what was intended, the support for repeal could become surprisingly strong despite Democratic control of the Senate and White House.

The basic objectives of Obamacare were to increase the availability of health care as well as lower its cost. Because millions of previously uninsured patients will be entering the system, the number of doctors, hospitals, medications, laboratories, etc. must increase dramatically to accommodate the demand. A market-based system would allow prices for services to rise; attracted by the prospect of making more money, investors would invest in facilities and more students would enter medical and nursing schools. As production of health care goods and services increases, prices will stabilize and could eventually fall.

However, Obamacare has restrictions on rate increases and insurance reimbursements. The evidence is so far anecdotal, but we are not seeing the supply pipeline filling to meet the demand. In fact supply may be decreasing: construction on some new hospitals has been halted, and doctors are retiring without any one to replace them.

Because of the Administration’s failures in other areas, the American people aren’t likely to wait until its full implementation in 2014 to see whether Obamacare is working. For the President's sake we'd better see some results soon. © 2011 Stephen Yuen