“Our plan was a state solution to a state problem,” he said while walking his audience through a corporate-style slide presentation, “and his was a power grab by the federal government to put in place a one-size-fits-all plan across the nation.”
I’ve now been in Massachusetts for almost a year and I can tell you what mistakes RomneyCare made: It’s a one-size-fits-all plan that impoverishes the people of Massachusetts and denies them the ability to control their own health care decisions.
The two basic lessons of economics are 1) incentives matter and 2) information matters. Both points are often forgotten, but the second point is especially poorly understood. The “economic problem” is to determine who should produce what, in what manner, where, when, and for whom, given all the constraints imposed on us by reality. This is a big problem for any given market, but for the health care market it’s enormous! It is far too large a problem to be solved in any top-down fashion. Because the information required to solve this problem is so diffuse (indeed, some of the relevant information only becomes available through market actions) it is impossible to collect all the relevant data and make it available to an authority in any usable way. Simply put, the only way to solve the economic problem in the health care industry is through a market.