The Hubris Of Government Healthcare Reform: Exit, Voice, and Loyalty

It takes tremendous hubris by Congress, the President and his advisers to include modifications to the current health system that failed at the State level to control medical costs and to lower the number of uninsured.

To get a feel for past state failures to achieve what the federal government is now attempting in healthcare reform read the Wall Street Journal's opinion piece, "The Lesson of State Health-Care Reforms."

Like participants in a national science fair, state governments have tested variants on most of the major components of the health-care reform plans currently being considered in Congress. The results have been dramatically increased premiums in the individual market, spiraling public health-care costs, and reduced access to care. In other words: The reforms have failed.

Many businesses over the years thought they had a better product or plan than the competition. Congress and the President believe their proposed changes to US healthcare are better than the current system. Businesses know that many products and ideas work on paper. When talking it over with friends, family, fellow business owners, advisers, or investors, the ideas work. Many early reviewers, the true believers, love the prototype.

Sadly, the consumer and the marketplace often disagree with entrepreneurs. The consumer does not see the benefit. The product does not do what it advertised. The production and delivery costs are much higher than anticipated. The quality is inferior. The business cannot find the right kind of employees. In the end, many potentially great businesses and products fail.

The concept's originator did not, could not, anticipate all the significant real world effects that affect success or failure. Even if they did see potential problems, their hubris prevented them from admitting the possibility of failure. Their drive to succeed blinds them of reality's marketplace cruelty. Our President and Congress would do well to learn that good intentions do not guarantee an idea's success

Similarly, many existing businesses, after a period of success, fail because they lose their consumer relevancy, prices get too high, quality deteriorates, or better, cheaper substitutes become available. Consumers use their option to 'exit' the business and product and use something else to meet their needs. For elected officials, 'exit' is voting for another candidate at reelection time. Government agencies and programs do not respond to consumer choice.

We now have Congress and the President embarking on a new healthcare adventure. No one can understand all the effects and ramifications of a new US medical insurance and health system. Congress, as we know, responds to reelection politics and not to the marketplace.

Politicians would do well to learn the concepts in the book, "Exit, Voice, and Loyalty" by the economist Albert O. Hirschman. Our elected officials confuse the voice of dissatisfaction with the current healthcare system with a mandate to change our healthcare system. They should become fearful, if they are not already, of the power of 'exit'.

The more our politicians include mandates in the change to current medical care in the US, the more they limit individuals' abilities to go outside the government legislated system. The more Congress reduces the electorate's ability to choose an alternative to Congress's vision of healthcare, the more likely it is for US citizens to 'exit' the Congressional system by voting against those who favored the medical system change.

In private enterprises, consumer choice is visible in a business's profits and losses, acts as a check and a powerful force against bad business ideas. The only equivalent in public enterprises is to vote the officials out of elected office. Healthcare is too much of the US economy, people's daily lives, household costs and concerns not to be a significant impact on the next election, unless employment deteriorates a lot more or there is an overseas US military escalation.