Friday, December 25, 2009

Health care reform and the particularities of the US

The US just took one more step towards reforming its health care system. The reform incorporates a set of regulations, taxes and subsidies to control health prices and increase the number of uninsured. Yet it does not incorporate a "public option"--a government-run insurance to compete with private ones. A few reflections on the reform and its implications for policy debates in other parts of the world:

a. I agree with those that claim that the reform should pass. Yet the loss of the public option is much more significant than many recognize (and justifies why liberals are disappointed). A strong public option would have opened the door for a government-run system in the long run and would have intensified pressures on private insurance. This is now missing.

b. Economic and social reforms are path dependent--something to remember when one things about Latin America and other parts of the world. It is simply difficult to move from a private-dominated system to a public one... or the other way around. The reform is one more reminder that there are many paths towards economic development, even if some of them will be better for equity than others.

c. Will this reform shift the debate on social policy in other parts of the world? I am less optimistic than a few months ago. A system of subsidies and taxes that do not incorporate a public option is quite compatible with the current, weak post-Washington Consensus (or Neoliberalism plus). At the end, this is an important reform for the US but one that may have relatively few implications in other countries.

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