The Bumbling Colossus: The Regulatory State vs. the Citizen; How Good Intentions Fail and the Example of Health Care: A New Progressive's Guide

The 2010 health care reform ("ObamaCare") was a high water mark in the pursuit of the Regulatory Illusion -- the use of government agencies to regulate an industry through administrative discretion, mandates and controls for promised but elusive social ends. Instead we have mounting costs, elaborate bureaucracies, and no prospect of cost reduction except by cutting benefits and services. The Regulatory Illusion imagines an omniscient administrator who can allocate capital, improve decision-making and distribute benefits more fairly than markets and consumer choice can. This seductive approach promises a political free lunch, where public benefits are visible and costs are hidden by absorption into the private sector or the tax base. But repeated careful studies, described here, show how our health care system, single-payer systems, and various regulated industries fail us; the noble public purposes of regulation are lost and patients, consumers and taxpayers are harmed, leaving entrenched special interests, protected by the regulatory regime, to profit at our expense. A tale oft told. The solution in health care is to directly empower the individual instead of the employer or the government -- for example using individual or family high-deductible health savings accounts, funded by government for those who need it, and freeing up insurance markets from the regulatory one-size-fits-all straightjacket so competition for individual needs and preferences shapes coverage and cost. This promotes patient satisfaction, creates real universal coverage and real cost constraints.