Many Americans seem unaware of health care facts

The answer has two parts. The first is that not enough Americans have been forced to realize certain hard truths. Among these hard truths are:

TRUTH No. 1 -- Preventive medicine is probably not cost-effective. According to Congressional Budget Office director Douglas Elmendorf, widely implemented preventive measures other than lifestyle changes would probably cost at least as much, if not more, than treating the problems they are intended to prevent. In an Aug. 9 memo in his CBO blog he noted that, "Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall."

TRUTH No. 2 -- It is literally impossible to expand health care coverage while at the same time lowering overall costs without introducing either rationing or price controls. Why this has not sunk in with the general public is beyond my ability to explain. More people getting better treatment require more doctors, more clinics and more hospitals (Day Five of Economics 101).

TRUTH No. 3 -- Universal health insurance of the sort we have now will do nothing to lower costs because it will not eliminate the moral hazard inherent in providing services at a small fraction of their cost. Universal health insurance will almost certainly expand coverage, but costs will soar. Massachusetts is trying a variation on this theme now with staggering budgetary implications.

The second part of the answer is that Congress has too few tools to achieve the multiple objectives demanded by its constituents.

The people want lower costs, universal coverage, continued breakthroughs in medical science, zero rationing and their own personal physician, among other things.

But economists have long known that to achieve multiple objectives, decision-makers must have at least as many policy instruments as they have targets. The only congressional policy instruments are the budget and the mandate. More money is only part of the answer because more money alone does not address the need to reduce costs. You might be able to kill a moose with one bullet (objective No. 1) but you cannot get it home (objective No. 2) without field dressing it and packing it out.

In other words, the problem as currently stated may be unsolvable without major compromises among the different interest groups because spending alone cannot hit multiple targets. And therein lies the rub. To reach compromise on an issue as complex as this, there must be multiple goodies that can be traded off in the sort of give-and-take that leads to compromise. But there are almost no other goodies on par with health care.

So what will Congress do? Syndicated columnist Charles Krauthammer might be right: At least, I think he is. Congress will opt for universal health insurance of the Massachusetts variety. Then after demand has exploded and costs have gotten almost completely out of control, a new Congress will come back and mandate a system that involves either administrative price controls or out-and-out stand-in-line rationing. There seems to be no other way.

David M. Reaume is a Washington state-based economist who was based for many years in Juneau. His opinion column appears regularly in the Anchorage Daily News.