It’s official: former Democratic Senator Tom Daschle is President-elect Barack Obama’s pick to be the next Secretary of Health and Human Services.

In an unusual step, Obama also said Sen. Daschle would head a new White House Office of Health Reform, with Jeanne Lambrew, the co-author of his recent book on health care, serving as Sen. Daschle’s deputy. Presumably, the new White House office will spearhead the drive to get Obama’s health care plan through Congress.

These days, discussions in Washington about health care have a surreal quality about them. There seems to be a sense that 2009 is different and might be the year when something really big does indeed pass Congress.

That could very well be the case.

But, before such a plan passes, there will necessarily be a return to reality.

Right now, some of the optimism about reform is due to a lack of understanding about financial reality. The public seems to think President-elect Obama can provide more health care for more people without anyone else paying anything more or getting anything less. 

He can’t.

The Obama campaign plan was built around the notion that the federal government could find ways to engineer a more cost-effective health system, thus providing the savings which could be used to subsidize coverage for millions of households.

There is simply no evidence that the government has the capacity to do this. Quite the contrary. What the government can do is impose artificial cost constraints, as other countries do today. But such artificial restraints come at the expense of quality and lead to rationing, not more efficiency.

At some point, reality will set in. The Obama plan cannot deliver all things to all people. The Obama team will, by necessity, have to turn to unpopular taxes or price controls to finance their program. When they do so, the debate will return to planet earth and become more interesting.


December 12, 2008