Continuing to hide costs is not exposing them.

Robert Samuelson’s column about health care proposals in today’s Washington Post is interesting. I agree with the gist of what he says, but there are a few phrases that rub me wrong. They’ll be used to advance stupid(er) plans. For example:

For decades, Americans have treated health care as if it exists in a separate economic and political world: When people need care, they should get it; costs should remain out of sight.

Who defines need? In a health system with even minimal government involvement, the wrong person will influence need. That’s minor, I think, because his implication is clear enough to everyone but the most obtuse and/or ideological. But his follow-on, that costs should remain out of sight, is the problem now. Perpetuating that only changes the assumption that medical care should occur regardless of cost to essential medical care should occur regardless of cost. Again, if we can’t define need beyond a placeholder for a basic point, absent individual circumstances, we’re doomed to end up where we are after reforming the system.

The hard questions won’t sit still, because health care (now a sixth of the economy, up from one-eleventh in 1980) is too big to be hidden. Myths abound. Contrary to conventional wisdom, the doubling of premiums for employer-provided coverage doesn’t mean companies shifted a greater share of costs to workers. In both 1999 and 2006, premiums covered 27 percent of costs, says Paul Fronstin of the Employee Benefit Research Institute. It’s simply the rapid rise in total health spending that’s depressed workers’ take-home pay.

Unless we advocate a complete separation of employer and health insurance, using take-home pay as a measuring stick will create sub-optimal solutions within the confines of our already bungled system. And note the key word, depressed. That’s not an accident. People are “suffering,” so something must be done. If the share of costs from premiums is consistent, take-home pay lower than it would be without employer-paid insurance is merely a signal from the market that costs are escalating. To Mr. Samuelson’s earlier point, this should remain out of sight? Without the incentive to accept health insurance benefits as compensation, individuals would see the direct cost of their choices through greater expenditures, rather than “depressed take-home pay”. Presumably, they could then better define need based on their own situation.