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The Obama administration and their allies in the progressive community have a problem when it comes to selling their brand of health care reform. While they argue that we'll be able to reduce health-care spending and improve quality by having the government intervene and provide subsidies for everybody to get insured, they cannot name a single example at the state level where this has worked. In fact, the opposite has been the case. The most prominent example is Massachusetts, which implemented a plan similar to the one proposed by Obama during the campaign, but has seen costs explode. As the New York Times reported yesterday, "government and industry officials agree that the plan will not be sustainable over the next 5 to 10 years if they do not take significant steps to arrest the growth of health spending."

Anticipating that opponents of the Obama health-care agenda will use Massachusetts as an example of the failure of government run health-care, the progressive Institute for America's Future has come out with a new report arguing that the reason why costs are skyrocketing in Massachusetts is actually that the system relies too heavily on the private sector.

For the uninitiated, both the Massachusetts and Obama plans are similar because they are based on subsidizing individuals to purchase government-designed health care plans on a government-run exchange. The difference is that President Obama and most Democrats want to include a Medicare-like governtment plan in the national exchange with the idea being that it would keep private insurers honest since they will have to "compete" with the government plan. The reality is that since the government will be running the exchange and setting the rules of the game, it will be able to steer people toward the government plan. Thus, it's a clever way of having the government take over the health-care system incrementally while saying they're for "choice" and preserving the free market.  

In a conference call this morning, Diane Archer, the author of the Institute for America's Future's report, said that the Massachusetts plan has run into problems because it relied too heavily on private insurance and it didn't address costs.

"Even with regulation, we cannot count on the private insurers to deliver people the care they need," Archer said. "They must -- it's their business model -- put profits before people's health care, and that's what they do."

Her solution is to create a government plan, to ration care, and have the government tell doctors and patients what types of treatment they should seek for given ailments. Of course, she doesn't quite put it that way.

Instead, she says things such as, "I completely believe that we need to have comparative effectiveness in the mix, protocols, and that we begin to pay in a very transparent way to test, to analyze and to implement systems that pay for services that are effective and cost effective."

She endorsed the idea set forth by Tom Daschle for a Federal Reserve-like panel of experts that would issue guidelines on the cost effectiveness of given treatments and drugs. She said it might be something akin to Britain's National Institute for Health and Clinical Excellence, or NICE, which recently concluded that it was worth $22,750 to extend somebody's life for six months.

The one silver lining of the Massachusetts health care fiasco is that it demonstrates the absurdity of the idea that more government intervention into health care is going to control costs, so it makes sense that in an act of political jujitsu, the left is trying to shift blame to private insurers. Unfortunately, they are aided in this task by the fact that Mitt Romney and his conservative apologists have insisted on identifying MassCare as "free market" reform.

If you really wanted to drive down costs in Massachusetts or anywhere else, the solution is not more government, but actual free market reform. A good example would be eliminating mandates requiring that insurance companies cover certain treatments, so that all people, young or old, healthy or sick, can purchase the type of coverage that they actually need. Is it fair to force a young male to purchase a more expensive insurance policy that covers in vitro fertilization?