This is a great dialogue. See Don's latest post here. I feel like my understanding of the issues we're discussing is improving, and I think I've got a much better handle on Don's perspective. I'll follow the numbering system we've been using to keep the points ordered.
1. Government is getting involved because the current system has become so inefficient and ineffective in addressing society's need for broad based health care. The creation of HMOs in the 80s was an attempt to turn everything over to the private sector, and it has created many of the problems we're now encountering. You can't optimize the benefit of social expenditures on health through a largely unregulated private process, which is based on profit maximization. This reform preserves the private system we currently have but increases the role of government in regulating and managing it. There's nothing in that design that violates the laws of economics -- government is constantly changing rules and incentives in the marketplace, and the market adjusts in response. The only thing that will generate bad outcomes is if the government fundamentally disrupts the incentives for private companies to provide coverage and care, and I haven't seen anything that indicates this reform will do that.
