The tradeoffs of health reform

Mankiw:

David Brooks gets it right today about the debate over healthcare reform. The fundamental question is, Should Americans embrace a more robust social safety net at the cost of much higher marginal tax rates, reduced work incentives, and a smaller economic pie?

From a strictly economic perspective, there is no right answer to this question. Arthur Okun said long ago that the big tradeoff in economic policy is between equality and efficiency. The pending healthcare reform bill moves us along that tradeoff. Let's just not pretend, as some healthcare reformers would have us do, that we can easily get more equality without paying the price in efficiency.

Put simply, the healthcare reform bill would make the United States more like western Europe. That may mean more security about healthcare, but it also means that future generations of Americans will likely spend more time enjoying leisure (.pdf)

I think Brooks and Mankiw are using the wrong terminology here. This is a tradeoff of subsidizing expanded health coverage, not a tradeoff of reforming the system.

I've discussed plenty of reforms that would increase the efficiency of health care in the US with no costs of higher marginal tax rates, reduced work incentives, or a smaller economic pie.

(The political problem, of course, is that most such reforms run afoul of entrenched interests like the AMA cartel, the AARP, large employers, etc).