Subsidiarity and Health Care

No concept in Catholic social teaching is more used and abused than the principle of subsidiarity (now frequently conjoined, as in this address by Benedict XVI to the Pontifical Academy of Social Sciences, with solidarity). A significant part of the problem, I think, is the high level of abstraction and inattention to public policy detail that often mark arguments from subsidiarity and/or solidarity. And so Rick Hills's argument over at PrawfsBlawg that we should focus on functional considerations when deciding at what level of government we should regulate health care seems to me exactly the kind of fine-grained public finance analysis that those who take subsidiarity seriously should undertake, even if one might come to different conclusions than Rick does on this or that. After dispensing with "the normatively vacuous precedent slalom that is the PACA litigation," Rick writes that "sensible functional federalism (a) would devolve the regulation of medical practice to the states but (b) would give the national government substantial power to finance health care." As he explains:

First, why give subnational jurisdictions a lead role in the regulation of medical practice? Professional standards for the practice of medicine raise religiously and culturally sensitive issues of life and death, physical privacy, and acceptable risk-taking. National legislation on such matters invites unnecessarily divisive struggles for the commanding heights of federal power. Devolution of such issues reduces the acrimony of pitting Red State folks (who dislike med mal liability but hate avaunt-garde ethical innovations like physician-assisted suicide) against Blue State folks (who have opposite instincts). Given that the choice-of-law rules for medical malpractice and professional discipline predictably assign legislative jurisdiction to the state where medical services are performed, states can easily internalize the costs of their regulatory regimes in terms of inflated or reduced insurance premiums. (This latter point distinguishes standards of professional care from standards for the design of highly mobile pharmaceuticals -- hence, the need for the Food, Drug, & Cosmetic Act).

Second, why give the feds the lead role in healthcare finance? The reason is the familiar point, set forth by Paul Peterson long ago, that the subnational governments cannot redistribute wealth effectively in a federal system characterized by mobility of labor and capital. Any health insurance scheme will involve massive redistribution of wealth from the young to the old, from the rich to the poor, and from the sick to the healthy. The notion that subnational jurisdictions can take the lead in performing these financing functions strikes me as untenable.