John jumps into his car and drives down a street. He is so focused on text messaging while driving that he forgets to engage his seat belt. He glances up at the road, and suddenly … a shock! He’s heading straight for an area of broken glass.
If John slams on the brakes, he might throw his body against the windshield and break a few ribs. But if he keeps driving, at worst he’ll suffer a flat tire or two. So what does he decide to do? He keeps driving and hopes for the best.
The next day, John once again decides to drive while texting without a seat belt. And this time, he finds himself driving towards a railroad crossing while a locomotive is bearing down on the intersection. If he slams on the brakes, again, he might break a few ribs. But if he keeps driving, he might not beat the locomotive across the tracks … instead, he might get flattened by it.
This time, what does John decide to do? He slams on the brakes and recites a silent prayer.
From a risk management perspective, John has made a reasonable decision on both occasions. He’s using a technique called baseline scenario analysis, an activity that you might wish to use while considering whether to support the creation of a national health care plan.
Static vs. Dynamic: Coping With Uncertainty
Let’s take a moment and reflect on how John decides on his courses of action. Each day, he is doing the same thing at the same time in the same manner, when he suddenly faces the same decision: should he maintain his course and drive through an obstacle, or should he disrupt his course and avoid the obstacle?
Obviously, John’s circumstances at the moment of his decision bear no impact on his deliberations. After all, on each day, his static position at that specific moment is exactly the same. Then why does he make a different choice on each day? Well, John is mentally projecting what the future might bring under each choice, and he is opting to select the least risky choice each time. In other words, his decision methodology is consistent even though the outcomes of his methodology may vary.
The risk of broken ribs seems quite costly in comparison to the risk of flattened tires, so naturally John chooses to incur the latter risk on the first day. But the risk of broken ribs seems quite modest in comparison to the risk of getting splattered by a locomotive, so John quite reasonably chooses to incur the former risk on the second day.
This approach is itself fairly risky because there are numerous and complex factors at play that will determine whether John’s outcomes are optimal ones, factors that are highly unpredictable and mostly beyond John’s control or influence. So all he can do is accept the fact that he is making decisions in dynamic situations that are changing with every passing moment, and that he must try to make the best choices he can despite the uncertainty of the environment or the outcomes.
The Great Health Care Debate
President Obama and the U.S. Congress are facing a health care policy decision that is similar to John’s, except for one key distinction that makes their decision making process much more difficult; namely, they can’t even agree on the nature of the obstacle! Imagine how difficult it would be for John to make any decision whatsoever if his windshield has fogged up in a rainstorm. He wouldn’t be able to tell whether he is heading towards an area of broken glass, a railroad crossing, or a sheer cliff!
Proponents of a national health care plan aren’t simply arguing that their approach will create a healthier population; they’re also asserting that the current health care system has placed the American economy on a road to ruin, and that drastic measures need to be taken to restore the global competitiveness of U.S. businesses by relieving them of the costs and burdens of insuring their employees. In other words, by positioning their plan as the sole alternative to long term economic collapse, they are attempting to increase the perceived risks of doing nothing (i.e. of maintaining the current baseline scenario), thereby increasing the perceived relative future benefits of implementing their proposals.
Interestingly, opponents of a national health care plan acknowledge that the current baseline scenario is an unacceptable one. After all, a system with close to 50 million uninsured individuals can hardly be considered desirable! So they’ve decided to argue that with a little tweaking, i.e. with a few additional regulations and a smattering of additional enrollment options, a dynamically modified baseline scenario can be achieved, one that projects a future that is far less risky than the static baseline scenario described by proponents of nationalization.
So whom do you believe? What position do you support? Though it’s only natural to focus on the benefits of national health care, you might also want to consider where our economy is headed without universal care – after all, that’s our baseline scenario! – and then ask yourself whether we can achieve a less risky future by simply modifying our current system.