By Evan Falchuk

Did you ever read The Cat in the Hat Comes Back?

It’s the sequel to The Cat in The Hat and it’s better than the original.  Kind of like how Empire Strikes Back is better than Star Wars.

In the Cat in the Hat Comes Back, the Cat returns to the scene of his first adventure, and accidentally creates what seems to be a manageable problem – a ring of pink goo in the bathtub.  He tells the children he can clean it up.  But every solution he tries creates a new problem.  Great pink spots of goo keep getting spread all over the place.

The cat brings in more cats to help clean up the spots.  These cats – 25 in all, bring increasingly intricate solutions.  But they only spread the spots around more and more, making the problem much bigger, and much worse.

The spots finally get cleaned up, but only when one final cat – so small that you can’t see him – uses a magical power called “VOOM.”  Unleashing VOOM suddenly puts everything back exactly as it was supposed to be.

Dr. Seuss understood people.  When faced with a problem, people tend to want to do something.  But when this happens, people often seriously undervalue the unintended consequences of whatever it is they’re trying.

It happens in business all the time.  You face a problem and decide some new software will fix it.  You rush to build it.  Then, along the way somewhere, maybe millions of dollars later, you realize the software isn’t helping.  In fact, it’s created a whole host of new issues.  You realize, too late, that your real problem had to do with the way your business was organized in the first place.

Politicians are very susceptible to this, especially when dealing with big, important issues.  Who among them wouldn’t want to champion some giant, historic solution to a giant, historic problem?

So, here are three ways the what’s gone on in health reform in Washington DC is the return of the Cat in the Hat – but without the Voom.

1.  “To take spots off THIS bed will be hard,” said the cat.  “I can’t do it alone,” said the Cat in the Hat.

The reform bills have never been based on a vision of changing American health care into some new, coherently different state.  Instead, they are a collection of big and small deals meant to satisfy the needs of one or another Congressman or constituency.    The most recent of these – the deal to exempt union plans from the “Cadillac” tax underscores the point.  Rising health care costs are the most important fiscal issue we face as a country – well, unless those costs are covered by a union benefit plan.

I don’t know that the Cadillac tax was ever a good idea.  But if you’re going to have it, shouldn’t it apply to everyone equally?  If the reason to have it is to get rid of high-cost insurance plans, how does exempting a huge portion of the high cost marketplace further that goal?  It doesn’t, of course.

2. Oh the things that they did! And they did them so hard.  It was all one big spot now all over the yard!

One of the major reasons why health insurance is so expensive is how it’s regulated.  Today, 50 state agencies dictate what companies can sell in their states, what they have to cover, the terms on which they must accept business, and many other important activities.  It adds a significant amount of cost to all policies.  Worse, it makes the market for health insurance deeply uncompetitive and stagnant.  In short, it’s a terrible deal for consumers, and a great one for insurance companies.   The bills in Congress address this issue….by replicating a federal version of this state system.

Now, instead of dealing with 50 regulators, insurers can work closely with just one regulator, if you know what I mean.  This isn’t progress.  It is a failure of imagination.

3.  “Why, Voom cleans up anything clean as can be!”

As a plot device, using Voom is a sort of cheap way to end the chaos unleashed by the Cat in the Hat in a page or so.  But that was the point.  There’s no such thing as “Voom,” even though we all wish there were.  The lesson is this- cleaning up messes is hard, so be careful not to make them in the first place.  Don’t act without thinking.  Realize that once you have a mess, the only way to fix it is not through dramatic short-cuts, but through the hard, daily work of chipping away, one bit at a time.

“And so, if you ever have spots, now and then, I will be very happy to come here again.”