No post on this blog has gotten so much traffic as my analysis a month ago titled “Less Is More: The Ugly Truth about American Health Care.” In response, readers have offered one important correction and a closely-related question, both of which can guide us to a better system. Continue reading “Getting More for Less: A Solution for American Health Care”
- Am I a Radical? — Ezra Klein – Add lobbying reform to the list, and I think Klein and Yglesias are pushing this debate in the right direction.
- The Crackdown on Executive Pay — Justin Fox – Excellent article, as usual, by Fox. Executive compensation is, for all the reasons Fox explains, a really tricky issue, one that I’m struggling with in my own forthcoming book. You won’t do much better than Bebchuk if you’re looking to understand it all.
- Organelle Simulated on Microchip for First Time — Scientific American – One more step toward that brave new world…
- Will Economic Recovery Derail Foreign Policy Reform? — Stephen M. Walt – Sadly, at the current rate, this is exactly where we’re headed…
- Megan McArdle’s Case Against National Health Insurance. Sort of. — Ezra Klein – This is an important rebuttal because most people weighing in on McArdle’s side are doing the same thing: Putting ideology over facts. The guys over at EconLog are the exception to this rule. (Though I don’t appreciate when they group everyone who doesn’t agree with them into the “Statists” bucket because health care is just different than most markets. Some of us may prefer a government-run health care system but look quite libertarian on many other issues.) It’s not about ideology; it’s about empirical and historical evidence.
- How Medical Breakthroughs Happen: A Response to Megan McArdle — Ben Domenech – Outstanding article, explaining a point I made in my health care post but of course laying it out much better than I did. Bravo to Domenech! (And this, by the way, is one example of the facts vs. ideology thing I talk about above.)
- Comets Not So Likely to Smash into Earth and Kill Us All — 80beats – Is this what passes for good news these days?
- Giant Jellyfish Pictures: Japan’s Nomura Invasion — National Geographic – Whoa.
- At $1.5 Million a Day, Health Sector Lobbying Far Outpaces Oil & Gas — Daily Dose – The need for lobbying reform grows with each passing day.
- Health Insurance Exchanges: An Overlooked Key to Reform’s Success — Ezra Klein – Good explanation of the exchanges, but the real gold is the first two paragraphs, which get back to my point about Bill Clinton’s dilemma health care reform: much-needed fundamental change for a population that only grudgingly accepts incremental change. Of course, Klein frames it even better than I did. Also, risk adjustment is very important because it puts the proper incentives in place. Here’s a good explanation by Robert Kuttner: “Risk adjustment refers to the adjustment of payments to health plans (or to doctors) to reflect more accurately the actual health status or recent medical experience of patients. […] If plans receive the same unadjusted premium for each subscriber, then the plan with healthier members reaps an unearned windfall, whereas plans with sicker populations of patients face unfair losses.” This also helps resolve concerns about community rating (see below).
- Senators Seek Ban on Texting While Driving — New York Times – This should be a no-brainer.
- Tanning Beds Declared Carcinogenic, Like Cigarettes and Formaldehyde — 80beats – Consider this another public service announcement: Tan at your own peril.
- Wars, Plagues, and Europe’s Rise to Riches — Nico Voigtländer & Hans-Joachim Voth – This is disturbing but interesting. For those unfamiliar with Thomas Malthus, he basically said that the population would eventually grow too large for the land and resources to support everyone, and we’d eventually suffer greater poverty, etc. He had the misfortune of making this prediction just as the Scientific Revolution was getting started, which would lead to the Industrial Revolution and the modern economy, which looks nothing like the Malthusian economy because technology continually increases our standard of living. Malthus was correct, however, in describing the pre-modern world. The reason, these authors argue, that incomes stayed as high as they did for as long as they did despite the constraints described by Malthus is that wars and disease killed off enough people at a frequent enough pace for the remaining people to enjoy more of the limited resources per person.
- Odds Against Nuclear Disarmament — Charles V. Peña – Quote of the day: “Since the end of the Cold War marked by the opening of the Berlin Wall in 1989, the United States has engaged in nine major military operations, but only one of those – Operation Enduring Freedom – was unambiguously in response to a direct threat to the United States. This is a powerful incentive for countries such as Iran and North Korea to acquire nuclear weapons as the only reliable deterrent against U.S. invasion. As long as the United States continues to have an interventionist foreign policy (and the Obama administration has not overseen a sea change in U.S. foreign policy), it will be next to impossible to prevent proliferation.”
- Health Care Reform and the Unpopular T-Word — David Leonhardt – Leonhardt is all over this debate of late. Here he tears the employer tax deduction a new one…and rightfully so.
- R2P: A Priest, A Linguist, and an Economist Walk into the General Assembly… — William Easterly & Laura Freschi – This is indeed the real issue that just goes over our heads in most foreign policy debates. Intervening can be very beneficial in principle, but in practice it has mostly a terrible history.
- First, Make No Mistakes — Jim Hall – This is a good plea, but it really should be bundled into IMAC. Remember that most medical errors are a derivative of the way we pay for our medical services — overtreatment leads to greater chance of error.
- Krugman Blames Adverse Selection Problem on Government Regulation — Bryan Caplan – I owe it to Caplan to note that he was right from the beginning (which I never denied). He was saying that, because of government regulation, adverse selection does not occur as much as it would in the free market, which Paul Krugman and Tyler Cowen proved in recent posts (see my commentary yesterday). And, to bring this all full circle, the point still remains that private insurers spend a lot of money to overcome adverse selection (but mostly in markets without community rating regulations). Community rating therefore reduces the overall cost to society, as does a public plan. The consumers who may be hurt are low-risk consumers who would have to pay more than their expected future health care costs, but the public plan and subsidies for low-income families go a long way toward resolving that problem.
- Paralysis by Analysis — Bruce Vladeck – Very good history to keep in mind. This also goes back to my point about Waxman-Markey that the intangible (and secondary and tertiary) benefits are usually higher than expected because they’re so difficult to measure (e.g., doing X gives us the option to do Y in the future, which is an even more profitable investment); the same applies to health care reform (and, as I mentioned yesterday, transportation and infrastructure). Also, for those who have a problem with the moral argument of covering the uninsured, keep in mind Vladeck’s quote that “the absence of health insurance kills 18,000-20,000 Americans a year.” That’s 6-7 9/11’s, and think of all the money we spent in a moral crusade (yes, much of it was based on national security concerns for future, larger attacks) to revenge just one 9/11.
I have been promising this post for a month. I’m sorry for the delay. I hope it was worth the wait.
A Health Care Crisis, More or Less
Last month, Atul Gawande—surgeon, professor, and journalist—published an essay in The New Yorker on the disparity and inefficiency of American health care spending, highlighting in particular the poor performance of McAllen, Texas. Gawande’s article rocked the policy world. The real news, though, is not the sad facts that Gawande brought to light, but rather the fact that it is considered news at all, for health economists have spent many years trying to wake up the media and the public to this state of affairs.
Gawande took a commonly accepted premise, “Americans like to believe that, with most things, more is better.” And then he shattered our happy little world, “But research suggests that where medicine is concerned it may actually be worse.”
Okay, it’s not that shocking. More has been the watchword of the last thirty years in more than just health care, and most of us recognize we haven’t exactly been well served by it. More, roughly speaking, is responsible for a housing bubble, a financial crisis, an unsustainably warming climate, and now a health care system that is making us sicker and poorer than most other industrialized nations.
But more isn’t all bad. Any economist will tell you that more is responsible for the unprecedented economic growth of the last century—and hence, the way of life we hold so dear. In fact, it is exactly the opposite of more that we fear the most. Open any newspaper these days, and you’re bound to find the word “rationing” at least once. Maybe we can accept that more is not always better, but in exchange, are we willing to accept…less?