Editore"s Note
Tilting at Windmills

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January 23, 2007
By: Kevin Drum

UTOPIAN HEALTHCARE....Tyler Cowen, after calling a desire for national healthcare "political irrationality," says private insurance is still our best bet:

The goal is to get (virtually) everyone insured and keep them insured for as long as possible, and yes I know that eventually means health care at 20 percent of gdp and lots of people getting screwed out of just claims for reimbursement. It is simply the best we can do, and for that reason I don't want to tax private health plans.

The ambitious long-run program should be to restructure the insurance industry --through a judicious mix of regulation and deregulation -- to encourage competition across service quality rather than competition across cost-shifting. Frankly I have no idea how to do that but no one has ever convinced me it is impossible or utopian.

I don't even know how you can respond to something like this. It's the best we can do? Even though the world is full of countries that demonstrably do much better than this? We should encourage insurance companies to compete on service quality? In an industry more structurally resistant to this than nearly any other industry I can think of? The amount of government regulation this would take would make national healthcare seem like a libertarian dream. Finally, "I have no idea how to do that," from a scary smart guy who surely knows every conceivable proposal for accomplishing this? What does that tell you?

I apologize for the snark. I know it's annoying. But color me confused. If we snapped our fingers and covered every person in the country today with Medicare, it would cost us way less than 20% of GDP. We might get there eventually, but that will happen regardless of who funds healthcare in the United States. And along the way nobody would be getting screwed out of just claims for reimbursement.

The usual complaint about national healthcare from conservatives and libertarians is that it would stifle innovation. But would it? There are plenty of therapies today that are used almost exclusively by the elderly and are therefore funded almost exclusively by Medicare. They seem to be doing fine. The VA system, which is more centralized than even Medicare, is a gem. What's more, surely designing a government program that's friendly to innovation is less challenging than the Herculean task of somehow forcing the private insurance industry to cover everyone and cover them fairly. I know which challenge I'd rather take on.

Kevin Drum 1:57 PM Permalink | Trackbacks | Comments (62)

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Comments

I am way smarter than Tyler Cowan and I say expand Medicare to cover everyone. There, we're done.

Posted by: jb on January 23, 2007 at 3:02 PM | PERMALINK

Yes, single-payor is the best option, but the real question is how to get there politically. Kevin, do you think there might be some way to do a "creeping single-payor"? What if we instituted employer mandates and provided employers with the opportunity to buy into Medicare... if Medicare is really the most efficient provider (and I think it would be) might they not gain more and more of the market this way, so that in the end private industry is only providing the so-called gold-plated coverage?

Posted by: Wagster on January 23, 2007 at 3:07 PM | PERMALINK

Thankfully, the river Nile is wide and long, and can accommodate all the conservatives in it. Now if we could only get the hippos and crocs to deal with them.

Posted by: Stewart Dean on January 23, 2007 at 3:07 PM | PERMALINK

I've met Tyler Cowan, he's a nice guy. But, as someone who was involved in the libertarian movement for a long time and met lots of people involved, I can tell you that what they say in public is NOT what they say in private. Many of them are opposed to government programs (including health care access) not because it stifles innovation, but because they don't care about the poor. They care about money, business and their own comforts above all.
Don't bother listening to them when they try to tell you otherwise.

Posted by: Mike B. on January 23, 2007 at 3:09 PM | PERMALINK

The ambitious long-run program should be to restructure the insurance industry...to encourage competition across service quality rather than competition across cost-shifting.

"Service quality"? Pretty much everybody wants to get well, don't they?

Posted by: dj moonbat on January 23, 2007 at 3:13 PM | PERMALINK

Do any of us expect that the left can re-engineer national healthcare with government intervention? Even if this was needed, you all know we are going to have a ten year battle to keep the start up cost of this thing from killing health care.

Even now, we have three of four government programs, and ythey are not combined into single payer. We have the VA, medicare, medicaid, child programs, emergency clinics and a whole separate organization to fund research. Each of these is paid from different revenue streams.

If government run single payer is such a good idea, then why have not the experts in frenchmen combined these programs into a single payer?

I tell you folks, we are into a four year battle to keep the big government leftists from taking over; and probably withing a few years we will give up and go back to big government Republicanism.

Mark muy words, Kevin Drum and this continuing nonsense will put Republicans back in power.

Posted by: Matt on January 23, 2007 at 3:17 PM | PERMALINK

Not one in a hundred knows exactly what an underwriter for an insurance co. actually does, or even in many cases, that they even exist. An underwriter selects risks and prices them. Without that function you no longer have an insurance co. That'd be administration only. Without underwriters, it's an office full of clerks, with word processors, claims adjusters denying claims, and big salaries for execs. I can't imagine such an organization.

The basic fact of insurance is that when lawmakers clamp down on underwriting, the ins. cos. simply LEAVE. They withdraw from the market.

As far as "stifling innovation," you have to be a fool or desparate to want new untested medical care. I'd be very frightened of taking any pills that haven't had any time testing. Let others be guinea pigs, it's not for me, thanks.

Posted by: underseige on January 23, 2007 at 3:23 PM | PERMALINK
"Even now, we have three of four government programs, and ythey are not combined into single payer. We have the VA, medicare, medicaid, child programs, emergency clinics and a whole separate organization to fund research. Each of these is paid from different revenue streams."

Are they really from different revenue streams (each as dedicated revenue) or just from different budget departments?

Posted by: King Bonehead on January 23, 2007 at 3:26 PM | PERMALINK

>Do any of us expect that the left can re-engineer national healthcare with government >intervention? Even if this was needed

Let me just point out that it IS necessary to re-engineer healthcare.
I am currently being trained as a nurse in a Master's program built just because the system is so desperately in need of fixing that people are willing to redo the entire system to make sure that happens. Costs are out of control, people are more often victims of malpractice, generally the entire system is badly broken.
Right-wingers pretending that this isn't true simply make it obvious that they have no clue. But, then, they don't want the truth, they want whatever backs up their ideology. Truth is anathema to most of them.

Posted by: Mike B. on January 23, 2007 at 3:27 PM | PERMALINK

The POV of Tyler Cowen and his ilk are easy to understand. Disregard the empirical evidence, no matter how overwhelming, throw up a smokescreen of bullshit speculative considerations, toss in a dash of ideology, and voila! It all makes sense.

BTW Galileo was wrong. Acceleration due to gravity is a function of an object's mass. Come on, what falls faster, a feather or a hammer? Ignore that silly experiment he did with cannonballs and an ill-founded tower. Just reason it out for yourself.

Posted by: alex on January 23, 2007 at 3:27 PM | PERMALINK

Recently, the progressive mantra has been that Medicare is a great example of government success, that it's loved by all its beneficiaries, and it does a great job of covering them. What happened to the constantly decreasing levels of reimbursement for physicians, which was causing many of them to stop covering Medicare patients? What about reports that the elderly were not able to find doctors who would treat them under Medicare? Has all this been solved?

Similarly, now the Veterans Administration is lauded as the model of efficiency and effectiveness, something private industry ought to imitate, with its efficient data storage and access techniques and its concentrations on overall patient wellness. But what about the constant, recently-repeated reports of soldiers fresh from Iraq and Afghanistan, who can't get appointments for MONTHS, and get sporadic treatment thereafter?

Don't get me wrong; I favor a nationalized "single-payer" approach - I just don't think Medicare and the VA are the shining examples that the liberal -- sorry, "progressive" -- writers have been painting them as.

Does anyone have better information?

Posted by: Zandru on January 23, 2007 at 3:29 PM | PERMALINK

I hate my insurance companies. I hate them for mailing credit card offers I don't want. I hate them for overcharging. I hate them for the claims process. I hate them for policies that make me pay for things I don't want. I hate them for raising the rates constantly. Medicare D is terrible. Grandpa is paying $530 this year for the same policy that cost $465 last year. If anyone thinks people like insurance companies and look to them to bail us out, he has not had enough dealings with them.

Posted by: bakho on January 23, 2007 at 3:33 PM | PERMALINK

As usual, clicking on the Tyler Cowen link, and even reading a few of his other posts, provides no brilliance. In fact, his closing account of a physical reminding him of "witch doctors" might suggest he's not overly endowed with grey matter. If anyone reminds me of a witch doctor, it would be Cowen himself with his cabalistic invocations of margins and other poorly understood (by the lay person) economic terms.

He is kind of funny, though, when he suggests insurance companies should compete to see who can approve procedures and claims faster, instead of competing to see who can deny the most expenses. That'll be the day!

Posted by: serial catowner on January 23, 2007 at 3:33 PM | PERMALINK

If a Dem candidate could lay it out this succinctly and clearly, s/he'd win, dangit.

Posted by: ferd on January 23, 2007 at 3:33 PM | PERMALINK

Undersiege...you've hit the nail right on the head. Private insurance companies do not truly want to offer insurance to everyone...they only want to offer insurance to people who they can make a profit off of. That's why the exclude people with preexisting conditions (in health insurance) or people who live in dangerous areas (in home insurance).

The only way insurance truly works from a conceptual standpoint is if it covers ALL risk and spreads the risk across EVERYONE. The reason that the insurance business is so bad from the consumer standpoint these days is that insurance companies are allowed to kick all the high risk out of the pool by refusing coverage.

Now of course insurance companies are private businesses, and therefore have the right to offer coverage only to those customers they choose to, thus leading to the logical conclusion that if you truly want an insurance system where everyone is covered (be it health care, auto, or homeowners), it can't be a system of private insurance companies unless the government is going to force them to cover everyone (which it is not).

Posted by: mfw13 on January 23, 2007 at 3:33 PM | PERMALINK

He is kind of funny, though, when he suggests insurance companies should compete to see who can approve procedures and claims faster, instead of competing to see who can deny the most expenses. That'll be the day!

The only way Medicare HMOs can exist is to deny any form of expensive care, aggressively hassle doctors to cross every t in the forms, arguing with them over spending an additonal 5 minutes with a patient. Then again, maybe they're competing over cost plus contracts to Medicare, with a guaranteed profit. I think we'd be astounded to see how some of these agreements are written.

Posted by: underseige on January 23, 2007 at 3:41 PM | PERMALINK

yes, of course it would stifle innovation - exactly the same way having a government-run military has stifled military innovation.

Posted by: Richard Nixon on January 23, 2007 at 3:41 PM | PERMALINK

How can a smart guy like Tyler Cowan (almost everybody *says* he's smart, anyway) overlook the basics of insurance?

Insurance companies are in business to make money. They provide no concrete service except payment. They get income from customer premiums and investment gains. Every penny that goes out in payments cuts into their profits. Ergo, the interests of health-care consumers and the interests of insurance companies as health-care payment agencies are inherently in conflict.

There's no way around this except regulation, and insurance is very heavily regulated, as far as I know, in all categories and all states. That doesn't stop them from chiseling and trying to weasel out of paying, as we know from recent Katrina experience.

If they have to be part of the medical system, the only fair thing to do is, like with car insurance, to have only a very few broad risk categories and require them to take on anyone who applies. They'll still figure out a way to make money-- it's what they do.

Posted by: Altoid on January 23, 2007 at 3:47 PM | PERMALINK

I haven't yet figured out how mandating insurance coverage is really going to solve the problems that start and end with the current insurance based system. For starters there is the eternal issue of cherry picked pricing. Unless we all become part of the same pool and everybody pays the same premium a mandated plan is doomed to failure.

Posted by: Ron Byers on January 23, 2007 at 3:48 PM | PERMALINK

The goal is not a flawless, utopian system. Many of the other single payer systems around the world have serious problems. But they are not plagued by high anxiety in the population about catastrophic consequences of illness, or the obvious inequities of our system. Or the poor health results of our system.

We can do far better than the current system and need not be paralyzed by the fact that alternatives are not perfect.

We also need to remember that healthcare is not a widget and does not respond to market forces in the same manner. Jiggering tax incentives is not a solution.

Posted by: jb on January 23, 2007 at 3:51 PM | PERMALINK

What the present system is doing is driving the masses to witch doctors.

We're going to have the finest witch doctors in the world in another few years.

Posted by: Dave of Maryland on January 23, 2007 at 3:52 PM | PERMALINK

I'm on the Medicare for all bandwagon too.

Beef it up to:
Cover Everyone
Include everything that should by all rights be included (medical & mental health, prescriptions, optical, dental)
Raise tax enough so it seems "free"

And most importantly:

Propose & pass it quickly in a joint session at 2AM.

One day we wake up and we've all got it.

Posted by: katiebird on January 23, 2007 at 3:53 PM | PERMALINK

Jiggering tax incentives is not a solution.

Bush doesn't want solutions. he wants us all to think the government is incapable of solutions. ..or so it would seem from his actions thus far.

Posted by: cleek on January 23, 2007 at 3:53 PM | PERMALINK

Finally, "I have no idea how to do that," from a scary smart guy who surely knows every conceivable proposal for accomplishing this? What does that tell you?

It tells me that like other libertarians, Cowen is interested in reducing wherever possible the government's role in our lives. No outcome, however desirable, is worth having government involved in daily life. So they find themselves preferring stupid outcomes, for reasons they can't fully explain.

Posted by: dj moonbat on January 23, 2007 at 3:57 PM | PERMALINK

A friend of mine who has many medical problems says that the lion's share of the cost of health care is hospital costs. If the VA system is so good, do daily hospital costs for VA hospitals run $1-2K? If not, why not?

Posted by: Michael7843853 G-O in 08! on January 23, 2007 at 4:15 PM | PERMALINK

Lebanon is exploding and Kevin Drum is blogging about this?

get your own fucking blog

Posted by: cleek on January 23, 2007 at 4:18 PM | PERMALINK

Why does anyone care what Tyler Cowen has to say?

Posted by: Gregory on January 23, 2007 at 4:20 PM | PERMALINK

Similarly, now the Veterans Administration is lauded as the model of efficiency and effectiveness, something private industry ought to imitate, with its efficient data storage and access techniques and its concentrations on overall patient wellness. But what about the constant, recently-repeated reports of soldiers fresh from Iraq and Afghanistan, who can't get appointments for MONTHS, and get sporadic treatment thereafter?

Oh, oh, oh, I know the answer to that question!!! It's because the government is currently run by a bunch of crooks who want to prove that government doesn't work. So they have reduced funding growth for the VA while simultaneously introducing an increase in responsibilities. Thus proving their point. When Clinton was president the VA developed into a fine and efficient system with investments in future infrastructure (the VistA system).

I think that it's safe to say that a single payer system run by a Republican led government would be a disaster. However, I don't think that's necessarily because a single payer system would be a disaster.

Posted by: J Bean on January 23, 2007 at 4:23 PM | PERMALINK

They care about money, business and their own comforts above all.
Don't bother listening to them when they try to tell you otherwise.

Funny. I had a "debate" with a Libertarian who I forced to admit just that. I don't think he wanted to, but he ultimately did. Along with other priceless gems. It's amazing what you can get them to admit when you force them to justify their positions. Especially the less well trained ones.

Posted by: gq on January 23, 2007 at 4:26 PM | PERMALINK

Lebanon is exploding and Kevin Drum is blogging about this???????

First of all, what a cowardly, bed-wetting chicken, to equate a general strike -- even a violent one -- with Lebanon "exploding." I presume Poweline and Instaputz are promoting that spin?

Second of all, if Hezbollah isagain! -- what a counterproductive failure the Israeli attack on Lebanon last summer -- undertaken with this Administration's blessing -- not to mention the Administration's own incompetent Middle East policy, has been.

The US failure in Iraq has apparently emboldened Syria and its strategic allies Iran to seek to redress the balance throughout the region, including in Lebanon.
Our correspondent says Hezbollah seems determined to translate its perceived success against Israel in last summer's war into a new status in the Lebanese power system, diluting or bringing down a government which it sees as being too close to the West.

Tool.

Posted by: Gregory on January 23, 2007 at 4:29 PM | PERMALINK

The answer is FICA tax. Currently, it's extremely regressive and is unfairly focused on the working poor to working Middle. Only the first 94K of our wages are taxed.

I'd lift the ceiling, which would increase revenues by a staggering amount. The increase would be great enough to lower the overall rate . . . which means a tax CUT for most Americans . . . and we could extend Medicare to everyone. Business would no longer have to pay for health care, which might provoke more hiring and/or higher wages . . . and less outsourcing.

Plus, the huge addition in revenue would shore up the Trust Fund for generations.

The answer is staring us in the face.

Posted by: Cuchulain on January 23, 2007 at 4:40 PM | PERMALINK

"Even though the world is full of countries that demonstrably do much better than this?"

Perhaps your astonishment would be lessened if you stopped regarding the sterling quality of European healthcare as a fact beyond dispute and instead as an assertion that many people think is sadly deluded.

Posted by: Cal on January 23, 2007 at 4:40 PM | PERMALINK

Tyler Cowan is a squish. That's why the blog's name is MARGINAL Revolution.

Posted by: SocraticGadfly on January 23, 2007 at 4:48 PM | PERMALINK

Cuchulain

I know there is a wage base on Social Security, but unless it has recently changed, I don't think there is a wage base on the medicare portion of the tax.

Posted by: Ron Byers on January 23, 2007 at 4:48 PM | PERMALINK

Just caught an ad on CNN for King Gravy's speech tonight. It was a series of images of W laying down the law, lecturing the audience, you know, all spiteful vehemence, with, across the bottom, "Promises Made, Promises Kept, Keeping Them Honest", then a shot of Congress looking sullen.

Posted by: cld on January 23, 2007 at 4:50 PM | PERMALINK

I'd say there is only one response. Like it or not (and yes I know you like it) you must conclude that the debate is over. All honest and intelligent people know that national health care should be implemented. Cowen is deeply opposed, very smart and very well informed and he admits that he has no idea how to do anything like as well by any other means.

Cowen knows that his pipe dream is utopian. It is much more likely that Hillary [sorry Senator Clinton] gets it right on the second try.

Needless to say there are many people less honest and more ideological than Cowen, but serious people have reached agreement.

Posted by: Robert Waldmann on January 23, 2007 at 4:56 PM | PERMALINK

Oh and on innovation, most of the really hard part is achieved in universities (mostly medical schools) funded with NIH grants and much of the rest is done just outside the beltway at the NIH intramural research behemoth.

Big Pharma is for tweaking molecules that more or less work and for dealing with the FDA.

Posted by: Robert Waldmann on January 23, 2007 at 4:59 PM | PERMALINK

Our healthcare industry is very much like our military-industrial establishment; top-notch, but very expensive and wasteful.

Everyone should receive a baseline coverage, perhaps funded by lotteries (most of state lottery monies go towards administration anyway).

We all gamble with our health. Why shouldn't gambling profits help fund basic national healthcare?

Posted by: Tom Nicholson on January 23, 2007 at 5:07 PM | PERMALINK

I trust Tyler Cowen's judgment with respect to DC-area ethnic restaurants.

Posted by: RT on January 23, 2007 at 5:16 PM | PERMALINK

So wrong it is sad. ONLY single payer can control costs while also delivering universal coverage and quality health care. The quick reason is in two numbers 96% (% of $ spent that goes to care under Medicare) and 69% (% of $ spent that goes to care under private for profit insurers). Is single payer politically a difficult sell? That depends on whether you give in to the idea that the health insurance industry controls everything, and that neither the interests of the people nor that every other business (except the insurance industry, for profit hospitals/HMOs, Phram) would also benefit, matters. Also it would help if our "friends" who are incrmentalist-centrist-compromisers would study harder before they blog. As policy and economics single payer is actually the only plan that does make sense. Check out the resources section at http://www.pnhp.org

Posted by: drsteveb on January 23, 2007 at 5:16 PM | PERMALINK

It seems to me, that insurance companies are just acting like a really expensive bill paying service. And I don't understand why I have to pay a 30% commission for that.

Posted by: katiebird on January 23, 2007 at 5:19 PM | PERMALINK

I'm sorry, I hit post too fast. I know that "I" don't pay a 30% commission for that "We" do though. And that's my gripe.

Posted by: katiebird on January 23, 2007 at 5:20 PM | PERMALINK

I don't get it -- there is lots of room for innovation in a single payor system. Patients still need drugs, devices, and services that will be covered by the plan but purchased from third parties.

It just will be more difficult to sell a pill for $3.50 when one for 27 cents works just as well.

People can still buy the $3.50 version outside the plan if they want. Any US system would be two-tiered with lots of wealth in the top tier. Let the insurance companies compete for the top tier.

Posted by: jb on January 23, 2007 at 5:57 PM | PERMALINK

Tyler Cowen is simply one of the finest 19th century neo-Victorian minds practicing economics today.

Posted by: Russell Aboard M/V Sunshine on January 23, 2007 at 5:58 PM | PERMALINK

yes, of course it would stifle innovation - exactly the same way having a government-run military has stifled military innovation.

If you're looking for an example of efficiency, low costs, lack of industry/government collaboration, and the importance of results over politics, you might want to look for a different one.

Posted by: harry on January 23, 2007 at 6:43 PM | PERMALINK

I guess he's figured out that healthcare is a bit more complicated than paper clips.

Thank you for calling Tyler out on this. If Tyler's solution to healthcare includes "a judicious mix of regulation and deregulation" then Tyler's own solution depends on something he himself has long advocated as impossible and his position is so weak as to be almost hypocritical. The debate is over. Get universal healthcare and become part of the developed world.

Posted by: still working it out on January 23, 2007 at 11:15 PM | PERMALINK

Universal health coverage will not "stifle innovation", it will result in an explosion of innovation in the form of increased entrepreneurship. Canadians are more entrepreneurial than Americans because they can afford to take more risks (because giving up your job to try and start something new doesn't mean giving up your - or your family's - health insurance). Imagine what that kind of freedom would mean for the American economy.

Posted by: dalai on January 23, 2007 at 11:59 PM | PERMALINK

Didn't Tyler Cowen just dismantle the usual right-wing objection to universal health care of rationing and poor service, let alone "screwing people out of claims" and that he admits the higher cost of his route.

On innovation, pharmas is one of the few areas where UK industry is still world competitive, and that after 55 years of national health.

Scratch the US pharma accounts and see how much they actually invest in research and how much money is spent on promotions, etc. And compare management costs, too.

It all depends how it is structured. Making sure the world markets are open and fair both ways, then we might see some cheaper drugs here. And see how many people now fly elsewhere for operations, etc.

Contrary to propaganda, past and present the US isn't the only place in the world producing cutting edge equipment, surgeries, or therapies.

Posted by: notthere on January 24, 2007 at 12:13 AM | PERMALINK

http://www.house.gov/conyers/news_hr676_2.htm

Rep. John Conyers has introduced this health care proposal. It sounds pretty sensible to me, might need a little tweaking, but is basically what other civilized countries have (along with way better health than we do).

Posted by: Sally on January 24, 2007 at 12:21 AM | PERMALINK

I would like to add my voice to say:

Tyler Cowen is a moron, an idiot, anything that defines stupid.

Why even quote this guy? Really. I can't believe anyone pays him money to spout his nonsense. If this was the Soviet Union, he'd be a shill for Stalinism. That's the level of ridiculousness most comprable to his "commentary."

Posted by: mitchell freedman on January 24, 2007 at 12:27 AM | PERMALINK

Contrary to propaganda, past and present the US isn't the only place in the world producing cutting edge equipment, surgeries, or therapies.

It should also be pointed out that US medical research, much like US research in most other areas, relies heavily on foreign labor.

Every other country has a problem with their best and brightest researchers moving to US universities.

Posted by: slightly peeved on January 24, 2007 at 5:01 AM | PERMALINK

I am Lebanese-American, I have a blog of longstanding that has followed three big Lebanese crises in the past three years, and I am glad Kevin is covering this. Kevin has mused on healthcare for as long as I have read him. Healthcare is a huge issue in the USA and needs discussing. We hardly ever see intelligent analysis of the problem on TV (Hah!) or mainstream newspapers (!!!)

And frankly, riots in Beirut are not the biggest deal on the planet. It is very sad that Lebanon is in flames; we can thank our president for destabilizing the country when he allowed Israel to bomb it this summer. But ... American political bloggers are still going to talk about American subjects - as I do.

Let's keep a little perspective here.

Posted by: Leila on January 24, 2007 at 5:58 AM | PERMALINK

Although the Bush plan to tax "gold plated" health care insurance coverage (if there is any such thing) is a little bit of progressive taxation, the plan won't fly. It does too little for the people who need coverage.

I hope that after 2008, we'll have a government that can move toward a single payer system such as the VA and Medicare. These have been successful and are much more efficient than the current private insurance system. And I fail to understand why health care protection should depend upon where a person works.

Homer www.altara.blogspot.com

Posted by: Homer Hewitt on January 24, 2007 at 10:50 AM | PERMALINK

Alex way up there - I'm not sure what your hammer/feather comment has to do with the discussion, but your "thinking it through for yourself" doesn't quite think all the way through. A feather falls slowly because all those little interlocking filaments resist moving through the air. It's how birds fly, ya know.

Posted by: Rugosa on January 24, 2007 at 2:03 PM | PERMALINK

The problem with escalating costs is due to one simple fact: the elderly and the dying consume far more healthcare in their last years than they ever could have afforded to cover in their entire working lifetimes. This problem only gets worse as the technology gets even better, and the patients get even older and more numerous. My own personal anecdote is my father's mother, who died in her late eighties last summer. During the last 3 years of her life, she was in and out of the hospital multiple times with various infections and other illnesses. During the entire time, she was bedridden and increasingly senile. A very conservative estimate of the cost of all this care would be over $100 K, and this does not even account for the vast amount of personal care provided by my mother and father.

Of course, spending resources in this way is completely unsustainable since you cannot socialize costs that vastly exceeds practically everyone's lifetime ability to pay- there is no one onto whom to spread the cost. The medical profession spreads some of these costs out onto the private purchasers of healthcare and the government does so through payroll and other taxes, but that has its limits since more and more people are consuming such end-of-life goods and services. Any serious reform of healthcare is going to have to deal with this reality first and foremost.

Posted by: Yancey Ward on January 24, 2007 at 2:15 PM | PERMALINK

I still wonder why soi-disant progressives insist on trying to turn a relatively small problem (the 15-20% of Americans without health insurance) into a bigger problem (rationing and waiting periods common in 'single payer' systems for everyone). Why not just focus on those who aren't insured? Why aren't they insured?

There are a handful who are denied coverage, but the majority of the uninsured simply don't want to pay for it. My late father had cancer (in remission) and was still able to get insurance from his employer (he just had to pay for it). He kept that insurance after he retired, to cover the gaps in Medicare, and as a result was able to pay for top-notch care at Memorial Sloan Kettering until he passed away -- and still leave an estate to his heirs. My father never made a lot of mone (he was a social worker) but he was prudent. Fewer middle and lower class Americans are these days.

Getting everyone health insurance coverage isn't rocket science. Part of the solution is to mandate that every American buy health insurance, and subsidize the small minority of the 15-20% of Americans who really wouldn't be able to get insurance otherwise. For the small minority who get rejected by underwriters, have the government offer subsidies to insurance companies willing to take on the additional risk of underwriting these individuals.

Another part of the solution, which few progressives touch on, is to limit illegal immigration of low-skilled laborers who consume more in health care and other government services than they pay in taxes.

Posted by: Dave P. on January 24, 2007 at 4:17 PM | PERMALINK

Anyone who says that government-funded universal health care would stifle innovation in health-care treatments, procedures and devices should have to explain how the US has been able to develop such sophisticated military technology.

If it works in the realm of national defense, it can work in the realm of healthcare: universal coverage, federal funding, and private innovation.

Posted by: DNS on January 24, 2007 at 7:26 PM | PERMALINK

I'm sick of hearing defenders of private insurance using some variation of the "it's the best we can do" argument. They've taken American Exceptionalism and turned it into an explanation for bad policy and political lethargy.

Posted by: DNS on January 24, 2007 at 7:35 PM | PERMALINK

They've taken American Exceptionalism and turned it into an explanation for bad policy and political lethargy.

No they haven't. They've looked at the results of the Oregon referendum, and have concluded, "it's the best we can do now." Nobody is saying we can't (or indeed won't) have single payer at some point in the future. But who's to say that's not still 10 or 15 or 20 years away? In the interim it would be nice to get those 50 million people insured. I'm willing to bet the vast majority of liberals who violently oppose any plan that's not a carbon copy of Canada or Britain are themselves insured. What do they care if another decade or two goes by without universality?

Posted by: anonymous on January 25, 2007 at 12:06 AM | PERMALINK

Another part of the solution, which few progressives touch on, is to limit illegal immigration of low-skilled laborers who consume more in health care and other government services than they pay in taxes.

This would almost certainly exacerbate, not help, the situation, because nearly all immigrants are young, and most of them immediately go to work and pay taxes. Sure, some of them go on to give birth to American babies. But again, babies and young people and young workers don't use much health care on average. Old and increasingly frail non-immigrants do. We need a decent portion of the first group to pay the taxes eaten up by the second group's healthcare needs.

Posted by: anonymous on January 25, 2007 at 12:17 AM | PERMALINK

"Every other country does it" isn't an argument in favor of socialized medicine. It's a classic example of an appeal to popularity.

Paul Krugman was, at one point, arguing for socialized medicine because he felt it was the best way to limit payouts. (Those who don't believe me can pick up a copy of The Age of Diminished Expectations, the 1995 version, and read his essay on Health Care.) He praised the abillity of a single payer to say no.

He also argued that the big problem with health care was that it's not a normal market, in part because of lawyers and in part because doctors, determined to dave their patient's lives, don't care about costs.

I'm against socialized medicine (why has that been abandoned in favor of the term "single payer?"), but Bush's plan strikes me as being socialized medicine run for very beneficiaries.

I sometimes think we might as well adopt socialized medicine whole hog, instead of piecemeal like we've done. (Emergency room treatment cannot be denied, and the costs of treating those who cannot pay is pushed onto those who can-arguably, it'd be cheaper to just treat people before they get to the point where they visit the ER.)

Posted by: Nemo Ignotus on January 25, 2007 at 10:12 AM | PERMALINK

"but the majority of the uninsured simply don't want to pay for it."

If by "don't want to" you mean can't afford it, you might be right. Otherwise, don't speak of what you don't know.

Posted by: Mike B. on January 25, 2007 at 9:20 PM | PERMALINK




 

 

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