The fourth problem is a problem. (1) We as a country seem to believe in a relatively small government. (2) We also seem to believe that health care should be provided on the basis of how dire your need is rather than how thick your wallet is. (3) And we have good reason to suspect that our health care capabilities will become larger and better as time passes. (2) and (3) are inconsistent with (1). (1) and (3) are inconsistent with (2). (1) and (2) can go together only if (3) is false. I think that (3) is true. That leaves us with a societal choice to make: do we abandon (1) or abandon (2)? I favor throwing (1) over the side, but this is an important issue we can talk about.
I agree with the good professor that (3) should be off the table as an area to "improve" on. But I think that at least some of the conflict between (1) and (2) comes from the way that America--and indeed, the rest of the industrialized world--approaches the problem of (2). That is, we target welfare problems directly, with service provision or vouchers, rather than with a comprehensive income strategy.
Imagine if, rather than giving people food stamps, Section 8 vouchers, welfare payments, public schooling, and so forth, we simply had an incomes program to boost the wages of those whose productivity is not up to providing them a basic, decent standard of living? Leave the justice issues aside--I am not going to try, in this short post, to persuade commenters who disagree that all Americans should have the opportunity to avail themselves of things like housing and healthcare even if they haven't any particular skills. Just accept for the nonce that politically, America is not going to let its poor, elderly and disabled sink into the muck of immiserated poverty, and focus on more efficient ways to do what we are so obviously determined to do.
This would have a couple of salutory effects. For one thing, it would tie welfare to work (except for those who are genuinely too disabled to do anything.) That would add at least some small boost to the labor force, and hence GDP, thus reducing the cost of caring for those who can't quite care for themselves. It would also keep people on the employment train, a vehicle that can lead somewhere a lot better than a welfare check.
But that's not all it would do; it would put choice back in the hands of the consumers. Do poor people want more car and less house? Great; why not give them that choice if it doesn't cost us anything? They could even (whisper it) save the money and do something really important with it at a future date.
Now, healthcare is a special case, because unlike most of the other "basic goods" we think everyone should have, the costs can vary widely from person to person. But there are ways to deal with this--alter the income transfer for different diseases, and then let people decide how to spend the money. Maybe some of them will spend their healthcare money on a fabulous car and let their diabetes fester. This violates a lot of intuitions: the intuition that we only want to help people have medical care, not fabulous cars; the intuition that we have to protect people from themselves by ensuring that they spend the money on what they need, not what they want.
As a radical anti-paternalist, you can imagine I don't have much patience with the latter argument. Who am I to say that your life is not better with a sports car and five years to live? And to the former argument, I point out that in fact, you'll probably end up giving the wastrels less money if they do fritter it away. Because once you've actually provided people a minimum income that is adequate to take care of their basic needs, there's no moral reason not to turn away those who decline insurance from the emergency rooms. Giving people more choices also means allowing them to live with the consequences of those choices.
We'd also save money by targeting the programs to those who actually need them; I don't think I'm on particularly controversial moral ground when I say that Warren Buffett's secretary should not see her payroll taxes go to provide him healthcare.
This will not be perfect, of course. We'd still need the annoying healthcare administrative apparatus to determine, for example, how much to pay for diabetes care. But with a market in place, this isn't as hard as it is when the government is setting all the prices, because it won't be a brute force negotiation between providers and the government, with both lying and bullying the other. We'll have prices from the private sector set by the competitive action of a lot of brains trying to determine a fair price.
But one of the things that everyone involved in the healthcare debate should get over is the notion that we will find a perfect system. Every time I sit through another forum on health care policy, I am forefully reminded of Adam Smith's words in the Theory of Moral Sentiments:
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.No matter what we do to our health care system, it will never much resemble the cool modernistic dreams of socialist realist fiction, where everything is effortlessly resolved by smugly serene Agents of the People. Especially in America, the system will be chaotic, imperfect, and cost more than it could. But this doesn't mean it will cost more than it should. We are a phenomenally rich nation--the richest in the history of the planet (in our weight class, anyway). We can afford to paper over the holes with money.
Wow, just wow. What totally incoherent...do you get paid to write this stuff?
Just accept for the nonce that politically, America is not going to let its poor, elderly and disabled sink into the muck of immiserated poverty, and focus on more efficient ways to do what we are so obviously determined to do.
This is basically correct, but we're politically a lot more likely to let that happen than this:
Maybe some of them will spend their healthcare money on a fabulous car and let their diabetes fester.
There is one problem.
If you have diabetes, you have two problems: you need perhaps $10K per year in health care, and there's a significant chance that you'll need a $150K kidney transplant, especially if you by the fabulous car instead of spending the $10K per year on test strips or an implantable insulin pump.
How will all this hang together?
-dk
Wow, just wow. What totally incoherent...do you get paid to write this stuff?
You mean as compared to you and I, who not only read it, but then write back for free? If that's your attack, she's the only smart one here.
Two honest (i.e., nonrhetorical) questions:
The argument is made here that libertarians need to be realistic and realize that the vast majority of the population is not libertarian and likes them some welfare state and that it's no good pretending the opposite is the case. This seems pretty reasonable to me, so why doesn't this same argument apply to nonpaternalists as well? Most Americans are at at least a little paternalist and prefer service provision to lump sum transfers not because they don't know this is an inefficient way to move up indifference curves, but because they want poor people to spend their money on different things than they otherwise would. So why should radical small gov't types be more realistic but radical anti-paternalists can stand on principle?
If one's only goal were to reduce total government transfers, the inefficiency of transfers is a feature, not a bug (I'm just cribbing off of James Buchanan's "Tax Constitution for Leviathan" here). Obviously, this is probably not anyone's only goal, but if it is a goal, under what circumstances would one prefer fewer, less efficient government transfers to more transfers with less deadweight loss per dollar transferred?
I like the argument for everything but health care. For health care it seems like a bad idea:
1. I think you underestimate the increase in difficulty switching from figuring out which treatments to authorize to figuring out how much cash to hand a person with X health condition. The government has a lot better information in the former case. For example it does need to guess at whether or not the treatment will work and provide extra cash for a second treatment in case it does not.
2. I think you overestimate the market efficiency improvement. I would bet that the price of insurance/medical services would be almost entirely controlled by the amount of cash the government provided for the particular health condition.
3. Our morals are still not going to tolerate letting someone die or suffer horrendously when we have the means to fix it. This will be true even if we gave the person the money to get treatment themselves a year ago and he/she blew it away at Vegas. While they will have less of a moral claim, that moral claim is not zero.
4. Your proposal does not address children, or other people not making their own financial and medical decisions.
5. You create a moral hazard encouraging people to get sick in some circumstances.
6. While normally we should be concerned about the moral hazard of having someone other than the beneficiary pay, with health care being sick is probably a sufficient cost that people are unlikely to greatly increase their risk regardless of who pays the medical bills.
In short, your proposal seems worse than some sort of single payer on every metric except paternalism. Most of us aren't so radically anti-paternalistic as to mind.
I agree with the good professor that (3) should be off the table as an area to "improve" on.
Why? We already have plenty of policies that limit (3), so it's not like we've always taken (3) off the table. I see no reason that we need to do so in the future.
To the extent that additional health care improvement are associated with increased expenditures, we should decide whether those improvements are worth it! Contra Megan, I can certainly see situations in which we'd decide not to have improvements in health care because they are too expensive.
I agree with your main argument here, but the problem I see is that Americans never really would be ok with turning people away from the emergency room if they need care. It doesn't fit our idea of a nice place to live to leave people to die on a street even if they made foolish choices. So maybe national health care is the best alternative to this moral hazard.
I agree with your main argument here, but the problem I see is that Americans never really would be ok with turning people away from the emergency room if they need care. It doesn't fit our idea of a nice place to live to leave people to die on a street even if they made foolish choices. So maybe national health care is the best alternative to this moral hazard.
I have some fairly hard core anti-welfare type people in my family, and even they agree that hospitals have to provide emergency care. We all agree that we don't want a hospital checking for my ability to pay before giving any treatment in an emergency. How much extra health care would we be providing to the uninsured anyways?
What TomO said.
In spades.
Coherent, exhaustive critique of the failings of Megan's missive.
Sometimes the solution is worse than the problem.
Does TomO have a blog? Maybe Megan should give him hers.
I question whether spending an uncapped amount of money on healthcare is a good idea. Healthcare actually has very steep diminishing marginal returns. Your average American has an excellent chance of surviving to 70, but after that, stretching out life expectancy really is not worth it. I'd rather spend a $100,000K less on healthcare, die a year earlier, and use that money to enjoy life when I'm young and healthy. Claiming that I just want money to go to HDTV's is insulting. I would like to work less hours, spend more time with family, and travel more.
(1) We as a country seem to believe in a relatively small government.
(2) We also seem to believe that health care should be provided on the basis of how dire your need is rather than how thick your wallet is....
... a societal choice to make: do we abandon (1) or abandon (2)? I favor throwing (1) over the side, but this is an important issue we can talk about.
~~~
Liberals like DeLong can glibly contemplate throwing our "small", ahem, government "over the side" when nobody has to pay the bill for doing so.
But (2) resolves directly into the poor paying for the rich with massive tax hikes -- CBO says a 50% across-the-board income tax hike by 2030, 90% by 2050, etc. (or the equivalent in a new VAT or whatever). It seems extremely unlikely to me that US politics is going to have the lower-and-middle classes choose to pay tax increases on this scale to susidize the well off and rich up to Bill and Warren in his nursing home.
We have precedent. In 1983, when Social Security went broke the first time, the spending "gap" to be closed was only about 1/12th that projected just for 2030 (which is just the start of things). Congress reacted to that with Great angst ... and closed the gap nearly exactly 50% with a tax increase and 50% with benefit cuts, divided between immediate means-testing and reduction of future benefits for the young. (Which is why SS is a loser for the young of today versus a winner for the old of the past ... but I digress).
The exact same political incentives will face Congress in the late 2020s -- only on a vastly larger scale -- when the ever-bigger bills for Medicare and SS Trust Fund start arriving. There is no reason at all to believe it will behave differently than in the past. We are going to get a compromise of tax increases *plus* program cuts consisting of means-testing for the rich and benefit cuts for the young who have time to make their own arrangements. The "tally the voters' interests" numbers game leading to that resolution, exactly as in the past, is very hard to argue with.
Otherwise we are talking about a tax increase 24 times larger than the 1983 SS fix that paralyzed Congress to the last minute ... and more than seven times larger than the Clinton tax increase that through the Democratic house by one vote and Democratic Senate only on a tie-breaker ... just by 2030 for starters. With no "give" on the program-cutting side, it's just not plausible. And that means these programs of the future will be smaller than today (for individuals, obviously not in aggregate cost).
Frankly, when push comes to big-tax-hike shove, the "progressives" will be the last people to argue against means testing and the rich paying for their own costs, I expect.
I mean, after a generation of arguing that it is morally wrong, regressive, to let the rich keep their own money through tax cuts, they suddenly are going to start arguing that it is progressive to hike taxes on the poorer to make transfers to the rich?
Krugman a told the Asia Times that the US should be collecting 28% of GDP in revenue now -- that's 10 points more than today, and equal to near a 90% income tax increase. Today, for starters!
It's easy for guys like him and DeLong to fantasize that this will all just come true when the bills come in, everyone will happily pony up with no program cuts or means-testing for the rich -- plus pay for the cost of national health care too!
But they should ask themselves ... why does Krugman have the nerve to say this only to an Asian newspaper? Why doesn't he say in his own column...
"We need a 90% across-the-board increase in income taxes *right now* to pay for Medicare and all the rest, because Americans value these programs so much they will happily pay it, and it is better than putting off paying the bill to become larger later. So I publicly call on Obama and Harry and Nancy to embrace the 90% tax increase in this election...."
We know why. Because great truth teller would suddenly become a leper to Obama, Harry, Nancy and the entire left for telling the truth. And ironically, it is the truth. The last thing the Democrats want is for the electorate to face the real coming cost of these programs.
Brad and Paul should stop and think about what this fact predicts about the reaction of the electorate to these costs when they finally do arrive, in the 2020s and after.
Maybe they should also ask themselves, what is "progressive" about having the poorer pay for the richer? ... and what's economically efficient about it? ... and what's that "deadweight cost of taxes" thing that rises with the *square* of the rise in the tax rate that so many other economists talk about?
Tom O.'s point 3 presumes that there is some health delivery system on earth where people are not allowed to die or suffer horrendously when there exists means to stop such suffering or death. This is utterly false. No, Virginia, there is no utopia where everyone gets the existing forms of health care which would prolong their life or stop their horrendous suffering. One of the most frustrating aspects of this debate is that the childish belief persists that technological innovation can be made available to everyone who would benefit from it on an immediate basis, or anything close to an immediate basis. In fact, a strong effort to accomplish this childish dream is quite likely to stifle technological innovation, effectively killing future people who would have been saved.
I've long concluded that the topic is immune to honest discussion, because it is too unpleasant to frankly acknowledge that, at it's core, to decide on a a method of health care delivery is to decide who gets denied what would prolong their life, or end mitigate their suffering. Instead, people prefer to indulge in daydreams that there exist systems where everybody gets what would provide them great benefit.
Will Allen says, "No, Virginia, there is no utopia where everyone gets the existing forms of health care which would prolong their life or stop their horrendous suffering."
I beg to differ. An object lesson you can try yourself. Go to any acute care emergency department that takes Medicare funding (hint: any acute care hospital in the USA)... then proceed to clutch your chest, state that you are short of breath, but be sure to caution the would-be caregivers that you also have no insurance, no Medicaid, and no means of payment whatsoever.
See if you get attention.
(You will.)
You can try it on any populated street in the United States for that matter. My prediction is that no hesitation will occur due to your perceived inability to pay.
Tony, you somehow have concluded that "attention" is synonymous with "best technology".
Will Allen,
I agree that "best technology" won't be given, but as a money saving proposal McArdle's idea relies on pretty much cutting the spenders off. U.S. morality won't stand for it, we are to forgiving of prodigal sons.
And while not the "best technology" I am sure standard care that really won't be cut off will still be pretty expensive.
Our health care system will have to take into account that we can't get the best for everyone. But we are going to provide some standard of care for everyone. I would certainly like it to be a rather decent one. Yes, the rich should still be able to buy better care and thereby fund medical advancements that will hopefully be available to all later on. But you can do that with say a French single payer system.
This would have a couple of salutory effects.
For example, I'd quit my job as an engineer and become a freelance science fiction writer and game designer.
I can't earn a living at that... but if I'm guaranteed a living wage by law no matter what job I have, I'd opt to have fun 24/7.
but if I'm guaranteed a living wage by law no matter what job I have, I'd opt to have fun 24/7.
Same with means testing SS. Unless I can save up enough to fund a significantly better retirement, I might as well blow all my money now and take the retirement. Or with proper estate planning, parents can give about 25K a year tax free to each kid, 50K if he's married. I could make a lot of "net worth" disappear if it meant I'd get SS benefits.
SS has been successful, because everyone gets it. This means that if you want a better retirement then the government provides, you can save up for it. Secondly, if we did something rational like raised the retirement age by 6 months every year we'd cut benefits with minimal impact to anybody's financial planning. It's far better than telling my generation, "screw you, we're going to tax you to hell and you won't get anything back"
TomO,
How can #5 & #6 be true simultaneously? If giving people money for being sick can create moral hazard, it can still do so if you funnel the money through a healthcare provider. Moral hazard doesn't require that the individual have no reason to take care, just decreased reason. (If this were not the case, then there'd be no such concept of negligent driving: the desire not to be injured would be sufficient to induce efficient levels of care.)
I think the number of people who say that we would still provide state healthcare for those who spent state assistance on other things is evidence for my earlier claim: the paternalist features of the welfare state are at least partly intentional. (I'm just making a positive claim here, not a normative one.)
Ryan:
5 and 6 are true because under McArdle's proposal if you are sick you get cash which you can use for anything whereas under single payer you essentially get cash you can only use to pay medical bills.
I can easily imagine that there is some non trivial number of people who are willing to get a serious illness in order to buy luxury goods.
I find it far harder to imagine that there are people who are willing to get a serious disease in order to have their medical bills, which they would not have absent the disease, paid for.
Ryan:
5 and 6 are true because under McArdle's proposal if you are sick you get cash which you can use for anything whereas under single payer you essentially get cash you can only use to pay medical bills.
I can easily imagine that there is some non trivial number of people who are willing to get a serious illness in order to buy luxury goods.
I find it far harder to imagine that there are people who are willing to get a serious disease in order to have their medical bills, which they would not have absent the disease, paid for.
Empathy is of course one of the moral lessons. The direction you indicate would represent a counterflow. For example, it used to be that the one hospital in Texas where any Texan would not be refused treatment for inability to pay was UT Medical Branch in Galveston. Now 'necessity for stabilizing treatment' gets you treated out of virtually any ER.
Salutory?
TomO:
You're reading the proposal differently than I do. I don't read it as saying "give people a lump sum based on their medical needs". I read it as saying "give people a lump sum sufficient to purchase reasonable food, shelter and health insurance". In other words, health care isn't broken out as a separate disbursement, nor is the disbursement conditional on your health condition.
Now without discussion of some sort of insurance reform (must-issue or the like) it's clear that this will not work for health care because people with medical need would be dropped like a hot potato by private insurers, but it doesn't suffer from the flaws you're claiming.
I keep coming back to the notion of the government providing every citizen with a health care line of credit. Any balance on the LOC becomes a tax liability, including an estate tax liability (no exemption on the estate tax either). The line of credit is capped, limiting the liability to the taxpayer but people are perfectly free to spend more money if they've got it. And since any money spent is (at least notionally) going to be paid back it there some incentive to self-ration care. And if you grab it out of the estate, there's an incentive for next-of-kin not to insist on heroic efforts.
I don't claim it's perfect, but it allows people to be in charge of their health care, preserves some incentives for self-rationing, and doesn't destroy the market for health care improvement. in fact, it stimulates it.
Of course, DeLong is ALWAYS looking for an excuse to throw (1) overboard, so his analysis should be taken with several shakers of salt. There is absolutely no reason why improved access to healthcare should have to mean any increase in the size of government.
Megan,
Assuming you want to help out homeless people/beggars on the street, do you hand them money directly, or give to some organization (homeless shelter, food pantry, etc.) that promises to do it? I never give money directly to beggars, since I expect they'll spend it on something that will leave them worse off than they are now. That is, indeed, paternalism. I'm kinda okay with that. I don't think I know what's best for most people most of the time, but I'm fairly sure the bottle of cheap wine isn't going to help out the homeless guy begging on the corner, even if that's how he'd rather be helped. I think some of the health care paternalism is in the same category. Irrational though it probably is, I'm much more willing to pay for your two day stay in the hospital recovering from a heroin OD than I am to pay for your next month's supply of heroin.
Tom O., let me know when those who advocate the French system are willing to tell the lower middle class fat diabetic 75 year old with a severely arthritic hip and and a bad heart that he or she is going to receive the same standard of care as that of a similar person in France. Non-wealthy Medicare recipients in the U.S. face less rationing than any non wealthy people on the planet, and any significant reform is going to change that, which means that, given the how hard the two parties compete for the votes of Medicare recipients, the likelihood of significant change is pretty small.
Megan,
If you really think the nice sports car is all that nifty, then I have an idea... How about you let me keep my money and buy my OWN sports car?
At any rate, I think it's possible to collect some sort of data on what people WOULD do if they were awarded a lump sum of cash upon diagnosis of, say, cancer, rather than welfare in the form of health care services. Why? Because insurance companies have issued thousands of so-called "dread disease" policies over the years, which only pay out if the insured is diagnosed with certain conditions specified in the policy. For example, a $50,000 dollar payout if the insured is diagnosed with cancer.
All one would need do would be to survey this population and observe how often they make luxury purchases within a few weeks of the payout, and compare it to others who didn't purchase a dread disease policy, who are similarly economically situated.
Of course, the underclasses are not likely to have purchased a dread disease policy (and they are usually not offered through employers), so you'd have a middle-class to affluent bias in the study. But it should be illuminating.
How about we invest more money in affordable preventative care (vaccines, etc.), adopt policies that encourage healthier lifestyles (urban design that accommodates pedestrians and cyclists, no subsidies for corn syrup, etc.), and remove the massive incentive doctors currently have to order unnecessary or redundant procedures by curtailing trial lawyers and making it impossible to sue a doctor for failing to order, say, a $10K lab test that no professional would deem medically necessary but is done anyway on the off chance that it reveals something that might get the doctor sued?
To the extent that other countries have better healthcare outcomes (more debatable than universal healthcare advocates like to admit), it's not necessarily because they have government provided healthcare. It's because they have smarter healthcare, whatever system they use.
Will Allen:
Yeah, single payer has that political hurdle. A little smaller than the hurdles facing a more full blown libertarian system, but pretty high.
Nonetheless, I am somewhat hopeful that people who agree with me can eventually convince people that it is a little silly to provide top level single payer health care to all people over 65 regardless of wealth, rather than provide a decent minimum level single payer health care to everyone.
Also, I would agree with the point McArdle has made in other posts that if we ever do get single payer in the U.S. we aren't going to get French level costs essentially because of DeLong's (3). I don't have a big problem with that - I agree with DeLong we will want to spend more on health care going forward. The big questions are how much do you want health care quality to be determined by individual wealth and are you willing to let the state redistribute to prevent that. McArdle seems to agree that we have to let the state redistribute, but wants to do that in what I view as a counterproductive, more expensive way.
Re: Non-wealthy Medicare recipients in the U.S. face less rationing than any non wealthy people on the planet, and any significant reform is going to change that,
Instead we ration care to younger people who don't have the best of jobs. I see a problem with that. If there's going to be rationing (and that's inevitable) why shouldn't it be applied equitably to everyone? Also, the amount of rationing in France is not excatlky onerous. You don't find people dying in the streets after being turned away from a hospital.
Dan and JordanT above speak for me.
I work a tech job because I love math and science, and I want the marginal income gain.
But if the marginal income gain diminishes (especially if it had diminished in the early years) I would also be a sci-fi writer.
Dan and I could collect checks and write books for each other all day.
I'm talking about topping your wages up to $20,000 in an urban area, not topping them up to what most middle class people think of as a tolerable life. If you want to live like a grad student for the rest of your life, we can probably afford that, because most people don't want to live like grad students for the rest of their lives.
I agree with the good professor that (3) should be off the table as an area to "improve" on. But I think that at least some of the conflict between (1) and (2) comes from the way that America--and indeed, the rest of the industrialized world--approaches the problem of (2). That is, we target welfare problems directly, with service provision or vouchers, rather than with a comprehensive income strategy.
The rest of the industrialized world does not approach theme (2) under anywhere near the same level of complexity as America faces. We have a distinct issue here: massive overconsumption. At some point, those that consume their way into poor health must reach a level of "healthcare debt," where they need to have their benefits cut and/or be declared bankrupt. We talk about implicit morality of quality healthcare (for everyone), yet we never want to talk about the implicit immorality the economic drain a select percentage of people have on our current healthcare albatross, Medicare. Until we want to face the fact that healthcare begins with the individual and ends in the O.R., the economic reality will never set in. To put it another way, what's the incentive here?
Imagine if, rather than giving people food stamps, Section 8 vouchers, welfare payments, public schooling, and so forth, we simply had an incomes program to boost the wages of those whose productivity is not up to providing them a basic, decent standard of living? Leave the justice issues aside--I am not going to try, in this short post, to persuade commenters who disagree that all Americans should have the opportunity to avail themselves of things like housing and healthcare even if they haven't any particular skills. Just accept for the nonce that politically, America is not going to let its poor, elderly and disabled sink into the muck of immiserated poverty, and focus on more efficient ways to do what we are so obviously determined to do.
This would have a couple of salutory effects. For one thing, it would tie welfare to work (except for those who are genuinely too disabled to do anything.) That would add at least some small boost to the labor force, and hence GDP, thus reducing the cost of caring for those who can't quite care for themselves. It would also keep people on the employment train, a vehicle that can lead somewhere a lot better than a welfare check.
But that's not all it would do; it would put choice back in the hands of the consumers. Do poor people want more car and less house? Great; why not give them that choice if it doesn't cost us anything? They could even (whisper it) save the money and do something really important with it at a future date.
I wish it were that simple Megan. But in this country we have our answer already: people want BOTH the sports car and the expensive healthcare. Overconsumption. The response to this will be the paternalistic approach - give them the healthcare they need, not the care they deserve.
Now, healthcare is a special case, because unlike most of the other "basic goods" we think everyone should have, the costs can vary widely from person to person. But there are ways to deal with this--alter the income transfer for different diseases, and then let people decide how to spend the money. Maybe some of them will spend their healthcare money on a fabulous car and let their diabetes fester. This violates a lot of intuitions: the intuition that we only want to help people have medical care, not fabulous cars; the intuition that we have to protect people from themselves by ensuring that they spend the money on what they need, not what they want.
As a radical anti-paternalist, you can imagine I don't have much patience with the latter argument. Who am I to say that your life is not better with a sports car and five years to live? And to the former argument, I point out that in fact, you'll probably end up giving the wastrels less money if they do fritter it away. Because once you've actually provided people a minimum income that is adequate to take care of their basic needs, there's no moral reason not to turn away those who decline insurance from the emergency rooms. Giving people more choices also means allowing them to live with the consequences of those choices.
Yes, there still is a moral reason not to turn these people away, and it (unfortunately) rests on the shoulders of our doctors. When patients enter their clinic, they are forced BY LAW to give them the standard of care - which in a technological age is synonomous with expensive. They shall do no harm, or the John Edwards' of the world will be down their throats. Democrats will insist on keeping malpractice torts in their current form, so the only approach to this is to maintain the status quo of expensive test and treatments for people who can neither afford it nor need it.
If it really were as simple as "giving people more choices also means allowing them to live with the consequences of those choices," we would simply let the smokers and over-eaters of our world DIE. After all, it was their choice.
We'd also save money by targeting the programs to those who actually need them; I don't think I'm on particularly controversial moral ground when I say that Warren Buffett's secretary should not see her payroll taxes go to provide him healthcare.
This will not be perfect, of course. We'd still need the annoying healthcare administrative apparatus to determine, for example, how much to pay for diabetes care. But with a market in place, this isn't as hard as it is when the government is setting all the prices, because it won't be a brute force negotiation between providers and the government, with both lying and bullying the other. We'll have prices from the private sector set by the competitive action of a lot of brains trying to determine a fair price.
No matter what we do to our health care system, it will never much resemble the cool modernistic dreams of socialist realist fiction, where everything is effortlessly resolved by smugly serene Agents of the People. Especially in America, the system will be chaotic, imperfect, and cost more than it could. But this doesn't mean it will cost more than it should. We are a phenomenally rich nation--the richest in the history of the planet (in our weight class, anyway). We can afford to paper over the holes with money.
I'm so glad you think we can afford it, because I wholeheartedly disagree. There are BILLIONS of venture capital dollars invested in biotechnology for the next wave of medical treatment breakthroughs. We are spending are way into Medicare bankruptcy now and many of the treatments used on these patients are 5 - 10 years old. Can you imagine what stem cell therapy, bioengineered tissues, and nanotechnology is going to cost??? To somehow suggest that these treatment will be normally dispersed by a wage subisidy progam is nonsense.
You are an economics guru. What's the incentive for us as a society to spend billions of dollars treating individuals who are morbidly obese, chronic substance abusers, and intentionally unhealthy? Honest answer: there is none. From a purely economic point of view, Medicare is probably the worst program our government has going for it right now. A majority of its benefits go to Type II Diabetes, which is a disease that is predominantly self-inflicted through overcomsumption and poor habits and is compounded by medical noncompliance. Most doctors who treat this disease and its myriad of complications will tell you that these patients don't listen to them or don't follow their instructions, thus are destined to consume more healthcare resources. This is an American cultural dillema, not a healthcare-related problme. Give these people all the money they want, they will NEVER get better.
We are not fighting malaria, tyhpoid fever, malnutrition, or any other 3rd world problem. In America, we are fatness. Unless we ever adress the the real problem (read: it's NOT healthcare coverage), we are following the long road of social paternalism to bankruptcy.
Here is one of my preferred methods of dealing with the problem of moral hazard.
Universally available health care, but with caveats. To renew your health (done every year), you need to go to an administrative office. You walk in and get a ticket, expiring in 15 minutes. You can use the ticket at the registration office 2 miles away, accessible only on foot.
Anyone who can't run 2 miles in 15 minutes is obviously not taking care of themselves; why should the taxpayers be expected to take care of them?
I agree with the good professor that (3) should be off the table as an area to "improve" on. But I think that at least some of the conflict between (1) and (2) comes from the way that America--and indeed, the rest of the industrialized world--approaches the problem of (2). That is, we target welfare problems directly, with service provision or vouchers, rather than with a comprehensive income strategy.
The rest of the industrialized world does not approach theme (2) under anywhere near the same level of complexity as America faces. We have a distinct issue here: massive overconsumption. At some point, those that consume their way into poor health must reach a level of "healthcare debt," where they need to have their benefits cut and/or be declared bankrupt. We talk about implicit morality of quality healthcare (for everyone), yet we never want to talk about the implicit immorality the economic drain a select percentage of people have on our current healthcare albatross, Medicare. Until we want to face the fact that healthcare begins with the individual and ends in the O.R., the economic reality will never set in. To put it another way, what's the incentive here?
Imagine if, rather than giving people food stamps, Section 8 vouchers, welfare payments, public schooling, and so forth, we simply had an incomes program to boost the wages of those whose productivity is not up to providing them a basic, decent standard of living? Leave the justice issues aside--I am not going to try, in this short post, to persuade commenters who disagree that all Americans should have the opportunity to avail themselves of things like housing and healthcare even if they haven't any particular skills. Just accept for the nonce that politically, America is not going to let its poor, elderly and disabled sink into the muck of immiserated poverty, and focus on more efficient ways to do what we are so obviously determined to do.
This would have a couple of salutory effects. For one thing, it would tie welfare to work (except for those who are genuinely too disabled to do anything.) That would add at least some small boost to the labor force, and hence GDP, thus reducing the cost of caring for those who can't quite care for themselves. It would also keep people on the employment train, a vehicle that can lead somewhere a lot better than a welfare check.
But that's not all it would do; it would put choice back in the hands of the consumers. Do poor people want more car and less house? Great; why not give them that choice if it doesn't cost us anything? They could even (whisper it) save the money and do something really important with it at a future date.
I wish it were that simple Megan. But in this country we have our answer already: people want BOTH the sports car and the expensive healthcare. Overconsumption. The response to this will be the paternalistic approach - give them the healthcare they need, not the care they deserve.
Now, healthcare is a special case, because unlike most of the other "basic goods" we think everyone should have, the costs can vary widely from person to person. But there are ways to deal with this--alter the income transfer for different diseases, and then let people decide how to spend the money. Maybe some of them will spend their healthcare money on a fabulous car and let their diabetes fester. This violates a lot of intuitions: the intuition that we only want to help people have medical care, not fabulous cars; the intuition that we have to protect people from themselves by ensuring that they spend the money on what they need, not what they want.
As a radical anti-paternalist, you can imagine I don't have much patience with the latter argument. Who am I to say that your life is not better with a sports car and five years to live? And to the former argument, I point out that in fact, you'll probably end up giving the wastrels less money if they do fritter it away. Because once you've actually provided people a minimum income that is adequate to take care of their basic needs, there's no moral reason not to turn away those who decline insurance from the emergency rooms. Giving people more choices also means allowing them to live with the consequences of those choices.
Yes, there still is a moral reason not to turn these people away, and it (unfortunately) rests on the shoulders of our doctors. When patients enter their clinic, they are forced BY LAW to give them the standard of care - which in a technological age is synonomous with expensive. They shall do no harm, or the John Edwards' of the world will be down their throats. Democrats will insist on keeping malpractice torts in their current form, so the only approach to this is to maintain the status quo of expensive test and treatments for people who can neither afford it nor need it.
If it really were as simple as "giving people more choices also means allowing them to live with the consequences of those choices," we would simply let the smokers and over-eaters of our world DIE. After all, it was their choice.
We'd also save money by targeting the programs to those who actually need them; I don't think I'm on particularly controversial moral ground when I say that Warren Buffett's secretary should not see her payroll taxes go to provide him healthcare.
This will not be perfect, of course. We'd still need the annoying healthcare administrative apparatus to determine, for example, how much to pay for diabetes care. But with a market in place, this isn't as hard as it is when the government is setting all the prices, because it won't be a brute force negotiation between providers and the government, with both lying and bullying the other. We'll have prices from the private sector set by the competitive action of a lot of brains trying to determine a fair price.
No matter what we do to our health care system, it will never much resemble the cool modernistic dreams of socialist realist fiction, where everything is effortlessly resolved by smugly serene Agents of the People. Especially in America, the system will be chaotic, imperfect, and cost more than it could. But this doesn't mean it will cost more than it should. We are a phenomenally rich nation--the richest in the history of the planet (in our weight class, anyway). We can afford to paper over the holes with money.
I'm so glad you think we can afford it, because I wholeheartedly disagree. There are BILLIONS of venture capital dollars invested in biotechnology for the next wave of medical treatment breakthroughs. We are spending are way into Medicare bankruptcy now and many of the treatments used on these patients are 5 - 10 years old. Can you imagine what stem cell therapy, bioengineered tissues, and nanotechnology is going to cost??? To somehow suggest that these treatment will be normally dispersed by a wage subisidy progam is nonsense.
You are an economics guru. What's the incentive for us as a society to spend billions of dollars treating individuals who are morbidly obese, chronic substance abusers, and intentionally unhealthy? Honest answer: there is none. From a purely economic point of view, Medicare is probably the worst program our government has going for it right now. A majority of its benefits go to Type II Diabetes, which is a disease that is predominantly self-inflicted through overcomsumption and poor habits and is compounded by medical noncompliance. Most doctors who treat this disease and its myriad of complications will tell you that these patients don't listen to them or don't follow their instructions, thus are destined to consume more healthcare resources. This is an American cultural dillema, not a healthcare-related problme. Give these people all the money they want, they will NEVER get better.
We are not fighting malaria, tyhpoid fever, malnutrition, or any other 3rd world problem. In America, we are fatness. Unless we ever adress the the real problem (read: it's NOT healthcare coverage), we are following the long road of social paternalism to bankruptcy.
oh and one more thing: any politician that supports universal healthcare AND corn subsidies is trying to bankrupt our country.
I bet upwards of 20% of the population would be willing to live like that if it meant they didn't have to work.
The argument that our morals will not allow us to refuse treating those in need is nonsense. We already do this, even if they are covered by Medicare and Medicaid. Other "more enlightened" western democracies do this as well. Where the rubber meets the road is when you tell those with the means that the level of care they can receive is also going to rationed for purposes of equality. And if you don't think this can happen in an "enlightened" democracy, then I point you to Canada- there you can't pay more for a treatment than the government pays for the same thing, and the reason they do this is to prevent the wealthier citizens from outbidding the government for healthcare resources and jumping queues. This motivation is also behind progressives' call for cost controls on healthcare provision.
In short, DeLong will not be able to jettison (1) without tossing out (3), too. Someone always pays the piper, and the big government healthcare provider will simply take it out of the hides of those who would have benefitted from the treatments never developed, and out of the hides of those that could afford more, but are not allowed to buy, either because they no longer have the resources due to the increased taxes, or because there is a price ceiling on the cost of the treatment.
I wonder if there are any examples of countries with a different set of constraints that have been down this road before? Let's see... yep, most of Europe doesn't have constraint 1) but does have 2) and 3) (or did back when they were busy implementing thier universalist medical systems). So did they get 2) & 3) because they didn't have to worry about 1)? Sure did! For a very, very little while. Then cost overruns and the only politically permissable responses to those ballooning costs quietly and quite effectively snuffed out 3) so they were left with only 2).
Oh, but they do so get some medical technology increases, they just import the ones that seem most efficacious after they have been proven and been refined to something like cost effectiveness in the American system first. Of course, if the American system follows their lead, we prob. won't have anywhere to import out nice new medical technology from.
Here's some predictions for you. 1) We will get single-payer healthcare in this country sometime in the next decade. 2) The system will have massive cost overruns that were "completely unpredictable" within 5 years of implementation. 3) Medical innovation will almost completely cease within 25 years. 4) No one will miss it after a generation. They just won't even remember that it was ever an expectation. Just like people now can't believe that inflation was ever a problem in the U.S. because it was defeated 25 years ago, no one will remember that we used to expect medical technology to constantly become ever better after 25 years of it stagnating.
The only question, to my mind, is whether the 3rd world sets up little enclaves of super-hi-tech medicine for the super-wealthy. My guess is they do and our government tries to shut them down like they do tax havens. With about as much success. The net result? Instead of the unequal system we have now, we have a worse system that is more equal for more of the people, and much less equal for the people at the top.
And we'll have lots of pundits telling us that a) this is a much better system than we had in the bad old days and b) it's going to get much better if we could only get the right people in charge of it.
I have a question related to this "incomes program to boost the wages of those whose productivity is not up to providing them a basic, decent standard of living".
If we implement such a system, would we make an effort to stop the million-odd massively unproductive immigrants (mostly illegal) from coming in to take advantage of the free style of living each year?
Or would we just paper them over with some of the barrels of cash we have laying around?
Delong's an idiot. You only have to throw over small government if you perceive the sole solution as 'complete government control of every decision and nuance thereof'. The fact that he sees only big government solutions tells us his concern is for goverment control rather than better healthcare. There are plenty of ways to integrate better healthcare access without mandating government control. One such option:
1. Eliminate the employer ownership of health insurance by distributing the policies to the lives covered.
2. Mandate the current employer costs for the plans be added to comp.
3. Mandate non-discrimination insurance offerings and offerings for all classes.
4. Provide sliding-scale support for those unable to afford the premiums.
We aren't willing to take a 100% libertarian stance, that's obvious and understandable. But we ought to be willing to interfere with free exchange in the least economically harmful way. An economist who doesn't understand this is worthless. Delong's using the credibility of his profession to advocate a political objective.
Re: Tony, you somehow have concluded that "attention" is synonymous with "best technology"
I'm not sure what you mean by "best technology"...but, as an RN working on a cardiac floor here in CA, I have taken care of illegal immigrants, homeless men and the hospital CFO -- when they come in with chest pain. They all got the same care (I care for all my patients the same), same tests (troponins, EKGs, stress test, cardiac cath and the bypass surgery - if needed). Yes, even the 85 year old non-english speaking immigrant who had *ahem* "overstayed her visa" had bypass surgery. I doubt the hospital will ever collect on that and she stayed about 3 weeks.
Jon F., I was just referring to the political realities. Nobody really competes hard for young voters. Everybody competes really hard for the votes of Medicare recipients. If you want to assume the altruism of Meidcare recipients, fine, but I see no reason for such an assumption.
Steph, in no place in my post did I imply that technology was only critical to cardiac care. No, everyone in the U.S. does not gain access to the best technology critical to prolonging life.
"I'm talking about topping your wages up to $20,000 in an urban area, not topping them up to what most middle class people think of as a tolerable life. If you want to live like a grad student for the rest of your life, we can probably afford that, because most people don't want to live like grad students for the rest of their lives."
I work with young people, many of whom are high-school dropouts. For nearly all of them, the prospect of a grad-student life without work would look like utopia. The people most of us spend most of our time with--fellow college grads all--are ambitious enough that they wouldn't go for the $20K thing. But an 18-year-old with a personal discount rate of about 100% deciding whether to work in a restaurant or car wash or just hang out by the pool all day looks at life differently.
The trouble with welfare isn't that we "can't afford it"; it's very cheap. The problem is it is a form of temptation for many people--not you, not me, but lots of others. The high-school drop-out rate in South Bend, IN, is about 50%. Very few of those kids ever imagine making $20,000 a year. Most of them really thing a fast-food job is better than high school because you can buy some nice clothes with your wages.
Here's some predictions for you. 1) We will get single-payer healthcare in this country sometime in the next decade. 2) The system will have massive cost overruns that were "completely unpredictable" within 5 years of implementation. 3) Medical innovation will almost completely cease within 25 years. 4) No one will miss it after a generation. They just won't even remember that it was ever an expectation. Just like people now can't believe that inflation was ever a problem in the U.S. because it was defeated 25 years ago, no one will remember that we used to expect medical technology to constantly become ever better after 25 years of it stagnating.
Well I certainly don't agree with 3) and 4). Just look at the Dow and Nasdaq. There's trillions of dollars invested in biotech, pharma, med devices, heck even consumer products. If you think our politicians are principled enough to throw those investments away you have been living in the wrong country for the past 20 years. Three words: Medicare Part D. (actually that's 2 words and a letter).
Your theory that innovation will simply cease to exist because we overspend on government healthcare is wrong - we are doing that now and it is profitable for our health technology sector. Innovation will continue to improve outcomes and will be justified by reducing cost-of-care, whether it's true or not.
The only way to get our healthcare costs down is to make the whole payment system outcomes-based and not procedure-based. That puts the onus on the hospitals and clinics to effectively manage care with cost-vs-outcome in mind. Doctors will go back to demanding more effective advanced technologies than some of the marginal products that are used today. They will demand more reasearch and more clinical studies to vet the product's efficacy. This way, we won't get payers shelling out thousands of dollars for treatments that may have a 10% efficacy benefit. Maybe there will be efficacy standards set, which actually would be a good role for the governement to play (just like fuel efficiency ratings for cars, we should have treatment efficacy for medicine). This will make biotech more careful about product development and will force use to invest more money into R&D, rather than into lobbying and sales.
TomO,
As I said, you can create a moral hazard merely by reducing people's incentives rather than making them go away entirely. Taking care of oneself involves a nontrivial tradeoff even when you pay part of your own medical bills -- on the one hand, you'd like lower cholesterol, but on the other, pizza is yummy. (I'm surprised to find that a proponent of single-payer is turning up his nose at the suggestion that preventative care matters.) You seem to be saying that people will choose a constant level of "prevention" (including both preventative care/tests and healthiness of lifestyle) no matter the price of "cure", up until the point at which the price of "cure" becomes negative. And yes, I find it extremely easy to believe that a large number of people will choose different diets, different exercise regimes, different amounts of preventative care, etc, if the marginal cost to them of health care is 100% rather than 0%. You don't?
Now, healthcare is a special case, because unlike most of the other "basic goods" we think everyone should have, the costs can vary widely from person to person. But there are ways to deal with this--alter the income transfer for different diseases, and then let people decide how to spend the money. Maybe some of them will spend their healthcare money on a fabulous car and let their diabetes fester.
This comes up against the same problem we have now, though, which is when the care-avoider says "I should have spent the money on X, but I didn't think it would be an issue. Now I wish I'd done differently. Are you going to let me DIE, or are you going to pony up?"
On the balance of 1 and 2, a gazillion pieces have been written by writers who moved somewhere (e.g. Holland) that it just made sense for the entire family to get around largely by foot, bike, and public transit, and discovered that all the adults lost 10-20 lbs. (The kids were just thrilled not to be tied to "only if Mom/Dad can drive you" on the list of things they could potentially do after school.) I think public health could rightly focus on a) making sidewalks and safe streets readily available so people could get some exercise, which pretty much has been shown to do everything (manage mild depression, reduce various disease risks) you could want a pill to do; b) try to get a societal shift that exercise is just expected. I have no idea how to go about the last one, but the revile now heaped on smokers, and especially on smokers saying "I got lung cancer--but I didn't want to!" is some sort of guide.
To cross-reference a Matt post, this is where some research into the various "everybody knows..." things could pay off. What actually makes exercise more, short of moving to locales where that's built into daily life? What makes Colorado so fit and Mississippi so unfit?
Because once you've actually provided people a minimum income that is adequate to take care of their basic needs, there's no moral reason not to turn away those who decline insurance from the emergency rooms.
Unless one is, say, Christian.
"Who am I to say that your life is not better with a sports car and five years to live?"
I don't know who you are to say that. But I don't want to give this hypothetical other person money to buy a sports car, I want to give her health insurance. Who are you to tell me that I should give her my money in cash, rather than giving her health insurance? If I want to give her "A Theory of Justice" for her birthday, who are you to tell me that I should instead give her cash which she will be free to spend buying "The Road to Serfdom"?
I believe that these problems can be solved by adding to one's intellectual vocabulary the idea of wanting something for America, in which case the answer to the question "who am I to say we should do this rather than that?" becomes "An American."
mg- Huzzah!
Getting rid of the ridiculous tie of medical insurance to employment would be an amazing first step for any reform.
How on Earth did we ever end up with such a ridiculous system as having our employers buy our medical insurance?? Clearly proof that the free market comes up with crazy solutions.
Or proof that government intervention in the economy will aways have unforseeable side-effects with unforseeable consequences. Pull up a stool and let grand-daddy tell you the story.
Back during the War (WWII, to you whippersnappers) the gov. took action against the crazy wage inflation that resulted from shipping a sizeable portion of our working age population off to fight the war. Their common-sense solution was to freeze wages. Genius, now labor is affordable for all!
Err, nope, turns out companies still wanted to attract the best they could get and were still willing to sweeten the compensation to get them. Prohibited from offering more money, they offered more benefits. Since medicine was relatively cheap and had been for years, medical insurance was an easy way to provide extra benefits while obeying the wage freeze.
And then, of course, after the war, it was just sensible to continue offering the benefit packages you'd developed during the war, despite the fact that they were no longer needed. In fact, since medicine is all vital and what-not, you could even lobby to have that benefit get absurdly preferential tax-treatment! What fun! Have the government pay for a portion of the cost of compensating our workers! Yay rent-seeking!
Flash forward a few decades of astounding medical breakthroughs and health-care has become enormously expensive. And, what's more, it's something that practically no one ever feels the price-pain for on themeselves, since it's provided by employers.
So you get our crazy, crazy system of third-party health insurance tied to employment.
And we all get to argue about how much better the it's going to be after the government gets done fixing it!
MattC - I agree that there is tons of investment in biotech, pharma and other medical innovations just now but that is all under the current system. I also agree that it won't spontaneously evaporate but I do think that once the government gets serious about "controlling costs" and investors realize that what that translates to in the real world is "appropriating property rights for medical advances" no one will be quite as eager to finance medical R&D, especially on the more pie-in-the-sky stuff like biotech that is likely to debut as prohibitively expensive but so nifty that it seems incredibly unfair that anyone could be denied it.
I think where you and I diverge is in the predicted response to 2) massive cost over-runs. You seem to think that these massive costs will simply be paid. I think they will be met with dramatic responses. Things like "negotiating a 'fair' price with big pharma" aka: no more paying above production costs for drugs. This is also known as no more R&D into new drugs.
Or 'evaluating' the efficacy of new treatments before agreeing that they are 'valid' treatments and agreeing to pay for them, which seems to be something you're suggesting.
What this translates to in the real world is groundbreaking new techniques that are prohibitively expensive and initially provide only a very limited expected life-increase (your 10% benefit) are just not funded. Thus they never get the chance to be developed into better techniques that cost less and are more effective because the entire process is short-circuited in the name of controlling costs.
This is how I see medical innovation dying. Not with the "bang" of the government unilaterally declaring it dead but with the repeated whimphers of a "necessary measure" to control drug costs followed by a "necessary measure" to control skyrocketing life-prolonging measures for critically injured people followed by a "necessary measure" to control skyrocketing costs for the care of terminally ill patients, followed by and followed by until we have a system that is no longer innvotive and which has gotten there so slowly that no one any longer has the belief that it could be innovative.
This is, as I say, pretty much the road that has been travelled by our European betters with the exception that they have been able to piggy-back on our innovation, getting it later but at least getting it. We won't have anybody to piggy-back off of, it'll just be gone.
I think where you and I diverge is in the predicted response to 2) massive cost over-runs. You seem to think that these massive costs will simply be paid. I think they will be met with dramatic responses.
@Bob - I completely understand your argument; there is definitely going to be (in fact, there already is) a movement for product cost-control from a government payer perspective. Yes, under your thesis, industry will peter out on R&D investment until we have a system of cheap generics like Canada that makes a social health system more economically feasible.
However, industry will not rest there. Millions of people in this country either work or are seriously invested in biotechnology and its various subdivisions. Many more are researching or investing in the technologies of tomorrow. One way or another, these massive investments will find a market, either here or abroad. The US risks a very serious chance of exporting even more of its to capital to foreign countries if government price constraints squeeze it out.
In fact, we are already seeing this in biotech since some emerging markets have much more lax regulatory hurdles for market entry than the US. Most or our multi-national biotech conglomerates have manufacturing and R&D investments abroad. More and more start-ups are happening overseas. The US still is the place to be to make money, but as we all know that is slowly changing.
I believe that these problems can be solved by adding to one's intellectual vocabulary the idea of wanting something for America, in which case the answer to the question "who am I to say we should do this rather than that?" becomes "An American."
I can't parse this. Are you saying that being opposed to single payer health care is unpatriotic?
I must say I would prefer EITHER Mr. Obama's or Mr. McCain's health care policy over the one you suggest!
Ryan:
I'm not saying there is no moral hazard increase in a switch from our current system to a single payer one. I am just saying I think such an increase would be far less than the moral hazard you would have if we gave people with health conditions cash which they could either use to treat themselves or to buy sports cars (or some other luxury).
There probably is a small number of people for whom not having high medical bills is a significant factor in their healthy lifestyle choices. My guess is that its not that big a factor. It requires the average person to be far more disciplined and forward thinking that they usually are. Also, I think that the main objection people have to being sick is the actual physical condition, not the bills, so their incentives will still be rightly aligned.
If being sick gets you a sports car though then you might decide its a good idea.
MattC - And we reach agreement! Yes, to the extent possible, these industries will simply leave the U.S. for more hospitable climes and continue pursuing innovation there.
Possibly these hospitable climes will be in the rising Asian nations, where much biotech research is already being done due to the more lax regulations that you refered to.
To some extent, we'll hopefully be able to free-ride on their efforts the way Europe is currently free-riding on ours. I just fear that the loss of innovation in the U.S. will not be fully replaced and not as easy to free-ride on as ours has been for others. Mostly because, for all our faults, the U.S. is still the largest economy in the world. Having that economy forgo direct investment in medical innovation will have a severly negative impact on the level of innovation, regardless of how much the innovators might try to mitigate that impact.
That's why I think a more likely outcome is a general slow-down in medical innovation in the U.S. coupled with the rise of medical tourism in those lax regulatory regimes for the world's ultra-wealthy. And the true problem will be that this will then become the status-quo that feels "normal" to people so they won't even miss the innovation that they no longer have access to.
Basically, a far less equitable result than the current system that we are trying to fix.
--Now, healthcare is a special case, because...,[but]then let people decide how to spend the money.
They already DO decide this. Some of them choose to not buy health insurance, even subsidized cheap plans from the states. Some of them choose plasma TVs over individual health insurance--and nothing happens to them; others then go to the ER and don't pay the bill. Some choose to take the risk of no insurance and still go snowboarding. Some choose to use their money to buy cigarettes! Some use their money and don't diet or exercise to control their risk for heart disease. etc. etc. etc.
Large swaths of the country think this is UNACCEPTABLE. Some think it's unacceptable that these people are uninsured, even though THEY CHOOSE THAT with their money. Others think it's unacceptable to allow them to choose bad food or smoking--i.e. unacceptable for them to decide hwo to spend their money.
Your solution can't work until the nation as a whole decides that the health outcomes we choose with our wallets are acceptable.
JonF 6:46 AM:
I was walking down Avenue des Champs-Élysées Avenue in 1993 whereupon I came upon a scene of the French Fire Department carrying back to their fire truck a small box with a syringe with a rather long needle. They had apparently injected the heart of a rotund man now covered with a paint drop cloth like sheet. He had been accompanied by an older woman now with her mouth open and a look of shock and abandonment. A defibrillator would have been used in Dallas and a hospital ambulance would have been waiting though who knows about the outcome.
The problem with throwing (1) over the side for universal health care is that it won't stop with health care. As various cities around the US (have tried to) demonstrate, once you make the government responsible for the health care bill, it starts injecting itself into places you didn't want it to go -- your lifestyle, your eating habits, etc.
Once the government picks up your medical bill, it will inevitably decide it can start telling you what to eat, what to drink, how much you should exercise, whether you can smoke and so on. And there will be a huge crowd of collectivist do-gooders who think that's only appropriate. Hey, the government foots the bill, it's only reasonable and in the best interests of society that it would try to minimize that bill, right? Right?
Well, you can have my Sierra Nevada beer when you pry it out of my cold dead hands. Even if that means I have to foot the bill for all the work on that scarred, swollen mass I like to call my liver. Luckily, thanks to Heller, my hands may not be the only cold dead ones involved if some collectivist gets too enthusiastic.
The root of the problem, frankly, is that a significant percentage of the population in need of financial assistance are for all intents and purposes children who happen to be over the age of 18.
Since we insist as a society on treating anyone over the age of 18 as an adult, we are left with the problem that no matter how much money we give them, they are going to mostly squander it, and then turn with tears in their eyes towards the camera crying about how they can't afford this or that necessity (without noting that it's because they spent the money on this or that luxury).
That's why we fund food stamps, WIC, section 8, medicaid etc... because we believe, quite reasonably that many folks would spend the rent on lotto tickets, the grocery money on booze, and spend their health insurance money on digital cable.
I kid you not. I've known people who bounced their deposit check for an apartment because they put the paint they bought to change the walls to a slightly different color of off white on their debit card.
The real choice is whether you are willing to
1) Treat children like children regardless of their age
or
2) Allow adult children to starve, go homeless, and go without medical treatment.
You can't have both. If you don't want 2, you have to have 1. Section 8, food stamps, medicaid, etc are all mild forms of treating adult children like children.
Because once you've actually provided people a minimum income that is adequate to take care of their basic needs, there's no moral reason not to turn away those who decline insurance from the emergency rooms.
Swell, great, but discerning the insured from the uninsured is a bureaucratic problem, which means there's your even bigger government intrusion in hospitals - and, of course, the problem of making a mistake.
I hope you're the one volunteering to be turned away from life-saving care because your insurance status was inaccurately reported. (oh, wait, that would never happen to a white person.)
I'm much more in favor of emergency rooms not being put in the position of deciding life from death simply to save a dollar. People are going to die, yes; it's morally reprehensible to sentence them to death because it's more cost-effective for the rest of us. Regardless of their personal choices.
Re: And yes, I find it extremely easy to believe that a large number of people will choose different diets, different exercise regimes, different amounts of preventative care, etc, if the marginal cost to them of health care is 100% rather than 0%. You don't?
No, I don't. Bad health habits aren't like neglecting proper auto or computer care. The consequences are not just financial, in fact the financial consequences are trivial in comparison to the, well, health consequences-- sickness, pain, disability and death. Those easily overwhelm mere money matters. There will always be a huge incentive toward good health habits quite independent of who is paying the bill. If people are not reacting the chances of misery and death then I would suggest that they aren't going to react to the possibility of nasty bills either. (The real problem here is that too many humans have a time time horizon; they react to things in the immediate future but are incapable of seeing the far future and reacting accordingly)
Re: I was walking down Avenue des Champs-Élysées Avenue in 1993
Um, people die of heart attacks on American streets too. And 1993 is a while ago.
Y'all also seem to think I'm talking about a guaranteed income. I'm not. I'm talking about wage subsidies. You don't get $20,000 a year without working 40 hours a week a something.
"Y'all also seem to think I'm talking about a guaranteed income. I'm not. I'm talking about wage subsidies. You don't get $20,000 a year without working 40 hours a week a something."
Two questions spring to mind:
1) Who decides what is 'appropriate' work for those 40 hours? In other words, would the engineer-commenters on here who professed their desire to quite engineering to write unsaleable science-fiction qualify for the $20,000? If not why not and who makes that determination?
2) What about the massive immigration question? Wouldn't this necessitate limiting immigration only to those who are capable of producing at least $20,000 a year for the economy? Otherwise every immigrant who comes in that is incapable of producing that has a clearly identifiable cost. I know you're of the opinion that America is so incredibly wealthy that there is nearly nothing our money can't cover, but it seems foolish to throw open the doors to a world with billions who can't produce $20,000 a year whle promising them that amount if they do whatever they can do.
I understand your "radical anti-paternalist" sentiment, but if I could pose a hypothetical:
A 48 year-old man enters the emergency room on a Tuesday night complaining of chest pains and shortness of breath. He informs the attending physician that he's been previously diagnosed with high blood pressure and high cholesterol, and prescribed medications for his condition.
Instead of buying health insurance to get access to the medication, he blew all his government support on a sports-car to improve his remaining years as best he saw fit. Unfortunately, he's changed his mind now, and is asking the physician to call a cardiologist and begin emergency angioplasty treatments.
What (if anything) should the physician do for this uninsured patient? Who should pay for it?
I'm with Steph regarding quality of care. In the past (and I imagine currently) in Houston the undocumented worker in the Ben Taub ER sees the same docs as captain of industry at Memorial Hermann next door. They are provided by a large consortium of physicians. Physicians tend not to be wage slaves of the state, they tend to form nicely profitable corporations.
Also, since most public sector hospitals are also the primary ER for the area it would seem to be a bit short sighted (not to mention unethical) to blow off treatment for those who cannot pay. It tends to make the papers. Anyone who has glanced at a large hospital census will see a significant number of patients without the ability to pay who are there for months if not years. They get cat scans, mri's, surgery without regard to financial status.
The public health care systems I have dealt with are among the largest in the country and provide quality care without regard to the ability to pay.
Will Allen,
I don't know about "best technology", you'll have to define that term. But there certainly is a standard of care that is meticulously followed and not abrogated according to ability to pay.
Megan says, ""Y'all also seem to think I'm talking about a guaranteed income. I'm not. I'm talking about wage subsidies. You don't get $20,000 a year without working 40 hours a week a something."
In my experience dealing with people and patients from all strata of society, there is a certain percentage of individuals that you do NOT want in the workforce in any way. You don't want them around your kids, your food, your car, anywhere. It's a small percentage, but it's real.
Giving people a living wage is silly, especially for a libertarian. This same small percentage of people not able to be accomodated in the workforce also should not be "given" a salary-- mainly because they have no idea what money is, what money represents and what money's beneficial uses are. The reference upthread to "children" no matter their age is quite appropriate.
freddiemac: "Wow, just wow. What totally incoherent...do you get paid to write this stuff?"
Well... at least she calls herself a "libertarian". So, there's that.
McArdle: "I'm talking about topping your wages up to $20,000 in an urban area,..."
You precious little twit: who the fuck do you think you are? Who do you wish you could be? Will it *ever* occur to you to mind your own goddamned business?