Uh, no.
I said that these arguments about administrative costs and rationalizing production and eliminating wasteful competition turn out not to be nearly as good arguments as they initially sound. Maybe there are other good arguments about national health care. But this particular set of belief systems was well developed about other nationalized markets by the vast tradition of socialist literature, with which today's young progressives are shockingly unfamiliar.
Because so many young leftists do not seem to know their own history, they are doomed to repeat it. Literally. They make arguments that were common in socialist circles a century and a half ago--for the popular version, try Edward Bellamy's Looking Backward.
Those arguments utterly failed to rescue other nationalized markets.
On the other hand, as Ezra points out, people in Germany and France are not dying in the streets. So centralization does work better on health care than it does in steel.
But I'd argue that the difference is that Germany and France, unlike the Soviet Union, have companies which produce in American markets to provide them products.
One key thing to remember is that there's a big difference between a situation where the government is a sizeable buyer/producer, and one where the government is essentially the only buyer/producer. In the latter case, the market still works, even if the government presence distorts it--prices are set by supply and demand, research is done, and so forth. Indeed, it is not well appreciated on the left how dependent Medicare is on private insurers to tell them what the competitive price is for the treatments and products it pays for--if the private sector went away, Medicare would have to develop some sort of pricing system, and so would all the health care systems abroad. Once the government becomes the dominant player, however, everything changes.
Look at defense spending. Are F-22 raptors worth $138 million? It's a pretty meaningless question. Congress is willing to pay $138 million. But this bears only the haziest relationship to what the Americans who pay the bill want, or are willing to pay, for such a plane. And the procurement system pays at least as much attention to what congressional district things are built in as what makes the most effective military. That's why virtually everyone thinks defense procurement is an overpriced disaster, which gets innovation only at drastic cost. Unfortunately, there's no other way to go about it.
Right now, the US has a market--no matter how screwed up--for medical goods. It is not a good market. But no one in the market, except Medicare, has enough pricing power to totally undermine the market mechanism, so it grinds out an equilibrium that bears some resemblance to consumer demand. In turn, Europe can buy those market-produced products. But if you kill the last market, everything suddenly looks very different. What's the right price for innovation? What should we research? Those questions stop being decided on the basis of the number of consumers served, and start being decided on the basis of who has the best lobby.
There's one more difference, which is that health care is not transportable. When British coal was overpriced and delivered erratically, this was obvious, because other countries had a steady supply of the commodity at a lower price. Healthcare is hard to measure and impossible to transship, and almost no one consumes health care internationally (though I'll note that as the internet has facilitated comparisons, Europeans have become disenchanted with their rationing boards).
A lot of blogs recently have been talking up this quote from Jon Cohn:
Last year, I had the opportunity to spend time researching two of these countries: France and the Netherlands. Neither country gets the attention that Canada and England do. That might be because English isn't their language. Or it might be because they don't fit the negative stereotypes of life in countries where government is more directly involved in medical care.
But in the course of a few dozen lengthy interviews, not once did I encounter an interview subject who wanted to trade places with an American.Over the course of a month, I spoke to just about everybody I could find who might know something about these healthcare systems: Elected officials, industry leaders, scholars - plus, of course, doctors and patients. And sure enough, I heard some complaints. Dutch doctors, for example, thought they had too much paperwork. French public health experts thought patients with chronic disease weren't getting the kind of sustained, coordinated medical care that they needed.
But as anyone who has lived in Europe can attest, the beliefs about what happens in America are ludicrous. And I'm not talking about "the man on the street"; I'm talking about journalists, politicians, doctors. It's not uncommon for Americans getting treatment in Europe to be asked "You'd never be able to afford this in America, right?" by their doctors and nurses, when "this" is stitches or antibiotics. I'd be terrified of switching places with an American too, if American health care were actually one eighth as bad as most Europeans seem to believe. Yet despite that, as far as I know the net migration is actually the other way.
But the main point is not that one system is better than the other. The main point is that these are very bad arguments which have been trying, and failing, to save nationalization for well over a hundred years. If indeed Europe's systems are superior, it is not because they have managed to eliminate wasteful competition and centrally rationalize decision making. It is in spite of those things.
Ezra complains that I called him a communist
The Möbius strip of arguments: using a strawman to complain about other people using a strawman.
Nice work Megan, you get a gold sticker.
Though my experience was mostly with students, I can attest to Megan's testimony re: the views of Europeans with regard to our health system. I feel like I spent half of my two years in Europe explaining that we don't have tens of thousands of people dying in the streets every day. Many people also seem to think that tens of thousands of African-Americans are slaughtered by the Klan every year, so I'd generally take European public opinion of the U.S. with a lot of salt.
Oh really? Funny, I've lived in Europe (Portugal) for 12 years. Never heard a single comment about the Klan. OTOH, I heard a lot of annoying stuff about how come we have so much fat people and don't love soccer. Annoying, but accurate.
I've never been to Portugal but I have traveled around Europe. There are no consistency to the myths I heard about the US, but I did hear a bunch of them. Some of them about black oppression in the South, where I live.
A family member recently had a friend from the UK visit. His first trip here. He was apparently rather pleasantly surprised to find that one could walk the streets unarmed in relative safety.
But as anyone who has lived in Europe can attest, the beliefs about what happens in America are ludicrous.
But entertaining!
Seriously, I don't begrudge the Europeans their hilarious misconceptions, or even their robust overconfidence which leads them to argue with actual Americans what life is like here.
After all, there are an awful lot of Americans with various misconceptions about their own country, most especially those parts they've never visited (the urban/rural divide, for instance).
It's a big country.
"Wasteful competition".
Hm.
"almost no one consumes health care internationally"
This isn't entirely true. There has been a boom in medical tourism in recent years, particularly by Americans a few years too young to qualify for Medicare.
Can it be the case, not that centralization works better, but that markets work worse in health care than they do on steel? Nobody is proposing government intervention in the paper clip manufacturers. Everybody is, AFAIK, very happy with paper clip markets.
I just bought paper clips today. 100 blue paper clips for $4. You can have them in any in any color you want too, and there are various sizes to choose from, all for roughly the same price. Now I have pretty paper clips. What a wonderful market.
I don't think Defense is a very good analogy. It's not just that they are government run. Unlike in health care (or education, or public transportation), the public never gets to evaluate Defense projects properly. You don't know if something is going to be needed in the next conflict or not. And once in a while you have a war and he usefulness of every new stuff gets tested at the same time.
Defense has every reason to be the area where government sucks the most. OTOH, if government-funded health care is bad, the public will complain about it. If it's too expensive, people will complain about taxes. It's not a good feedback mechanism, but it's something.
But you have exactly the same phenomenon here! Socialized medicine is practically a dirty expression. Horror stories about European hospitals are quickly generalized. The public wants universal health care in polls since the 50s, but somehow public officials and large segments of the media always manage to scare people off. First with the ghost of Communism and Soviet Union. More recently by vastly exaggerating the problem of waiting lists, and with stuff like "Come on! Do you really wanna turn America into France?"
Right. That's why Europeans come to the U.S. For the health care.
is that last bit meant to be ironic, because it is true that more europeans come to the u.s. specifically for health treatments than the other way around.
Don't try and get Nimed to actually acknowledge something like that... it doesn't fit their narrative...
jamie_t,
Megan was talking about net migration. As in more Europeans moving here than the other way around. Do you think it's because our amazing health care? Of course it isn't. It's a silly argument.
By the way, Europe's medical tourism main destiny is India, not to the U.S. Does India has the best health system in the worldfor its native population? No. But it has very good private clinics and is cheap.
The U.S. isn't cheap, but we're very good at certain procedures. But this also doesn't mean we have a good health system. It means we have some very good hospitals and doctors if you are willing to pay the big bucks. That's nice. It's not the same as good health care.
Right. I'm not the one being deliberately thick.
The net migration is not a good argument. Megan is just being tribal here, effectively saying "oh yeah, if we suck so much, how come those Europeans want to live here more than we want to go there?". Well, lots of reasons. Health care isn't one of them.
The point is that the health care system is clearly not enough to actually deter them from moving.
you subtly make a point that you yourself seem to have missed. namely that europe's main medical tourism destination is india - because it is cheap. what, in the context of "universal", "government-provided" health-care, are the implications of this fact, which as far as i know is accurate?
also, just as europeans likely do not move to the US for the health care, americans do not move to europe for the health care either. i certainly didn't - my insurance in the US was better than the crappy sickness fund i'm in now.
Western European immigrants generally have a very different profile from Mexicans or even Canadians. They usually have a nice middle or upper-middle class job waiting for them when they set foot in the U.S., which almost always comes with health coverage. That's why it doesn't deter them.
I'm not saying Europe is health care paradise. They have some known problems - there is some elective surgery in most European countries which is not subsidized by the government. And there are waiting lists in some procedures.
But our main destiny in medical tourism is India too. India like other underdeveloped countries, has extremely low salaries and other costs. You can't really expect to compete with Indian clinics on this.
I think you meant former. Other than that nitpick, great post.
Oh, and btw, I'll call Ezra a communist. Someone had to...
"Are F-22 raptors worth $138 million? It's a pretty meaningless question. Congress is willing to pay $138 million. But this bears only the haziest relationship to what the Americans who pay the bill want, or are willing to pay, for such a plane. And the procurement system pays at least as much attention to what congressional district things are built in as what makes the most effective military."
Err, no, as you might put it.
The decisions about what contractors and what subcontractors get what programs are made in one of two ways: competitively and non-competitively. Many of the latter are forced choices: there was only one tank manufacturer capable of building the M-1 Abrams, so--perforce--they got the job. The F-22 Raptor, OTOH, is the product of a competitive process in which there were basically two competitors, which in turn were consortia of most of the major military airframe manufacturers (Grumman seems not to have been a player: given that they had a pretty full plate at the time with the Navy's A-12, not entirely surprising).
So then...how are prices established in the major defense systems contracting business? Again, either competitively or non-competitively. If it's competitive, there's rarely more than two bidders, due to the enormous up-front investment required to play (this is, of course, very like the commercial aviation business). In those cases, each contractor tries to figure out the lowest price he can bid and still make some profit. Then--if he wins--he crosses his fingers and hopes his costs don't go haywire on him.
In the non-competitive ("sole source") world, it's more complicated. Basically, the contractor submits a detailed cost proposal, in which he estimates what it will take for each part of the system he's building, including labor and material costs, estimates of his overhead rates, and--yes!--an allowance for profit. These costs are based--as much as possible--on real-world data: quotes from vendors for the material, labor estimates based on actual costs for previous contracts for the same or similar items, judicious guesstimates as to things like the rate of inflation, and so forth. The government then negotiates each cost element, and eventually (one hopes) reaches a bottom line.
The fundamental difference, therefore, between sole-source and competitive production is that the former is much more cost-based than the latter: but even in the sole-source world, no one is making huge profits (if they were, wouldn't defense stocks perform better?). What drives defense procurement costs--and, I suspect, medical equipment costs as well--is a combination of a monopsonistic market with a high regulatory burden--particularly in the areas of safety, reliability, and general quality--which makes efficient cost reductions difficult.
We're talking about two different things. I'm familiar with the government contracting procedure; my father was for many years the head of a trade association for government contractors, and I know the difference between sole-sourcing and bidding. But the appropriations process often results in the continuation of various military items because they are produced in a key member's district.
Understood and agreed, Megan: when I was a contracting officer, I had to contract for--and justify contracting for--on a sole-source basis, $10 million worth of a device the Navy had already stated in writing it didn't need or want: the Laser-Guided Training Round or LGTR. Turns out it was being built by one of Fightin' Jack Murtha's constituents. Imagine that!
But if that's what you were talking about, then serving up the F-22 as an example was misleading. The Air Force would be perfectly happy to buy more F-22s if they could do so without affecting the rest of their budget, and the process by which the F-22 was originally contracted for is in fact a model of both fairness and transparency.
As for the question of whether the F-22 is "worth" $138m a copy? As an economist, you know the answer: the price of a thing is that which people will pay for it. Given that the F-14 and F-15 cost (on an apples-to-apples basis) $50-70m when I was in the business twenty years ago. I am actually quite surprised and pleased that--inflation, advanced technology and lower production rates notwithstanding--it's possible to buy an equivalent aircraft today for only 2-3x as much. I mean, how much do *cars* cost today compared to 20 years ago?!?
For crying out loud....
The US Congress could not run a cafeteria, literally!
The great brain short-circuit those on the left repeatedly suffer is that they look at something, say medical care, think "market failure" (let's forget for a moment how much of the supposed market failure of the medical system is really imposed by the goverment) and then jump to "goverment will make all better!", which means "politicians will make all better".
They never say, or think of, "government failure".
Here's a very, very simple intellectual challenge for Ezra or whomever:
Look at that real-life example of Congress's inability to run its own cafeteria. List for us all the specific examples of "government failure" that contributed to and caused this inability -- you know, like in an exam question.
Then tell us how and why these very examples of "government failure" won't apply to the government's management of national health care to create the exact same screw-ups on a trillion-dollar rather than cafeteria scale. Be specific.
(Grades will be marked down for digressions that avoid the question like "But the Dutch do great!". The Ducth have a population that is tiny compared to the US. )
For extra points one might refer to ways Congress has already screwed up the US system -- such as by tying medical benefits to employment; reversing any coherent insurance model for Medicare by providing first-dollar coverage for routine, predictible services (thus destroying the market for them) while leaving calamatous, lose-your-home-and-life-savings nursing home and disability care uncovered, etc.; enabling the staggering fraud rates of Medicaid -- and explain exactly why Congress will never, ever commit such screw-ups ever again!
Sigh, indeed.
On a more philosophical note, we can see that the battle between those who see market failure but are blind to government failure, versus those who have eyes open to both kinds of failure, is endless and joined even at the level of battling Nobelists ... such as Coase versus Samuelson. Coase:
"My approach is to compare the alternatives.
"People like Samuelson like to set up a perfect world and say that the market does not bring us to this point and imply that the government should do something.
"They stop their analysis at that point."
http://reason.com/9701/int.coase.shtml
So many do.
For crying out loud....
Have a tissue.
Equating the government's inability to run a cafeteria to it's inability to run a healthcare program would mean, equally, that if the government ran a cafeteria correctly it would automatically follow that the government could run a healthcare program correctly.
I don't think that's quite what you're going for, is it?
I think your euphemistically labeled "intellectual excercise" would work better if it wasn't based on an analogy that is, you know, completely retarded.
That's just nonsense. If a little girl can take care of a goldfish, that doesn't mean that she would automatically be a good babysitter. However, if she can't take care of a goldfish then that's a pretty good reason to leave your children in someone else's care. The analogy was fine; the problem is in your comprehension.
Umm no. Jim Glass's point is that a the government could run a fairly simple operation, so why would expect it to run a vastly more complex one with a lot more money involved? It's similar to asking why a guy who couldn't run hamburger stand should be the CEO of Fortune 500 company. Now, there is a lot subtlety you could put into the counterargument to explain why the analogy is false, but you choose not to do so. Instead you make a bad logical error of assuming that because Jim Glass said he thinks someone couldn't do X because they couldn't Y, then he must mean that if they could do Y they must be able to do X. You then use use your flawed reasoning to not only accuse him of flawed reasoning, but call his argument retarded, which counted as a witty take down insult in, oh 8th grade. Of course, it also happens to be a word that could be kind of insulting to people with actual developmental disabilities, most of whom that I've known are hard working and can be pretty capable, in addition to not being burdened with the arrogance and willful inability to comprehend what you have read that you have shown here.
My apologies for the "retarded" statement. You are right that it was tasteless and uncalled for. In my defense, I am the father of an actual 8th grader, and his and his friend's lingo has a distrubing tendency to rub off on me.
Apologies also for the snark in my previous post, but it's late, I quit smoking four days ago, and I'm irritable. However, I stand by my assertation that Jim's analogy is bogus, because he seems to be asserting that the reasons for the Cafeteria failure and the reasons for any future potential failure in a government-run healthcare system are exactly identical and interchangeable:
"Look at that real-life example of Congress's inability to run its own cafeteria. List for us all the specific examples of "government failure" that contributed to and caused this inability -- you know, like in an exam question. Then tell us how and why these very examples of "government failure" won't apply to the government's management of national health care to create the exact same screw-ups on a trillion-dollar rather than cafeteria scale. Be specific."
Of course, now that I think about it, the reasons the Cafeteria failed (poor product delivered at a poor price without adjustments for better competetion) are pretty much exactly the reasons that a government-dominated healthcare system would probably suck, so...uh, yeah, as it turns out I don't know what the fuck I'm talking about.
I'm just going to plead Chantix-fueled psychosis and ask everyone to ignore my rantings.
It is true that these arguments are regularly regurgitated. We heard all of them in the 1970s. What I have heard no one say is that in the last thirty years the Canadian, British, German, and French health care systems have had an opportunity to get better at delivering services. The old arguments citing long waits and impoverished facilities and equipment for health care in these countries are stale. We can be informed by their successes while grappling with the fact that our system is dissatisfactory on account of cost for a growing minority of individuals.
The Canadian system has not gotten better at delivering services. It has gotten dramatically worse. Most simple treatments are done in emergency wards.
Presumably health care is not going to be judged on a quarterly report. The Canadian system is subject to periodic (usually 3 years into any of the number of 5 year plans) systemic collapses that are illustrated by doctors quitting and moving to the US, or changing their practices to non regulated services.
The only thing that has pulled the system out of these periodic fires is a very large influx of money that is the result of an american economic boom generating some tax income here.
As for controlling growth, it isn't. I think the growth is somewhere in the 8% per year rate.
The US system is characterized by individuals being painfully aware of it's cost. Socialized systems are characterized by individuals having no idea of the cost. Which system will provide the innovations at controlling costs? I mean without just letting people die.
A small anecdote. Same symptoms, same disease, same treatment. Same doctor. One, a 54 year old with symptoms in his chest. A second, 65 years old, same symptoms. Both 'failed' a stress test. the 54 year old had diagnostic and treatment within a week. The 65 year old had same diagnostic and treatment in 6 months.
I ask honestly. How does that save money?
Derek
Sadly, there's the obvious answer - if the 65 year old had died in those six months, the treatment cost would have been saved. Out of a large population, surely some people will be patriotic enough to go away permanently, if you delay treatment.
So you are happy to dismiss any potential advantages that France or Germany might have as due to the fact that they are morons who have no idea what American health care is...
Perhaps a good comparison would be someone who lived extensively in both countries and compared the two systems. Sure experience would vary from person to person, but if the person doing the comparing were a very smart person, then their experience might be particularly relevant.
A friend of mine is just such a person. She has a Ph.D., so she is not a complete fool although having a Ph.D. myself I know the truth of the statement "Any ahole can get a Ph.D.". She has lived in the US the past 6 years and lived in France for along time before that but visits France reasonably often.
So here's what I have trouble reconciling -- my french friend's judgment is that the French system is way better than the the US system for all sorts of reasons. She even went back to France partially because she is planning to have a baby and sees their system as much easier to handle a pregnancy and beyond. Even with some natonalistic bias for my friend, I am inclined to believe (based on the fact that my friend has a mind like a steel trap) that the French system is probably at least as good as ours by most measures, yet one rarely hears that...
It seems like France is very different from England, but England is all you ever here about -- why is that?
french doctors are great, until they're all on vacation in august and there's a heat wave that kills thousands of people. but hey, it's france!
england is what you hear about because it is sociolo-economically speaking far closer to the united states than any of the continentals, and because the nhs has been a disaster.
The heat wave kills them because they not only don't have AC there is a cultural aversion to fans and air condition that they think makes you sick and causes muscle cramps.
I have lived extensively in Finland and in the US. Bear with me for having only a MSc instead of a PhD. :)
My judgment is that the US system is in general better, even though the Finnish system for the most part works quite well. But first of all we need to know whether we are comparing the US system to the Finnish state system, or the Finnish private insurance. In Finland private accident insurance is not very expensive, but will make the difference between waiting for a year or for a couple of weeks to fix torn ligaments. Private health insurance that people buy by themselves is inexpensive but covers very few things, private health insurance obtained through work is not nearly as universal as in the US, but will let you see a specialist faster than you would otherwise.
Some things, like pregnancy care, tend to be better in Finland. Emergency care is excellent in both countries, from what I've seen of it. The two biggest problems I see in Finland's state system (and they are very big problems, IMO) is that the system tends to ration the care away from the elderly and their diseases, and that people who don't have an additional private insurance get to wait a really long time for the kinds of treatment that are not urgent but affect the quality of life a lot.
Megan points out:
But, but, but...
But Progressivism is all about the future!!!
What use would learning all about the boring old, completely non-applicable, history of other young, progressive geniuses who had figured out the world be??
Obviously, those poor deluded barbarians had nothing in common with today's progressives, all of whom are smarter, more moral, and all around better dancers than any human who has ever lived or even dreamed of living. Thus the fact that progressives in prior periods were proven wrong again and again when advancing exactly the same arguments is completely irrelevant. Because they are not us modern-day progressives. They were poor, benighted barbarians who were at best mistaken about thinking they might be progressive and at worst were evil republicans trying to hijack out noble utopian movement!
Viva la revolution! May history burn along with the rest of our enemies!
/this
One more thing that I should have mentioned that is a striking difference between French and American Doctors - French doctors are driven much more by the prestige of the profession than the money and accept much lower salaries -- I don't know why this is and it may be a fatal flaw in comparing the two systems.
I think it is the cost of education. My friend, a doctor, just moved to Europe and told me that they don't spend anywhere near the same for medical training. She, of course, has a huge debt load and is trying to pay it down on less income.
French doctors are driven much more by the prestige of the profession than the money and accept much lower salaries
More likely that there are fewer high paying jobs competing for highly skilled talent in the France vs. US.
I thought German and France don't have nationalized health care systems. At least from what I've heard, both countries still have large amounts of private sector health care. BTW, this is often coming from people who want to change US health care system. Often its part of the response you get when you bring up the subject of bad nationalized health care. Please correct me if I'm wrong.
i live in germany, and pay more for my health insurance than i did either as part of an employer scheme, OR privately through bc/bs.
and a lot of people are either fully insured privately, or have supplemental private insurance - these two classes of people receive markedly better health care than the average person, who either pays a base rate through his job, or who has it provided by the government (if unemployed, retired, etc.)
"If indeed Europe's systems are superior, it is not because they have managed to eliminate wasteful competition and centrally rationalize decision making. It is in spite of those things."
The problem is that Europe's systems aren't a little more effecient than America's. They're vastly more effecient. I mean, Europeans have better health outcomes than Americans despite paying half of what we do! You haven't managed to explain that in any of your posts.
Sure, I don't think single payer or whatever is the magic answer. Clearly lifestyle differences and US innovation account for SOME of the difference. But twice as much money for no gain? That's absurd.
end of life care, ability to deliver extremely specialized treatments, a fixation on keeping people alive regardless of cost, demographic congenital predispositions, much higher levels of violent crime due also in large part to demographic/socioeconomic legacy issues, and the specter of widespread specialization on the part of medical professionals because of the overwhelming cost of insuring your practice thanks to a ravenous trial-lawyer production system all contribute to something of a "perfect storm."
don't forget the statistical problems. We just don't measure these things in the same way. A medical expense in the US may be an education expense or a welfare expense ect. We have vastly different systems and determining the cost of each is hard to do. Also, I thought lifestyle choices were the greatest determinant of length of life. We do have a weight problem in this country.
And further you need to remember that the US government ALREADY spends as much money per capita as Canada on health care, and more than the UK. So the US government already spends the full amount needed for universal health care in other countries, yet only covers about 27% of the population.
Until we grapple with that, we aren't getting anywhere.
You are fighting the good fight here.
It would be great, though, IMHO, if you could devote some column inches to additional explanation of the correct areas of focus for health-care reform, rather than just highlighting the negatives of single-payer.
The Cato Institute's conclusions around how to reduce cost of delivery, for example
Nimed suggests: markets work worse in health care than they do on steel
Define your metric. The typical metric used to make European health care look good is lifespan per dollar spent by the entire society. But that metric will make centralization look attractive for almost any good. Think how many more people we could house per dollar if the government just issued everyone a standardized 500 square foot appartment!
But suppose I don't care about people too poor to pay their own insurance premiums. Suppose I am rich and my metric is how much fabulous, cutting-edge, low-marginal-value treatment I can get for me per my dollar spent. In that case the U.S. looks very good. The MRI was invented in the U.K., but for decades afterward loads of Americans were getting MRIs while they were barely known in Britain. Nimed seems to believe that it's unheard of for Europeans to come to the U.S. for treatment. While that's undoubtedly true for simple, low-cost procedures, there are scads of cases where rich, upper-middle-class, and even just desperate middle-class Europeans and Canadians have come to the U.S. to obtain cutting-edge treatments or to queue-jump.
What a strange argument. Are you saying that there's a demand for personal taste and style in health care? Because my impression is that people won't mind standardized medical treatments if it gets them to live longer.
Apart from problem solving scenario, you really don't want your surgeon to be creative. Effective and dull works fine.
Japan, Germany and Netherlands have a lot more MRI machines per capita than the U.S. But I bet you have a reason that's not important now.
You seem to believe it's unheard of for Americans to go to Hong Kong, India, Malaysia, The Philippines, Argentina, Thailand, etc. for treatment. By your line of reasoning, we should conclude that these countries have the best health care systems in the world.
You further seem to be unaware that Europeans go far more to these countries than the U.S. If you just hear some of these commenters, you'd think Europeans are just flocking to American hospitals. They aren't. They are flocking to developing countries.
So are Americans. Medical tourism has been on the rise in the U.S. for some time.
Certainly there is demand for personal taste and style in medical care! In fact, I'd say it was pioneered by left-ish adherents of eastern and alternative medicine.
But taste and style is not the main point here: it's who gets the benefits. If I have $10K to spend on housing, I'd prefer to spend it on more living space for myself, even though it could buy a lot more housing for some poor guy. Similiarly, given $10K of my dollars to spend on extending life, I'd prefer it extend my life by a month than some other guy's life by a year. You can up the total amoung of extended life bought by the society by taking my $10K and spending it on a poor guy, but that's not Praeto efficient and we don't do it with housing or other goods.
I'd be interested in a citatation for your claim on MRIs in other countries, but their use now is not the point, because they are no longer cutting-edge medical technology. When they were, the place to be when you wanted one was the U.S.
Your point about medical tourism just shoots your case in its own foot. Europeans are "flocking" to developing countries for medical care? You mean they aren't entirely satisfied with their own country's wonderful medical systems? Shocking!
But again, those going to developing countries aren't going for cutting-edge treatments. They are going for very standardized treatments which have been denied or delayed due to rationing. If a treatment is established and straightforward, why not go where you pay the lowest price? But if you want a complex, innovative, technology- and research-heavy cutting-edge procedure, and you have the money to pay for it, you are more likely than not going to the U.S.
Where to begin?
Really? Would you bother to cite some examples, please? Mind you that if people really care about style and personal taste, they have to cite these features specifically, and not belief in better outcomes, as the reason they choose alternative medicine.
This is absurd, of course. It's not style that makes people prefer eastern medicine (or homeopathy, or praying, or whatever) to mainstream medicine. It's the expectation, however misguided, of better outcomes.
Taxes in the situation you described is obviously never Pareto efficient. It's trivial to say you would rather spend money on something for you than have it spent on anything that doesn't have any chance to provide you some benefit.
But Pareto efficiency in taxation is never defended on the basis of your argument. If you are interested, you can check this out - http://www.ingentaconnect.com/content/klu/puch/2000/00000102/00000001/00181112?crawler=true
Funny you should mention satisfaction, because they are more satisfied with their systems than we are with ours. But you kind of missed the point. We also do a lot of medical tourism. How can this possibly be? Do you accept the natural conclusion of your argument - that Hong Kong, India, Malaysia, The Philippines, Argentina and Thailand have better health care systems than ours?
Of course not. Just because a treatment for a specific illness is cheaper (or better, or whatever) in another country, it doesn't follow that the health care systems of those countries are better for their own populations.
I specifically mentioned, in the European case, elective surgery and waiting lists. But your argument seems to be something like "Europeans countries don't have perfect health care systems. Therefore, ours is better."
Ezra seems like a genuinely nice guy.
But still, it's kind of scary to realize that the Washington Post considers Ezra to be an expert in economic matters.
I think it's important to remember that health care may very well be a situation that is prone to poor market function or possibly even failure. Let's remember the factors that tend to make for good markets-
1) Many buyers and sellers (or at least enough on both sides so that both sides of the transaction can move to a different market partner if they don't like the terms offered - the primary mechanism that enforces market pricing discipline)
2) Perfect, or at least somewhat symmetrical information
3) Low barriers to entry/exit for sellers
4) Low transaction costs
5) Homogeneous products
6) Desire for profit maximization
With the exception of #6, health care -- EVERYWHERE -- pretty much fails all of these tests. As far as #1 goes, there are usually far more patients than doctors, and in extreme situations (such as an emergency) there may be ONE doctor available who can save your life with NO opportunity for shopping or bargaining. For #2, doctors almost always know far more than patients about their condition and treatments (not to mention costs), almost a textbook case of near perfect asymmetrical information. For #3, it takes years of expensive training to make a doctor, a significant barrier to entry, as well as exit, since it's hard for them to deploy their skills outside of health care. For #4, because third party payers are almost always involved, health care often has huge transaction costs. And finally, for #5, despite attempts at board certification and the like, we all know there are frequently significant disparities in health care quality.
All this to point out that even before we make any kinds of decisions on governmental intervention in this market, it's likely that the basic structure of this market is going to make it hard for it to function well.
You add into this the fact that insurers and Medicare made a decision decades ago to set up the wrong payment structure that we're now locked into -- fee for service -- when what patients REALLY want is something more longer term. Or to put another way -- a patient doesn't really want an ACL surgery, what they want is regained mobility. So we pay for procedure and are then shocked, SHOCKED when we read things like Atul Gawande's article that demonstrates pretty hefty medical over-use. Combine that with my belief that we're seeing a greater proportion of chronic vs. acute care over the past few decades (certainly true with the number of cases of diabetes, as one example) for which fee for service is particularly ill-suited and you can see some of the mess we're in.
I'd love to see some ideas from Megan (or others) about how we might be able to do a better job of harnessing market incentives to fix some of these problems. What are the types of things we could do to bring the interests of patients, health care providers and (if used) third party payers into better alignment?
Most Europeans may not really know what happens here, but the reverse is true. The right is always maligning 'socialist medicine in Europe' when the truth is that European medicine is not a monolith. All the countries there have different systems and we could learn lessons from all if we could only see the trees and not the forest.
Brian
I believe I mentioned this in the post
But if you kill the last market, everything suddenly looks very different.
I don't know why you're so worried. If the US gains some degree of sanity and reforms its system, there will still be plenty of third-world countries that will continue to not provide health care to their people.
This might actually good for the developing world. Think of all of the opportunities that Republicans-posing-as-Libertarians will have to act as Health Tourists, waxing philosophical about the fantastic market freedoms found abroad while they tour clinics that poor people abroad can't afford to use. Reason Magazine can start a tour company and singlehandedly save the airlines from financial ruin, while the State Department will pay off the deficit by selling passports to people who have loved America so much that they had never left the country prior to booking their Health Utopia Tours (TM). Gee, I can't wait.
Actually, if we ever get to the point where private physicians, hospitals, and pharmas are in danger of going extinct, I expect many of them will expatriate themselves to friendly and moderately stable "thirld-world" countries.
If I were the president of Taiwan, or Singapore, or even Costa Rica or Panama, I'd find a way to invite the best doctors, the best clinics, and the pharmas to come resettle in my country. Then I think you really would see those things you are being so snarky about.
You are absolutely right. Once the Democrats have forced private insurers and private health care providers out of business, we will see the Mayo Clinic Barbados and the Mayo Clinic Tijuana, etc. George Soros, Barbra Steisand and their ilk will go to these off shore clinics for treatment under assumed names so that they can avoid scrutiny for supporting universal healthcare and using their millions to obtain better, more timely care outside the system they forced on the rest of us.
If I were the president of Taiwan, or Singapore, or even Costa Rica or Panama, I'd find a way to invite the best doctors, the best clinics, and the pharmas to come resettle in my country. Then I think you really would see those things you are being so snarky about.
Just to tackle the first item on your list, I guess that you weren't aware that Taiwan is considered to be a developed country and that it has a socialized healthcare system. So unless you're trying to prove that you don't really know what you're talking about, I'm not sure what you're trying to say here.
The Not Invented Here mentality that is destroying legacy American corporations isn't particularly good for federal governance, either. The US system doesn't work very well, as the facts make clear. The Ostrich Method of problem resolution may be appealing to certain large birds, but for humans, it just isn't that effective.
Hm. Funny how you rarely hear people talking about Taiwan or Singapore when they're comparing the US to the other developed countries. So--to borrow your own phraseology--I'm not sure what your point is, other than to avoid engaging the issue.
But no matter: I stated my position incorrectly (and I notice you didn't try to argue away Costa Rica or Panama on the same basis).
My point was--as I am sure you understand perfectly well--there's lots of places around the world that have, shall we say, more favorable economic and regulatory environments than the US will presently have under Obamacare, and the companies and practitioners most likely to be affected will simply relocate away from the unfavorable environment here.
I'm not the first to make the point that medical tourism is on the rise, and Obamacare will simply increase it.
In a sense, by the way, this is an increase in general--that is, planetary--welfare: it's a good deal for Costa Rica, and no worse for the US than would otherwise have been the case.
Assuming, of course, that you are part of the group of US citizens who can afford to go offshore for drugs or treatment.
"I'd be terrified of switching places with an American too, if American health care were actually one eighth as bad as most Europeans seem to believe. Yet despite that, as far as I know the net migration is actually the other way."
Excellent point.
The big problem in this country is that there is a large group of people who cannot afford a decent combination of the three big expensive items: housing, health care, and education. For many people, this is a structural but temporary crunch in the 20s, When people come out of school with educational debt and need to set up households for the first time, skimping on health care is a very typical solution. Call this Group A. For other people, temporary budget crunches may result from job loss or change of family status. Call this Group B.
For others, this budget crunch is a permanent state. Some people have disabilities or chronic conditions that force them to spend a great deal on health care, and that simultaneously limit their ability to earn the income to pay for it. Call this Group C. And others never got the education (or were unwilling or unable to absorb the education) that would qualify them for a job that would cover all their expenses. Call this Group D.
I think a government-run health care scheme to cover Group C alone would be a great idea. It would be reasonably affordable and morally justifiable to just about anyone, and it would eliminate the problem of how to get private insurers to take on these very expensive customers.
There's less of a moral issue about covering Group A and Group B. On the other hand, covering them would also be reasonably affordable in most cases, not to mention temporary.
The problem, as with all social welfare spending, is Group D. That's the big expense. Actually, that's the expense that will wreck almost any welfare scheme. If a large enough proportion of the population can't earn enough to cover its basic expenses on a permanent basis, something breaks. What that is depends on politics. It may be the medical system itself, if it is forced to treat too many patients on budgets that aren't enough to maintain facilities and keep staff from quitting. Or it may be some other part of the economy, if taxes are raised to funnel money to the health care system. It may be the lifestyles of the people in question -- what goes into the concept of "basic expenses" may get defined down. But you can't have a permanent plan to supplement the income and lifestyle of Group D unless either Group D itself is very small or the supplement is fairly trivial.
Really, the big (and currently unsolvable) health care question is how to raise the incomes and purchasing power of the working class and lower middle class. There's taxing "the rich," taxing future generations (by way of borrowing from China), squeezing resources out of the medical system, and sqeezing resources out of something else. Or... what? How do you raise people's incomes generally? That's the most sustainable way of making sure they are able to consume more health care, along with more of everything else.
Based on all the comparisons, it seems to me that the health care system in the US is at least comparable to that of other developed countries. You can find statistics where the US is better and where it is worse. So how much time and money (both government and private as patients and providers learn the new system) do we really want to spend to change a system that works at least moderately well for one that might work a little better or maybe a little worse (with a chance for a lot worse)?
The CBO estimated that the price tag for the Kennedy-Dodd bill is about $1.3 Trillion over ten years and that’s only because it’s phased in over five years and not an actual accounting of how much the bill will cost when/if it goes into effect. Congress did the same thing with Medicare Part D when they phased it in over three years IIRC so as to minimize the actual cost by counting three years where the program wasn’t actually in effect as part of the ten-year cost.
It would reduce the number of uninsured by about 15 million but also cause about 46 million people who are currently insured to lose their private health insurance and have to go on the government dole.
To put this in perspective of the estimated 46 million people without health insurance in our country, about 9-13 million are illegal aliens and about another 10 million are people who eligible for Medicaid or SCHIPS but don’t enroll unless and until they need to see the doctor (in other words, they’re essentially covered once they fill out the paperwork).
Enforcing our nation’s immigration laws and requiring that people who are already eligible for existing programs to enroll would reduce the number of the uninsured by a greater number than the Kennedy-Dodd plan without having to create a new government program or displace a single American citizen who has private health insurance.
Funny how you rarely hear people talking about Taiwan or Singapore when they're comparing the US to the other developed countries.
I have no idea what this is supposed to mean, but Taiwan has a socialized system, while Singapore has a free market-socialized hybrid that combines forced savings plans with pricing transparency and cheap government disaster care coverage, which encompasses most of the population.
My point was--as I am sure you understand perfectly well--there's lots of places around the world that have, shall we say, more favorable economic and regulatory environments than the US will presently have under Obamacare, and the companies and practitioners most likely to be affected will simply relocate away from the unfavorable environment here.
Most of this favorable world that you're talking about has some variant of this dreaded socialized medicine that you fear so much. So once again, you aren't making much logical sense.
The US is the great outlier here. If anything, it is this high-cost employer-based system that makes US business less competitive, as healthcare has become a substantial cost center to employers that gain little in return for funding it.
It's simply ridiculous to approach healthcare as if the US has to reinvent a wheel that has already been well machined by others. The US system is generally inferior to just about any developed world alternative you can think of, making it obvious that it is we who have to play catch up. The Not Invented Here mentality gets us every time.
It's only because Americans are a woefully insular people with a superiority complex and a general ignorance of the world around them that the rightist pundits get away with this stuff. If we spent less time flagwaving and more time candidly assessing our circumstances, we would know how duped we really are.
Megan, didn't you get the memo? The fact that the ideas of Klein et. al. are not new, have been tried before, and didn't end up working in reality is irrelevant. Obama has sprinkled the American populace with his magical hopenchange pixie dust and forever changed human nature, so they WILL work this time.
They aren't new. They have been tried before. And they worked and are actually working as we speak.
Well, 2 out of 3 isn't bad. But the first 2 are kind of the same, so it's more like 1 out of 2.
I'm sympathetic to Megan's argument that there's path dependence on these things, so some stuff that works in other countries may not work here.
But the argument about UHC going against human nature amounts to denial of reality. Next time, get a reality check on health care in Western Europe, Australia, Canada, Japan, South Korea, Taiwan, etc. before parroting false self-validating tirades disguised as profound insights on human nature.
Yes, health care in Western Europe does work (and works well by your prefered metric).
But it doesn't work for the reasons the left likes to argue that it does, and that was Megan's point. It doesn't work because it cuts out administrative and marketing costs, or because of economies of scale, or because it eliminates the need for profit. Those sorts of arguments may have sounded plausable but were wrong when Communists made them about industrial production and they may sound plausable but are wrong when the left makes them about medical care today.
From an economic persective, health care in Western Europe works (and works well your your preferred metric) because it takes money away from rich people that they would have spent on low-marginal-gain treatments for themselves and spends it instead on high-marginal-gain treatments for poor people. And from a political perspective, it works because most of the people who are thereby denied the low-marginal-gain treatments are old and die soon, while the people that benefit are young and continue to vote for many years.
You can try to justify such a system on utilitarian or social justice grounds, but of course that argument is not nearly as attractive as one that makes it appear that we will all get a free lunch if we just do it the government way.
This is simply ill-informed at best, or rank propaganda at worst. In most European countries, supplemental private insurers--many of them nonprofit--offer boutique care for those who want it and can afford it.
And NO ONE in any European country is denied ANY essential care. Please define what you mean by these "marginal-gain" treatments that are putatively denied to some Europeans--creditable sources, please.
I think you are just making this stuff up--or perhaps parroting viral fictions you have contracted elsewhere on the Internet.
They aren't new. They have been tried before. And they worked and are actually working as we speak.
I'm not speaking of universal healthcare per se. It does work, to some degree, which I will happily acknowledge - as you say, there are numerous other countries in which this is so. But it doesn't work perfectly in any of them, and switching to it in the U.S. would entail losing benefits we gain from our current system - everything has a tradeoff, and it's disingenuous for advocates of UHC to claim otherwise. I think there's a decent case to be made for it; my point is that the one Klein et. al. are making - that it will somehow magically alter the less pleasant realities of market economics for the better - is not a good one.
But the argument about UHC going against human nature amounts to denial of reality. Next time, get a reality check on health care in Western Europe, Australia, Canada, Japan, South Korea, Taiwan, etc. before parroting false self-validating tirades disguised as profound insights on human nature.
I'm going to call fail on this one. I've lived in Japan for five years, and have plenty of experience living under a universal healthcare system. In some ways it is better - there is less paperwork, and routine doctor visits are generally much simpler. In other ways, however, it's worse, in exactly the ways Megan and co. are predicting UHC in the U.S. would be worse - care is rationed, particularly for the elderly or those with chronic and expensive-to-treat but not life-threatening conditions. If you want to have a procedure that's not considered medically urgent, you'll either have to wait or go abroad for it. I'm not saying that this makes it inferior to the U.S. system, which is pretty messed up - but
universal healthcare is not a panacea. It will not create a perfect system. A lot of the problems liberals complain about will not magically go away. The sooner we acknowledge that, the better.
I don't think providing healthcare to the entire population is impossible on account of human nature, but a system that provides cheap, timely, universal, high-quality care to everyone, regardless of income? Yeah, that is impossible. There will always be drawbacks, and self-interest on the part of all concerned parties will always be part of the equation. Again, if UHC advocates would acknowledge that and make realistic arguments for their position, I might be inclined to respond to them with something more than snarky derision.
"it is not because they have managed to eliminate wasteful competition and centrally rationalize decision making. It is in spite of those things."
I live in Austria and while I am over-insured (with both private, as a retiree from the United Nations, and public insurance), I fear that you are not well informed about the role of government in health matters, at least as it is here (and Germany is very similar).
The Government has no monopoly on health insurance as I can well attest. Austria has over a dozen large heath insurance schemes (which one you have depends where you live or your employer, for example) and they are closely watched (and compared) as far as administrative costs are concerned. There is no compulsion to have health insurance (although it is wise to do so).
Many doctors here work on a completely private basis - or accept both private patients and those with health insurance.
The usual competition exists here as far as drugs go, generic vs patented. Public insurance plans charge a dispensing fee for prescriptions - some medicaments are not covered by the plans, but I have yet to be affected, and believe that all important prescription drugs are covered. Special permission is required for very expensive drugs (but this only means a second opinion is required).
In short there is a great deal of competition present in the health market, and there are no monopoly pressures forcing prices to be artificially low.