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POLICY: Up at Spot-on about rationing

I thought I’d spare THCB readers an article about yet more idiocy from libertarian so-called economists bitching on about Canada. As usual they have forgotten that economics is the study of how to allocate scare resources and so all economics is about rationing. But those of you who want to head over to my column in Spot-on called Rationing’s opponents: Happy in their fantasy world won’t be so lucky.

 

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กล้องThe Medical Blog NetworkDavid BriggsGregPeter Recent comment authors
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กล้อง
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The Medical Blog Network
Guest

Absolutely. Multi-payor universal (MPU) health system will need some thoughtful cross-subsidy / regulation. My point was that the most productive thing would be to start with admitting that MPU is the way to go and then work on defining the right subsidy mechanism. That is why I am a fan of Gov. Kitzhaber and his Archimedes Movement for trying to do just that. His plan of putting a waiver request in front of Congress will force this debate for real: Health System Reform: A New Hope. Unfortunately today, too many policy types (on both sides) spend too much time mis-understanding… Read more »

Matthew Holt
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Matthew Holt

Dimitry is right. But multi-payer universal systems still need some form of cross-subsidy/price-setting or they will die the adverse selection death.
And given that’s what Clinton was trying to put together in 1993-4, didn’t we already have out Sister Souljah moment?

The Medical Blog Network
Guest

I think many supporters of universal coverage are doing themselves (and the uninsured) quite a disservice by pushing “single payor”. Single payor is just not going to fly politically. Does it help to not make the distinction crystal clear and not strongly distance from the idea of complete government control over healthcare? NO WAY! Now is the time for Sistah Souljah moment to admit that there should be a role for private market on both provider and financing side. There is too much rhetoric. Reasonable people should admit that we will end up splitting the difference. Universal public baseline plus… Read more »

Matthew Holt
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Matthew Holt

Trap. Here’s my final word on your post. (Your comments are still screwed) You’ve pulled Krugman out of context again. The key word is IF, as in “IF the politicians accept…” But he realizes that full socialized/nationalized medicine isnt going to happen here, and so what he actually argues for is the expanded but limited role of government in medical care provision. The role he advocates for in the paragraph that Kling extracts has a decidely limited role for government that basically is the same as today’s. You and your fellow travelers continue to blatantly misrepresent what he argues for… Read more »

Matthew Holt
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Matthew Holt

David–my reccollection is that Canada grandfathered in some hospitals (including some private ones like the famous Shouldice Institute for hernia repair) and basically nationalized the rest. The physicians are independent operators (as are UK GPs, but not UK specialists) but in both cases they only have one client so the distinction is somewhat academic.
And your point about the Marines is correct…especially when one considers the Halliburtons of the world.

David Briggs
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David Briggs

Matthew: You wrote: “In Socialized Medicine (Canadian Hospitals, Scandanavia) EVERY PROVIDER works for the government and they own the hospitals. It’s a nationalized monopoly industry like say the Marine Corps. If “some providers” working for the government is “Socialized Medicine”, then we’ve got it here already with the VA and County hospitals.” I thought Canadian providers (hospitals and physicians) were not in the public sector. There are over 80 Catholic hospitals in Canada. The Canadian system is like Medicare – public financing of (mostly) private providers. The VA system is more like the British model – public hospitals and employees.… Read more »

Greg
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Greg

I am about to ramble, and for this I am sorry. But I think I figured all out this morning reading this blog and drinking my coffee. Tell me what you think. Doctors driving Porsche’s are not the problem here. The profit-driven insurance industry is the problem. I want my cardiologist to be driving a Porsche and to wear a nice suit because this reassures me she knows what she’s doing and is well-reimbursed for taking care of me. How about we combine the two approaches debated here. Let’s use the taxable income to determine what someone’s (or a family’s)… Read more »

Peter
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Peter

Canada is doing much better at controlling costs because it views healthcare as an expense, while the U.S. views it as a profit center, at least from the service provider point of view. My health premium jumped 39% this year after a yearly average increase over six years of about 12% compounded. I extrapolated my premiums out 10 years and figure I’ll need a minimum of $750 per month for health insurance, not including deductibles and co-pays. Just who is the U.S. profit model system trying to serve? Costs here are not controlled, their just passed on, now that’s efficiency!.… Read more »

Trapier K. Michael
Guest

For what it’s worth, envoking the “Baurmol Effect” is, more or less, saying that “the reason health care spending was so high was that we were so efficient elsewhere in the economy.”
But I agree, it’s not the strongest argument in the world, however true.

Matthew Holt
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Matthew Holt

I don’t think they’re quite talking about the same thing. They (I think) are saying that as we’re richer we spend more on luxury goods and most health care is a luxury good. And there’s some truth to that. I think Pauly was saying (and I dont have time to dig it out but I’ve linked to it on THCB in the past so google his name and you’ll get it) that the reason health care spending was so high was that we were so efficient elsewhere in the economy. I could be wrong about the details but again this… Read more »

Trapier K. Michael
Guest

Re: “the reason we spend so much money on health care is because we’re so efficient in the rest of the economy”
Perhaps you’re refering to the “Baurmol Effect”. [1] If so, you’ll be thrilled to see that Kling’s friends at Tech Central Station believe it matters in healthcare as well. [2] And you’ll be thrilled to see other prominent bloggers envoke it in healthcare too. [3]
[1] http://en.wikipedia.org/wiki/Baumol%27s_cost_disease
[2] http://www.tcsdaily.com/article.aspx?id=031006F
[3] http://www.janegalt.net/blog/archives/005720.html

Matthew Holt
Guest
Matthew Holt

Pauly is not stupid, he’s an idiot. Stupid means that he would’nt be able to produce the studies, put together the complex data, and develop the theorems he does. And they’re very complex. But an idiot will take those studies and decide from the conclusions something that palpably isn’t reality, such as “the individual insurance market works pretty well” and “the reason we spend so much money on health care is because we’re so efficient in the rest of the economy” both paraphrases of Health Affairs articles from Pauly in the 1990s. Of course given that he’s a tenuredU Penn… Read more »

Trapier K. Michael
Guest

“The use of the Canadian system is free, meaning taxpayers pay from a pool of tax money (their own), but if there was no form of rationing, the freeness would bankrupt the country as users pay no upfront use fees.”
Mark V. Pauly, a very prominent health economist at the University of Pennsylvania’s Wharton School, calls this phenomenon “Moral Hazard”. [1] Matthew thinks Pauly is *stupid*-that’s a quote from this blog. And Malcolm Gladwell thinks Moral Hazard is mythical. [2]
[1] http://www.wharton.upenn.edu/faculty/pauly.html
[2] http://www.newyorker.com/fact/content/articles/050829fa_fact

Peter
Guest
Peter

As a Canadian now living in the U.S., who has used both systems (Americans like to believe they have a system as if someone would actually invent what they have now), I have some input into rationing. Canadians do have rationing, but it is usually or attempted to be, by need, not by access determined by wealth. If there was no system for rationing in Canada that would be financially irresponsible, since the system is not intended to deny access and good care due to financial affordability. The use of the Canadian system is free, meaning taxpayers pay from a… Read more »