By Matthew Holt

I just watched the closing ceremony of the Olympics, and the word is that state sponsorship of little known or cared about sports like swimming, gymnastics and cycling gets more medals and so should be encouraged. Bob Costas told me that China spent $40 billion on the games, even if London is going to spend less than half that. So it got me thinking about socialism.

Kevin Pho, blogger of KevinMD fame, and usually reliably anti-government in his views, asks for more socialism, at least directed in the direction of him and his fellow MDs. In this USA Today op-ed he suggests rightly that cutting doctors fees in itself saves little in health costs..

Kevin is right. Physician costs are about 20% of overall
health costs, so a 10% cut, which would translate into a bigger cut for
doctors take home pay because their costs of running a practice are
largely fixed, would only mean a 2% reduction in overall health costs. And those costs are going up at about 6-8% a year. So great pain for doctors would be barely noticed by the rest of us.

Of course, the
rational thing to do would be to completely overhaul how we pay doctors
and what we pay them for. For primary care docs like Kevin this would
be good. But for many of the 70% of American docs who are specialists,
this would be very bad. So the political fight Kevin is decrying will
continue. And doctors will figure out how to get around the fee cuts as they’ve been doing since they were introduced.

Meanwhile, I was sent a book by the single payer crowd explaining
ten reasons why universal health care is good, but also that it’s not socialized
medicine. I don’t understand why are they at such pains to say this. As
is pointed out in this article from a major newspaper
in the great Red (as in Republican not communist) state of Montana, socialized medicine works very well and is
better for doctors and patients than mainstream American medicine. Of course it’s not called socialized medicine, it’s called the VA.

Finally, the dog that was licking its sore excessively a few years back has returned. It’s now appearing in the WSJ, where it should have stayed in the reliably batty opinion pages, but has instead shown up in the normally sensible Health Blog.
The sore that is being licked is the ridiculous idea that the US spends
18% of GDP on health care because it is a) rich and b) has decided to
do so in a rational manner. The proponent of this idea, a believe it or
not Nobel Laureate in economics called Robert Fogel, was the source for
the first of four incredible articles about this in the NY Times in 2006.

He’s saying the same stuff again, and so it bears repeating that the national spending on industries for which the spending is largely determined by the lobbying strength of the industry participants is not a factor of the nation’s wealth, but one of the political strength of the industry participants.
And there’s nothing "rational" about it. Understandable yes, but any
economist who can say that our health care spending is rational both in its total
and in how it gets spent should be forced to go and retake Political Science 101. You can read my screed
from last time, so I won’t repeat it here — other than to note that the
danger of American-style socialism is that we get a lot of crap that we don’t need because it makes sense for those that provide said crap
to ensure it gets funded. To wit missile defense systems,
unnecessary angioplasties and big sports stadia given to billionaires.

Which means we really are rather like the Chinese after all — even if our gymnasts probably are actually 16.