Krugman’s series on health care continues in the NY Times and no doubt Don Johnson (over at BusinessWord) will be fulminating over this too. Don got a little offended when I called his stance mean. Don is a sensible guy and understands health care well, even if we disagree on on policy and politics.  So what do I mean by "mean".  Let’s ignore the fact that Don thinks that moderate social democrats like Krugman and Uwe Rhienhardt are the hard left — any observer of real politics would be giggling at that one.  I mean have they seriously suggested nationalizing health care delivery? No. Let alone nationalizing steel, autos, oil, and even agriculture.  (Yup, Don, that’s what the "hard left" from Lenin to Bevin did.  By his standards FDR was a Bolshevik).  But let’s look at Don’s opinion:

"I guess it’s ‘mean" to advocate regulated free markets that:
1. Help us have the lowest unemployment levels and lowest income taxes.
2. Give people who take the time to become educated, find rewarding jobs and seek out health care providers they like the freedom to spend their money on health care, if they think that’s important.
3. Try to minimize the role of centralized governmental planners who’ve never successfully created a health care system that cares for everyone in the country and makes everyone happy.
4. Give everyone incentives to earn the money needed to buy the best health care they can afford.
5. Not force wage earners to pay for the health care of strangers who could buy their own insurance if the politicians weren’t so good at giving everyone else’s money away in exchange for votes of the unthinking left."

The problem with this rhetoric is threefold. First, even if one accepts that we have "regulated free markets" in the rest of the economy and all those commies in Europe, Canada and Japan don’t, no one can seriously maintain that health care is a regulated free market like, say, buying groceries. It fails all of Adam Smith’s sniff tests for being in a state of perfect competition, and any serious student of the subject only has to read another Princeton hard lefty Paul Starr to know that the combination of vigorously pursued professional hegemony and third-party payment has left us with a system run by providers of various types, mostly for their own benefit.  So health care isn’t a regulated free market and people aren’t in a position to "spend their money on health care, if they think that’s important" the way any rational economist would understand–even if the vast majority of people didn’t have third party payment to cover that spending — which they do.

Second, Mark Pauly, a health care economist who is in Don’s camp wrote a hysterical piece in Health Affairs a few years back suggesting the reason we were so inefficient in our health care spending and spent so much on it, was that we were so efficient in the rest of the economy —  and could therefore afford to act like drunken sailors when it came to health care. I never understood why just because we had (apparently) lots of money to spare because we are a rich and productive nation, we should spend it all on a very inefficient health care system rather than, say, on Frappuchinos, education for first graders, or invading foreign countries which don’t have anything to do with us. There is no rational connection between the overall economy and how we choose to allocate resources to health care.  How we allocate resources to health care, and how much we allocate, is largely a political question. It’s directly political (in the 50% that the government pays for) and indirectly political in how (in order of importance) the government treats the taxation of health benefits, how it controls the industry’s pricing and capital spending, how it encourages its citizens to allocate their resources, and how it allows lawyers to persuade doctors (and doctors to persuade doctors, and drug companies to persuade doctors) that more care rather than less care is better. What any of that has to do with overall productivity in the economy escapes me. Finally while it may be a nice idea that health care is a luxury good that consumers will buy on the margin in preference to other luxury goods, that is not how we’re buying it yet and won’t be for quite some time.

But the third issue is where I call Don mean. Politically we have a straight choice.  We know that the costs of the health care system fall disproportionately on the poor and the sick.  And we also know that access to health insurance coverage is lower among those groups. Suggesting that people could voluntarily buy health insurance but just aren’t doing so is in my opinion total BS, and appears to be backed up the the opinions of America’s employees who are desperate to maintain their health benefits from their employers. Further we know that those without health insurance struggle mightily with the costs of care, and many more of them are in trouble than their equivalents in other countries where their access to coverage is subsidized by those people paying those high taxes that Don obsesses about (something else that needs to be refuted in another post).

You may recall that in the last couple of years we’ve had the ability give big tax cuts to the rich, and to spend nearly $100bn a year invading Iraq. The money that went on either of those political initiatives would have easily covered expanding health insurance coverage for those at the bottom end of the social ladder. In general you’re either for this or you’re against it.  And I think that, knowing the consequences of not having insurance on the health and wealth of those without it, to take the "against" position is mean.

As if this one couldn’t be seen coming a mile off.

When you have nothing to say about an issue, change the numbers. In the 1980s the Thatcher government in Britain reduced the number of unemployed at a stroke by changing the way they counted them. If you were not eligible to collect benefit because, say, your husband or wife earned too much, then — Hey Presto! — you weren’t unemployed any more, even if you’d been laid off and couldn’t find a new job. Now we hear that the Administration is saying that the CPS apparently overcounts the number of uninsured.
And this is from the clowns who brought us guarantees that WMDs were in Iraq and that the invasion of said nation would be paid for by the oil revenue, as our soldiers would be greeted with sweets and flowers. And we should trust them over decades of decent research by the census bureau why?

Oh, and Thatcher changed the counting to try to stop the unemployment number going over the political sensitive 3 million number.  But for all her efforts it went over that number under the new counting system within a few months anyway.  And anyone who doesn’t think we’ve got a crisis going on in uninsurance here either has never tried to buy health insurance in the individual market, or just doesn’t get out enough.

Just briefly today….

It looks like Medicare is just starting down a path that it inevitably will have to take.  Deciding when and how to say no.  The NY Times has an article about the very start of this trend.

(Fixed Link)

I like Don Johnson’s blog Businessword but sadly when you really push him, as I’ve done in his comments over the last couple of years, he either won’t answer or his answers reveal a political philosophy that is downright mean. So in his criticism of Krugman’s analysis on his blog and in comments at THCB here, Don essentially says that if you’re poor or sick in America, well that’s just tough titties. And, as a by product, it’s OK for the insurance market to screw over those who really need individual insurance because, well, because it’s a "market". Same way it’s OK for Enron to defraud the California rate payer, or same way it’s OK for Healthsouth to defraud its shareholders. After all they’re operating in "markets" too.  But Don misses the wider point. Because of the way the US system is set up  — because we’re a richer country than any in Europe, and because the majority of people can afford to pay way too much for our health care —  we systematically overpay for things that no rational market would value. That does not help our economy, it hurts it as most health care spending is non-productive to the overall economy.

The other point that pro-unrestrained booty capitalists in health care, or those Krugman was criticizing, go on about is the huge waiting lists in Canada and the UK.  Well as I mentioned in the UK the wealthy can trade up with their own money while the less well-off get a decent standard of care. Meanwhile single payer advocate Don McCanne found this just excellent chart from Stats  Canada which shows that median waiting times for non-emergency surgeries in Canada  are just over 4 weeks! I’m more than prepared to wait 4 weeks for non-emergency surgery if it means that poor people wont be crushed by their medical bills and can get access to basic health care. (For far more details on this see my "Oh Canada" piece).  And anyone who doesn’t think that’s a fair equation is just mean in my viewpoint. Not to mention that such a system would cost me as a tax payer and a premium payer less money! Money I could spend on other, more productive things, like Frappuchinos.

Ezra Klein is a nauseatingly over-achieving student at UCLA who, at an age when I was trying to pick sufficient 10p pieces out of the gutter to buy myself a half of ale at the college bar (and usually end up back in the gutter), has a successful blog and is on the way to becoming a writing star of the liberal ilk. Ezra’s blog goes all over the map in a fascinating way.  This week he’s featuring a whole series on health care systems in other countries.  Dangerous work, Ezra — that’s where I started.  The first one is about Health Care in France and it’s really good.