Not long ago (September 2006) David Leonhardt wrote perhaps his worst article ever about health care called The Choice: A Longer Life or More Stuff – New York Times. This set me off on a series of memes about dogs and sores. In fact I wrote this:

Like a dog licking an open sore, the  NY Times again returns to the "we spend so much on health care because it’s worth it" meme in a ridiculous article called The Choice: A Longer Life or More Stuff. (This post was about a different NY Times author’s stupid article on the same subject last month). They then print a bunch of reader responses, sadly few of which point out the fact that compared to countries who spend less money we’re not getting "longer life" (although the first one does).

But none of them point out the simple truth. We spend that much because the system has been politically rigged so that it’s virtually impossible not to. There is no causal connection between the vague desire for increased life expectancy on behalf of the public, and the increase in health care system spending. But there is a huge causal connection between the desire for greater health care system revenue on behalf of the system stakeholders and the increase in health care spending– because we have a funding system set up on their behalf. Has the NY Times not heard of, say, Medicare Part D? Have they not heard of 30 years of Wennberg’s Dartmouth works which proves that high cost care has bugger-all to do with improved outcomes? This is like saying we need 5,000 nuclear warheads or a brand new attack fighter 15 years after the end of the cold war, or that the drug war is effective. It’s patently not because we need those things, but it’s because there are strong interests that have gotten them funded!

And then they kept doing it again and again. All based in large part on David Cutler’s work that assumes that paying a gazillion dollars for an extra year of of life is “worth it”. Even if the person concerned could only generate a buck twenty-eight in that year, in that currency that we use to measure value called, you know, money.

But something remarkable has happened. Leonhardt has found his way to Damascus Dartmouth and apparently Cutler (who always ought to have known better, and has apparently been saying sensible-ish things to Maggie Mahar) has too. Today in the NY Times he writes about how we’re wasting tons of money in inappropriate care, and perhaps we ought to have one of those cost-effectiveness institutes like those in other countries.And who knows, it might be politically possible, without “culture” stopping it—because the root cause is political.

Still, we shouldn’t be naïve: a lot of people would lose if medical care came to be based more on what actually worked. <SNIP> So reforming the system will require a fight — not just over the meaning of the word “universal” but also over finding tough, sensible ways to save money. As David Cutler, one of the Obama campaign’s health care advisers, said, “These things are really hard, so they ought to be in the foreground.” The simple truth is that medical spending can’t continue to rise at its current rate. Somehow, we need to make choices.

I love converts.

UPDATE: I’ve had a little back and forth with David Leonhardt. It’s not over yet and it hasn’t made it into his reader response list yet either. At the moment it looks as though he’s suffering from severe cognitive dissonance…I’ll print here if he doesn’t there sooner or later.

Michael Cannon is dead right. His article What Mitt and Hillary Have in Common shows that the only rational way to start groping towards a management of the insurance market that makes some kind of logical sense (as John Cohn said in his excellent article on Hillarycare revisited at TNR). And that rational way must by definition involve a mandate and severe restrictions on the cherry-picking activities of insurance companies. But if you want to solve the perverse incentives in the current system, you need to do something like that.

Of course Michael doesn’t want to do that, doesn’t approve of mandates even when they make logical sense, and doesn’t understand the role of a regulator governing a market to try to ensure that no one takes advantage—even though the most capitalistic of all markets, the NYSE & Futures markets have strong regulatory bodies. But Michael’s opinions are shared by many on the conservative right which is why Mitt Romney is failing to mention the Mass health plan in the Republican primaries. I bet it will surface if he wins the nomination and starts running to the center (anyone remember “compassionate conservative”?).

Michael Tanner, (Cannon’s Cato colleague and co-author), however, goes off the deep end in criticizing another Michael, this one not a Cato scholar. He manages to ramble off a bunch of already refuted stuff about the evils of single payer without bothering to mention the most pertinent fact about our health care system compared to those Moore visits—it costs a whole lot more. He even claims that the French economy is falling apart because of the cost of health care.

Yet we’re spending nearly double what they are. So the question for Tanner isn’t our economy in the toilet? Could it be because the money with which Americans pay for health care is a different type of money from that the French use, because slightly more of theirs gets transferred through the government? (and no I’m not talking about $ vs Euros).

It’s good that at least one of the Cato boys is being logical. Although sadly Tanner’s demagoguery about the French and Canadians dying the streets because they have to pay higher taxes is probably more in tune with the typical Republican primary voter.

My, hopefully, final reply to the “we spend more because we do it better” argument from the free-marketeers is up over at Spot-on, called Not Too High on The Hog—a reply to David Hogberg. As ever come back here to comment.

I have my research, analysis and data. And the free marketeers, like David Hogberg, have theirs. Jonathan Cohn, whom I defended from another free-marketeer David Gratzer a few weeks ago here, has his views–belief in the need for what’s called a single-payer system–most of which I agree with. And Hogberg, who recently responded to the rhetorical questions I asked of the free-marketeers in the American Spectator, has his.The free health care market crowd claim that, compared to other nations, Americans are buying better care with all the extra money spent on doctors and hospitals and medicines and care. I say that the differences between care in different nations are a wash and are basically dependent on cultural factors anyway. So the important point is the consequence of spending all that money, and who’s suffering because of the way that we spend it. More

An article called West ‘on verge of medical crisis’ on how health care is all screwed up in the UK conservative newspaper The Daily Telegraph has this rather interesting subheader.

Western nations are on the brink of a crisis in medical services, according to the man credited with curbing the rise in health care spending in America.

Given that health care costs in America have been rising fast for the last 40 years apart from a brief period in the mid-1990s, I was very keen to find out who this hidden genius was. I initially suspected that Mark McClellan would be a little surprised to find out what the Torygraph thinks he’s responsible for! But reading down in the article, it appears that the boaster is McClellan himself.

Dr McClellan has taken a leaf from the Altman book. After years in which the Medicare budget exceeded projections, he managed to keep drug spending 40 per cent below projections. This "unprecedented" improvement followed moves to encourage patients to take generic rather than brand-name prescription drugs. The key was information, giving patients the wherewithal to see for themselves that generic drugs were as effective as their pricey counterparts, he told the meeting. Dr McClellan has taken a leaf from the Altman book. After years in which the Medicare budget exceeded projections, he managed to keep drug spending 40 per cent below projections. This "unprecedented" improvement followed moves to encourage patients to take generic rather than brand-name prescription drugs. The key was information, giving patients the wherewithal to see for themselves that generic drugs were as effective as their pricey counterparts, he told the meeting.

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