Friday, June 17, 2005
Krugman versus reality on Medicare.
Paul Krugman makes clear the model of national health care he is lobbying for: Medicare!
But is it really highly successful as a health care program -- as opposed to being merely politically successful?
By what measure do we judge its success? Where is the evidence of this success? Let's see...
Krugman continues...
An advantageous program provides not low cost but value for cost, quality for cost. That's not difficult to understand.
Low cost by itself can be obtained simply by denying people the services they need, to keep the tax bill down. By keeping people waiting in lines until they drop out ... for one reason or another.
And as to the particular quality-for-cost provided by the Canadian system that Krugman cites as an model to be emulated, he seems to have missed the NY Times' own report of the Canadian Supreme Court's ruling striking down the system's single-payer nature as an unconstitutional danger to the citizenry's health, exactly because of those long waiting lines that keep costs down...
But what about the US's own Medicare system? If the objective is quality-for-cost, how does Medicare measure up? There is peer-reviewed research on the subject...
Gee whiz, that's modern liberal "reform" for you!
But however can Medicare be so inefficient?
For a view from the bottom up, take a look at how Medicare provided for just one relatively small expenditure -- which can then be multiplied by millions.
A while back, Money Magazine traced the case of "The $49,000 Hip"
Since you've read this far here, I urge you to take a few minutes to read that whole thing -- and to form your own opinion. (Although if after doing so anyone's opinion is anything but that Medicare has already destroyed the functioning market for hospital services, including for non-Medicare patients, and substituted for it a new GOSPLAN that's producing the same results of the original, it will be beyond me.)
If you want an explanation of the spending-quality "negative relationship ... driven by the use of intensive, costly care that crowds out the use of more effective care", it's right there. Medicare pays more for expensive procedures, not for effective ones. (Just what GOSPLAN did!) And doctors give it what it pays for. Of course!
Alternatively, for a top-down picture of the irrational inefficiency of Medicare, just step back a bit and look at it from the largest structural point of view.
Any rational, efficient insurance system has people provide for their own predictable out-of-pocket expenses -- which preserves a functioning market, with its innovation and cost efficiency -- while pooling resources against risk of calamity that is unexpected for any one individual but which occurs with predictable probability among the members of a group.
Thus, you pay for your own car and its gasoline, oil, tires and maintenance -- but if you have an accident that destroys your car and sends its occupants through the windshield, your insurance pays for the resulting costs. The common sense behind this is obvious.
But Medicare is structured in exactly the opposite manner. It pays for routine, predictable expenses -- examinations, tests, quick treatments and now prescription drugs too. But if you have a calamitous stroke that forces you to move to a nursing home for years, it doesn't pay for that -- and you can lose your home, life savings, virtually everything you own.
From either an insurance or health care point of view this is just irrational, to the point of being madness.
But, of course, it is entirely rational and very sane from the point of view of the politicians who design the program. The average voting citizen knows he or she will incur routine medical costs after age 65, but doesn't believe he or she will be among the minority who will become suddenly disabled as a victim of some medical calamity. This risk is greatly underestimated by near all.
So the politicians profit more -- get more credit from voters -- by picking up predictable out-of-pocket expenses voters expect than from providing the insurance coverage that voters actually need. So that's what they do.
And we citizens end up paying ever more every year (soon it will be a whole lot more) for a backasswards insurance system that covers routine expected costs while leaving calamity insured.
And this is the model Paul Krugman, economist, endorses and wants to expand.
After seeing it be ruled unconstitutional due to fatal waiting lines in Canada. With the quality of outcomes separated from cost here -- and with expenses people can afford out-of-pocket covered but calamities not.
Go figure.
UPDATE: Krugman in today's column warns that we can't trust politicians (a second thing we agree on!) citing a workers compensation scandal in Ohio. He's correct, of course -- and think of if those politicians had had their hands on national health care, instead of a local workers comp program. Just imagine!
Here's a rule of thumb that's useful to keep in mind when considering the wisdom of any proposed government policy: There is no government, there are only politicians. The government is politicians.
So instead of pondering whether, say, you want "the government" managing your health care, ponder whether you want self-interested politicians managing your health care. Including those politicians of that other party, the ones you despise so much ...
Paul Krugman makes clear the model of national health care he is lobbying for: Medicare!
I like Ted Kennedy's slogan "Medicare for all." It reminds voters that America already has a highly successful, popular single-payer program, albeit only for the elderly.Well, we can agree on one thing -- Medicare is popular among recipients. Why wouldn't it be? Today's recipients get a benefit worth (literally) hundreds of thousands of dollars without having to pay for it. What's not going to be popular about that?
But is it really highly successful as a health care program -- as opposed to being merely politically successful?
By what measure do we judge its success? Where is the evidence of this success? Let's see...
Krugman continues...
The great advantage of universal, government-provided health insurance is lower costs. Canada's government-run insurance system has much less bureaucracy and much lower administrative costsAh ... low cost is the measure of success? No, I don't think so -- and I don't think anybody who is serious about the subject thinks so either.
An advantageous program provides not low cost but value for cost, quality for cost. That's not difficult to understand.
Low cost by itself can be obtained simply by denying people the services they need, to keep the tax bill down. By keeping people waiting in lines until they drop out ... for one reason or another.
And as to the particular quality-for-cost provided by the Canadian system that Krugman cites as an model to be emulated, he seems to have missed the NY Times' own report of the Canadian Supreme Court's ruling striking down the system's single-payer nature as an unconstitutional danger to the citizenry's health, exactly because of those long waiting lines that keep costs down...
The court ruled that the waiting lists had become so long that they violated patients' "life and personal security, inviolability and freedom" under the Quebec charter of human rights and freedoms, which covers about one-quarter of Canada's population.OK, so much for Canada, its own courts have spoken.
"The evidence in this case shows that delays in the public health care system are widespread, and that, in some serious cases, patients die as a result of waiting lists for public health care," the Supreme Court ruled. "In sum, the prohibition on obtaining private health insurance is not constitutional where the public system fails to deliver reasonable services." ...
[Plaintiff] Dr. Chaoulli declared a victory and predicted that the decision would eventually apply to all Canada. "How could you imagine that Quebecers may live," he asked, "and the English Canadian has to die?"
But what about the US's own Medicare system? If the objective is quality-for-cost, how does Medicare measure up? There is peer-reviewed research on the subject...
States that spend more on Medicare don't necessarily have better health care, according to a study being published Wednesday. In fact, health care in those states may be less effective and lower in quality.The study itself put it even more plainly...
The study found that New Hampshire, which had the highest overall quality ranking, spent the least at $4,863 per beneficiary, while Louisiana, which spent the most at $8,238 per beneficiary, had the lowest quality ranking....[Cox news]
We find that states with higher Medicare spending have lower-quality care. This negative relationship may be driven by the use of intensive, costly care that crowds out the use of more effective care...And more, from another study with similar findings (there's sure no shortage of them!) ...
we find that a large component of Medicare expenditures ... nearly 20 percent of total Medicare expenditures -- appears to provide no benefit in terms of survival, nor is it likely that this extra spending improves the quality of life.So we see Krugman endorsing as "low cost" a system where the observed relationship spending and medical outcomes is negative -- and which has an estimated 20% waste that provides no benefit in terms of either survival or quality of life.
Gee whiz, that's modern liberal "reform" for you!
But however can Medicare be so inefficient?
For a view from the bottom up, take a look at how Medicare provided for just one relatively small expenditure -- which can then be multiplied by millions.
A while back, Money Magazine traced the case of "The $49,000 Hip"
Since you've read this far here, I urge you to take a few minutes to read that whole thing -- and to form your own opinion. (Although if after doing so anyone's opinion is anything but that Medicare has already destroyed the functioning market for hospital services, including for non-Medicare patients, and substituted for it a new GOSPLAN that's producing the same results of the original, it will be beyond me.)
If you want an explanation of the spending-quality "negative relationship ... driven by the use of intensive, costly care that crowds out the use of more effective care", it's right there. Medicare pays more for expensive procedures, not for effective ones. (Just what GOSPLAN did!) And doctors give it what it pays for. Of course!
Alternatively, for a top-down picture of the irrational inefficiency of Medicare, just step back a bit and look at it from the largest structural point of view.
Any rational, efficient insurance system has people provide for their own predictable out-of-pocket expenses -- which preserves a functioning market, with its innovation and cost efficiency -- while pooling resources against risk of calamity that is unexpected for any one individual but which occurs with predictable probability among the members of a group.
Thus, you pay for your own car and its gasoline, oil, tires and maintenance -- but if you have an accident that destroys your car and sends its occupants through the windshield, your insurance pays for the resulting costs. The common sense behind this is obvious.
But Medicare is structured in exactly the opposite manner. It pays for routine, predictable expenses -- examinations, tests, quick treatments and now prescription drugs too. But if you have a calamitous stroke that forces you to move to a nursing home for years, it doesn't pay for that -- and you can lose your home, life savings, virtually everything you own.
From either an insurance or health care point of view this is just irrational, to the point of being madness.
But, of course, it is entirely rational and very sane from the point of view of the politicians who design the program. The average voting citizen knows he or she will incur routine medical costs after age 65, but doesn't believe he or she will be among the minority who will become suddenly disabled as a victim of some medical calamity. This risk is greatly underestimated by near all.
So the politicians profit more -- get more credit from voters -- by picking up predictable out-of-pocket expenses voters expect than from providing the insurance coverage that voters actually need. So that's what they do.
And we citizens end up paying ever more every year (soon it will be a whole lot more) for a backasswards insurance system that covers routine expected costs while leaving calamity insured.
And this is the model Paul Krugman, economist, endorses and wants to expand.
After seeing it be ruled unconstitutional due to fatal waiting lines in Canada. With the quality of outcomes separated from cost here -- and with expenses people can afford out-of-pocket covered but calamities not.
Go figure.
UPDATE: Krugman in today's column warns that we can't trust politicians (a second thing we agree on!) citing a workers compensation scandal in Ohio. He's correct, of course -- and think of if those politicians had had their hands on national health care, instead of a local workers comp program. Just imagine!
Here's a rule of thumb that's useful to keep in mind when considering the wisdom of any proposed government policy: There is no government, there are only politicians. The government is politicians.
So instead of pondering whether, say, you want "the government" managing your health care, ponder whether you want self-interested politicians managing your health care. Including those politicians of that other party, the ones you despise so much ...