Indiscriminate

i'm no expert on single-payer systems, and i also can't really figure out what tyler cowens is getting at, but the argument for some form of nationalized health-care is that our expenditure on health care as a percentage of gdp is inordinately higher than other countries whose health-care outcomes are just as good as ours, not that single-payer systems (or some variation) will improve health-care outcomes as such (although, of course, since a very large number of people currently only have access to emergency rooms, i wouldn't be surprised if we had an improvement in health-care outcomes as well).

plus matthew's last paragraph.

The Brazilian city of Belo Horizonte does in fact subsidize fresh (organic) produce, which has not only improved the health of its poorer inhabitants but helped revitalize the inner city. But we couldn't do anything like that, because Lula loves Chavez. Or something.

I don't know why those bastards keep going back to first principles when every other first world country has better health care than we do.

It's always interesting seeing conservative economists work under the assumption that the insurance industry is efficient and provides good coverage. It's part of the free market, so it must be the best! Krugman and others have shown for a while that insurance companies are more wasteful than other alternatives because insurance companies have an incentive not to actually pay up and make their costumers jump through hoops. That's a big reason why we pay more than other industrialized democracies on healthcare, yet so many conservatives just won't admit to it.

Overconsumption of health care is a bigger problem than many people realize. Take surgery for Scoliosis, generally the surgery is "sold" as a way to improve health and stop the degeneration, but in almost every case te people wo have the surgery wind up with arthritus, and excercise is more difficult after the surgery so obesity is a risk. As long as doctors are trying to maximize profits the health care system will have problems like this.

1st world countries with single payer systems (e.g. Canada, U.K., France, Germany, Japan, etc.) spend far less per capita on health care than the U.S., but achieve health care outcomes that are as good or better than we do. More bang for the buck. Remember this the next time you hear the wingnuts going on and on about "socialized medicine".

Somehow I was under the impression that Tyler Cowen posed as some sort of economics person, but I can see from the excerpt that he can't possibly be.

Universal coverage with a single payer will increase the choice and availability of the services covered. This might subsequently reduce the demand for more costly services by preventing illness and disability, but in that case it would simply be a matter of a shifting or diminishing market for the tertiary services.

An analogy might be the introduction of small foreign cars to the US in the 50s and 60s. When a choice became available, people began purchasing VWs and Fiats. If Detroit, working with Nader, had not introduced a stiff trade barrier in the form of "safety regulations", they might have lost so much market share that they would have gone bankrupt for that reason, instead of going broke because they are imbeciles.

There is also what I shorthand as the "ego problem". Currently MD candidates are chosen in part, and then groomed for, very strong egos. And to a certain extent this is necessary, since some amount of arrogance and self-confidence are necessary for a person who will make a lot of actual life-and-death decisions.

The problem is that those with the most ego tend to gravitate toward what is considered today the "top" of the profession: extreme specialists, prestigious hospital department heads, etc. Making the health care system more efficient would almost certainly start with inverting this pyramid, giving far more discretion and control to primary care physicians (and even nureses for that matter). So it isn't just a matter of the insurance companies having vested interests, but the current "leaders" of the entire medical profession in the US.

Cranky

I don't know why those bastards keep going back to first principles when every other first world country has better health care than we do.

They have to go back to first principles because every other first world country has better health care than we do. (Actually, this probably isn't true of Tyler Cowen, who seems like he's just wedded to first principles.)

I guess my econ 101 textbook from decades back had serious mistruths. Reduced supply is supposed to increase prices, right? Why even think of choking it off?

Aside from the cost issue, medical care is unevenly spread to those places where there are payers with adequate money (insurance and direct payments) to provide a good living for providers. There isn't any particular reason why we shouldn't prefer more competition through greater supply except that it will lower costs and ensure available to more people.

You might argue that more supply will mean lower quality, but that would be very hard to prove in large-scale surveys of actual outcomes. And besides, most of the health care that we should be delivering is preventative and chronic care, which should require less than world-class providers at world-class (high) costs.

Another question for Tyler Cowen, the "economist"- does the WalMart policy of offering suppliers lower prices really diminish the choice available to us? I'm guessing that young people like Cowen are simply unaware of how few the choices were in 1960.

In any case, it's a trip into Bizaaro-land when we try to imagine further limiting the options in our heavily monopolized health industries. The drug companies, for example, working through the FDA, which can only be regarded as their tool, have managed to keep marijuana unavailable. For almost a century American doctors have enjoyed monopoly powers unequalled in any other part of the world. Wherever you look, American healthcare is a licensed monopoly extorting an extra pound of flesh from the patient.

We are not talking here of a situation where suppliers charge whatever price the market will bear. The real situation is that suppliers, using the coercive powers of the state, charge whatever they want, and the patient must pay or do without.

That's a pretty indiscriminate "choking off" of supply by any standard.

Meanwhile, the range of alternative things to spend money on that would do far more than health care to make people healthier is huge.

for me, addiction services would be another thing that would be HUGE towards narrowing useless healthcare spending on uninsured patients under the current system.

ironically, it's a major arguing point, too, for people who are opposed to universal health care. 'well, yeah, it sounds nice for everybody that's responsible, but i don't want all my taxes going to pay for all those junkies and bums and their huge medical bills.'

but, what if you gave all those junkies and bums REAL treatment for where their addictions start in the first place?

that is, in the vast majority of cases, substantial mental health services, so people don't have to resort to self-medication, and then if they do, a clear path out of that addiction is there if you want to.

yes, no matter what you do, there are still going to be people who are lost causes, and you can pour billions of dollars into mental health treatment for anybody wants it and there are still going to be people killing themselves and racking up massive medical bills in the process that the taxpayers foot, but how do those people grow in number if they ALL have at least the option of a way out that is in front of them?

america is over medicated due mostly to advertising by drug co.'s. the fastest growing addiction for young people happens to be Rx drugs. the drug of choice for don shula's teams was ritalin. gimme some of that ritalin and where's my helmet.

Shorter Tyler Cowen:

"I've got fifteen more bullshit rationales, and I'm going to throw them at you in increasing desperation, all the while enjoying healthcare that is routinely denied to millions of Americans."

"Choke off supply indiscriminately and you can save a lot of money without making people's health outcomes much worse. To generate a significant adverse health impact relative to the status quo, you'd have to be actively trying to produce a bad result."

Perhaps I misunderstand these two sentences, or the way they fit together and with the text around them. But the first sentence seems to me to betray a very common, and almost never acknowledged, misunderstanding about just how much better American health systems are than what they've got in Western Europe or anywhere else in the world, except perhaps in tiny, ultra-rich nations with private, American-trained medical staff. Don't get sick in Europe: they don't have our cancer treatments, they don't have our attention to screening of chronic health problems, they don't have our funding for advanced treatment, they don't have our diagnostic techniques, etc. They have some of it in a few places, but the differences are stark. I have a few chronic problems myself, and my wife comes from Germany, and her sister is a German doctor, and my sister is a lawyer who has worked extensively on cases involving American hospital practice. Don't get sick anywhere but in America.

Your second statement ("To generate a significant adverse health impact...") seems simply naive. Unintended consequences abound in health practice. They used to put "bleed" patients, and used leeches, for goodness sake. They used to think ulcers were mysterious things caused largely by stress, and eschewed proper treatment with antibiotics. They used to think leprosy and polio were contagious. People suffered from these wrong, but well-intended notions, which had no intent to produce bad results.

Matthew--

First, I agree with you that "the range of alternative things to spend money on that would do far more than health care to make people healthier is huge." I add spending more on public education to your list.

This is why we don't want to let healthhcare spending rise from 16 1/2% of GDP to to 18% or 20% etc. We've already reached a point of diminishing returns in many areas.

For example, since 1996 spending on heart attack victims has ccntinued to rise, but survival gains have stagnated. (see "Is Technological Change In Medicine Always Worth It? The Case Of Acute Myocardial Infarction" Health Affairs, March/April 2006)

Meanwhile, overtreatment is a huge problem--not just because it wastes dollars that could be better spent, but because it is hazardous to your health. Every drug or treatment has some risks as well as benefit. By definition, over-treatment means that there is no benefit--you are just being exposed to unncessary risks.

But that doesn't mean we have to "indiscriminately" choke off supply. (And from what you say, I don't think that's what you mean either.)

At this point we are beginning to gather more and more information about what is effective treatment and what isn't.

We have expamples of hospitals like the Mayo Clinic that achieve superior outcomes while not overtreating. It costs Medicare about half as much if a chronically ill patient receives most of his treatment during the final two years of life at Mayo rather than at UCLA hospital. Mayo gives patietns fewer tests and fewer drugs, puts them through fewer procedures and hospitalizes them for fewer days. (IF UCLA practiced medicine the way Mayo does, it would need 50% fewer physicians.)

Meanwhile, outcomes are better and patient and doctor satisfaction are higher at Mayo.

In a report that came out last month MedPac (the independent panel that advises Congress on Medicare spending) talks about
changing the way it reimbruses doctors and hospitals so as to that reward those, like Mayo, that achieve superior outcomes while conserving resources--and penalize those that waste resources while achieving mediocre outcomes. (Waste tends to go hand in hand with lower quality care. More care is not always better care. Frequently, it is worse.)

I've just written about this in "Dartmouth Medicine." If anyone wants more detail, you can find it by googling "Dartmouth Medicine" and "Spring 2007."

Don't get sick in Europe: they don't have our cancer treatments, they don't have our attention to screening of chronic health problems, they don't have our funding for advanced treatment, they don't have our diagnostic techniques, etc.

all this is if, of course, you happen to HAVE health insurance in america, right?

because if you don't, 'screening chronic health problems' is something you are willing to acknowlege is damn near impossible, right? at least impossible to do in a thorough and comprehensive manner. i mean, outside of allotting a majority of your available income to 'screening' that is. and if you're not making enough to afford health insurance, i'm sure 'a majority' is fair term for how much you are going to be paying, and isn't just a figure of speech.

you do realize this is a thread ABOUT how this country needs universal health care, right?

you can disagree with that, but to hijack a thread with platitudes about how great our health care system is, and then just simply ignore the people who don't have access to it while you proclaim how great our system is seems a bit backwards to me.

do you have statistics that state definitively that cancer morbidity is higher in europe than in the united states, by the way? you seem pretty convinced that we blow everybody out of the water with our treatment of cancer, so i'm assuming that comes from somewhere concrete.

Matt's rebuttal, reflected and supported in many comments, is not unreasonable, but it has a flaw: it buys into the line he's rebutting. And this guy isn't just trying out a new line, like the shifting defense of the war. It's the same old, same old, like Harry and Louise, that the government is going to ration your care. We have to keep insisting: private insurance now is rationing care, and badly; universal health care is a way of regulating funding, not doctors, so that everyone gets care.

Matt, it looks to me like you aren't really understanding what Tyler is saying.

1) Medical care is very difficult to measure in terms of quality.

2) The stakes are often so high in medical care that people will try out things that have very little (or in some cases no) actual benefit.

3) High costs are driven by lots of spending on high priced-articles with little value.

When he says "Single-payer systems will improve matters only if you think the government will make wise decisions about the supply chain." he means that they will improve matters if you believe that the government will be able to resist political pressure to spend money on marginal medical goods. Considering our experience with farm subsidies (which have negative economic value to the country as a whole but persist because small groups benefit greatly while the pain of paying is spread out to the whole nation) why would you believe that?

sebastian, there's a lot of things we can say to your attempt to parse cowen, but time is short right now, so let's cut to the chase: there are as many approaches to government-provided health care as there are countries providing health care, but one commonality all of them offer is comparable health outcomes at considerably lower costs as a percentage of gdp.

so i'll put my money on the tons of relevant empirical experience rather than on the assumption that government health care would be run just like farm subsidies. why would you use that as an example?

"When he says "Single-payer systems will improve matters only if you think the government will make wise decisions about the supply chain." he means that they will improve matters if you believe that the government will be able to resist political pressure to spend money on marginal medical goods."

While I agree that this is what Cowen meant, it's dead wrong. It reveals a basic ignorance of the various advantages a single payer system has over the current system.

A single payer system (or even a non-single payer universal system) could make a variety of politically driven poor policy decisions, and still produce far better health outcomes at far lower cost.

-----

Discussing the merits of government programs with Cowen is like discussing the sensitivities of the Imus affair with Steve Sailer. Those folks have built-in impediments to understanding the big picture.

"there are as many approaches to government-provided health care as there are countries providing health care, but one commonality all of them offer is comparable health outcomes at considerably lower costs as a percentage of gdp."

Ahh, but we've already determined that quite a bit of it is independent from health spending. If cutting grandma off from useless end-of-life care were really so easy in the US, insurance companies would do it now. The pressure comes from the US people. The government doesn't seem likely to resist that pressure any more than insurance companies do. In fact the government seems less likely to do so.

"If cutting grandma off from useless end-of-life care were really so easy in the US, insurance companies would do it now. The pressure comes from the US people. The government doesn't seem likely to resist that pressure any more than insurance companies do. In fact the government seems less likely to do so."

You really seem quite unclear on where the savings and efficiencies of a universal coverage system would come from...

Europe in general has higher farm subsidies, yet they spend less on health care. Different pressure points exist in different political systems.

"There is also what I shorthand as the "ego problem". Currently MD candidates are chosen in part, and then groomed for, very strong egos. And to a certain extent this is necessary, since some amount of arrogance and self-confidence are necessary for a person who will make a lot of actual life-and-death decisions."

Someone I know rather well was recently discussing this with a doctor who works and teaches at Johns Hopkins Medical School. He mentioned how JHU now prides itself on accepting applicants who are haughty assholes instead of good potential doctors. He also mentioned that if it wasn't for his high pay, he wouldn't put up with the people he has to deal with there. Apparently it has gotten worse in the past 20 years as the school shifted in its social atmosphere less from academics and more to cultivating their own prestige. Many people confuse having a big ego, being over-confident and being an asshole for being capable, competent and respected. Considering the status that JHU has in the medical community, I wonder if there has been a bit of a halo/spillover effect on the rest of the American medical community.

"Many people confuse having a big ego, being over-confident and being an asshole for being capable, competent and respected. Considering the status that JHU has in the medical community, I wonder if there has been a bit of a halo/spillover effect on the rest of the American medical community."

Well anybody who knows medical students/doctors personally knows this to be true. They are mostly self-absorbed assholes. For someone who chose not to become a doctor because it didn't seem like an interesting challenge, this would be more amusing if I didn't have to occasionally depend on them for my health!

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