Sunday, September 13, 2009

Great healthcare blog

Prof. Scott Harrington of Wharton is an expert on healthcare economics. I learned of him from his detailed op-ed in Monday’s WSJ, and then used that to find his website and blog.

Harrington’s blog provides the best and most detailed economic analysis I’ve found for the current healthcare debate. There have also been excellent heathcare posts at EconLog (a joint blog of several economists). (Econlog, Cato and Heritage are good places to track economic issues more broadly.)

Harrington’s blog pointed me to a dynamic column in Forbes about last week’s latest presidential salvo over transforming the healthcare system. Here are excerpts from the column by David Gratzer, MD:

Before a tense and packed House, the President told Congress:

"Millions of Americans are just a pink slip away from losing their health insurance, and one serious illness away from losing all their savings... And in spite of all this, our medical bills are growing at over twice the rate of inflation..."

That's President Clinton, sixteen years ago almost to the day, in a speech about a complex health-care plan built on government expansion, with billions in hidden costs. Last night, a President--who was only 32 then--is now in the White House, out to prove that nothing has changed in the minds of the Democratic leadership since the Clinton debacle.

President Clinton's health-care legislation didn't fail in 1994 because people didn't want better health care. The White House plan failed because it was too bureaucratic, too complicated, and too expensive.

The President (yes, Obama this time) told Congress that "our collective failure to meet this challenge--year after year, decade after decade--has led us to a breaking point." Has it really? When President Clinton conjured similar fears about pink slips and millions losing coverage to Congress in 1993, 15.3% of Americans were uninsured. In 2007, the percentage of Americans without insurance was...15.3%. A solution to this problem is needed, but the fact that it hasn't grown worse is a sign that Congress has time to think, and little reason to panic.

Since President Clinton spoke of health inflation in 1993, health costs continued to rise faster than wages, but President Obama refuses to acknowledge years later that the U.S. health inflation rate is almost identical to rates in government-run systems. Rising costs must be attacked, yes, but if rationed health management can't stop health inflation in Britain or Ireland, will a rush to President Obama's version of HillaryCare do any better?
The entire column (and both blogs) are strongly recommended.

Latest in a series of outsourced economic policy criticism as a cost-cutting move during difficult times.


Anonymous said...

With a rate of 15.3% of Americans still without insurance that is a very solid sign that the system has not improved in 15 years. It is also very likely the demographic that needs the most assistance, but time and again is gravely overlooked.
Our nation needs a change but many are afraid, be it personal investment at stake or simply fear of something different, to look at possibilities outside of what they already know works "just well enough." Just well enough however, isn't good enough for everyone. Not at a time when we are slipping down the world charts. There was an article I found written by several doctors and medical professionals and in the article there was a statistic that the World Health Organization has ranked the US as the 37th best country in health care,,com_sectionex/Itemid,200076/id,8/view,category/#catid107 this is very unacceptable considering at this point in time.

Joel West said...

The problem is that insurance is not the right metric — healthcare is.

There are millions of poor people who don't have insurance but are eligible for Medicaid. So there is no evidence that starting new programs to serve these people will make much of a difference.

There are also subgroups that self-insure. If they were required to buy major medical -- with say a $10,000 or $50,000 deductible -- society's interest in blocking free-riders would be met.

As many have noted, anyone in America (legally or not) is entitled by law to healthcare for life-threatening conditions. Meanwhile, less urgent care is limited by all systems -- insurance, single payer, private payer.

Finally, there is the question of supply. If the claimed goal is to pay for healthcare to cover people who don't have it, then you should expect an increase in demand. If you don't have an increase in supply — more doctors, nurse, facilities — then you will need rationing to allocate an inadequate supply.

Of course, if we used market forces to allocate demand or attract supply, this wouldn’t be an issue. But right now this is the furthest from the mind of congressional leaders.