Tuesday, June 16, 2009

Health Care Costs

Megan McArdle compares the left's promise to cut health care costs to the right's support of tax cuts as a means of growing government revenue. Here's what McArdle has to say on health care, which I'm much more interested in than the Laffer Curve at this point.

I'd say we have substantial empirical evidence that we are not going to control the health care cost inflation which is busting Medicare's budget, much less the new costs the administration is planning to add. We have been trying to control health care costs since the 1970s made it clear that Medicare was going to get really, really expensive. And any idea that you care to name, from comparative effectiveness research to healthcare IT to preventive medicine . . . these have all been on the table for more than thirty years, under one name or another. They haven't happened.

The answer that those promising magical cost reductions need to ask is "Why haven't they happened?" and "What has changed to make them feasible now?" But when I ask this question, I get angry demands that I put forward my plan for cost control, rather than merely critiquing everyone else's. This seems rather like demanding that I put forward my design for a perpetual motion machine before I am allowed to point out problems in the US energy market.

To those who say, pretty reasonably, "Why not demonstrate that you can control these costs in Medicare before asking us to believe you can do it with a broader program?" the response is something like a snapped, "But I don't want to just control Medicare costs! I want universal coverage!" Ah. Well, Republicans don't want to maximize tax revenue; they want to cut taxes. This does not make their now-deliberate wishful thinking any prettier. Nor obligate the rest of us to fulfill their desire at the expense of sound budget policy.

Perhaps the most telling rebuttal was the quite honest point made in the comment section.

Doesn't seem false to me. The evidence is that many other countries spend significantly less than the US while being comparable in relevant public health measures (life expectancy, infant mortality, etc.). So while cutting costs would certainly change the type of care delivered- fewer hip replacements, less heart surgery, etc.- it need not change the effectiveness of the care.

I know, I know, it's not the only reason and may not even be the biggest reason, but it's certainly a factor in the costs of the American system- Ordinary folks get more varied and different kinds of care than in the rest of the world. As I know from when I had my own arthroscopic knee surgery, the waiting lists for similar procedures in countries with government provided care can be months or longer. I didn't avoid a long waiting list for knee surgery because I was rich, I was just covered by a typical health insurance policy. And this is precisely why you will not be able to drastically cut health care costs in this country, because a vast majority of Americans have grown use to and expect that level of service. The lower costs models of other countries can't be applied here because there's no politically feasible way to cut back on anything we've already got.

The public may clamor for lower health care costs, but this is the same public that clamors for lower taxes while demanding more services. The insatiable and economically illiterate demands of the masses are just not possible.


Post a Comment

<< Home