Even Tim Noah is Kidding Himself About Health Care Costs

A mostly political weblog.
April 14 2009 4:21 AM

Even Tim Noah is Kidding Himself About Health Care Costs

Tuesday, April 14, 2009

My colleague Timothy Noah argues that a) Congress "must" enact health care reform because "health care costs have spiraled out of control," and b) the "consensus" (that is, insurer-endorsed) cost saving solutions are inadequate:  

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Some of these (more electronic recordkeeping, more preventive care, tighter restrictions on malpractice litigation) would be worthwhile even if they didn't save money. Others methods [such as "best practices" protocols] risk creating more problems than they solve. But the bottom line is that the insurers' basket of proposals would not, even by their own reckoning, cut health care costs; instead, they would cut the rate of growth in health care spending by 6 percent to 7 percent.  

Therefore, c)

If you really want to rein in health care costs, then consensus reform options like creating a comparative effectiveness board won't get you very far. For the true spending hawk, I see no practical alternative to the "socialist" public option.

First, just because rising health care costs have eaten up all of the average American's wage increases, it does not necessarily follow that either this rise was unwarranted or that health care costs need to be controlled. Maybe Americans, like richer people everywhere, want to spend more money on health care (as opposed to, say, newspapers) and advances in health care have given them more valuable services to purchase (or have their employers purchase for them). That's probably not true--and almost certainly not 100% true--but you can't tell it just by looking at Noah's big graph. (Nor do I understand Robert Samuelson's column, which seems to argue that because health care is not "material" it isn't a valuable service and can't be the basis for capitalistic economic growth.)  If the graph showed that rising expenditures on computer technology had eaten up all the increase in Americans' paychecks, would we immediately declare a "computer cost crisis" and demand that rising laptop expenditures be constrained? Or would we say, "Hey, people are spending a lot more on computers these days"?

Second, the savings you get from the "public option"--savings on marketing and administrative costs, ability to use the massive purchasing power of the government to bid down prices--seem like one-shot propositions . We switch to a public plan, we save our 20-30 percent on administration and bargaining, and then the rise in health care costs resumes, thanks to ever-fancier technology and complex treatments (that actually are effective--just expensive). Soon costs have eaten up the 20-30 percent and are back on a rising path to consume a growing share of GDP, no? 

The lesson I would draw isn't that we shouldn't try to reform health care, or that we shouldn't try to reduce costs. It's that we shouldn't reform health care in order to reduce costs, and that we shouldn't expect health care reform to in itself control the health care entitlement problem that's scheduled to devour the budget. We should reform health care to provide long life, security and peace of mind to Americans, while we resign ourselves to the likelihood that this will consume an ever-larger portion of our economy.   1:44 A.M.

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Does Mickey Kaus really think that low-wage workers in Mexico and Central America play this much attention to... [the progress of amnesty plans in Washington]  

Um ... yeah! That is, they hear the news, perhaps false news, that legalization is or is not in the offing. Why wouldn't they pay more attention than the average American? The news affects them more directly, no? (If you look at Spanish-language papers in the U.S, certainly, you'll notice a rather intense focus on immigration-related developments, especially the possibility of legalization.) ... 1:42 A.M.

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