Arnold Kling  

Jonathan Cohn Needs Masonomics

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He writes,


You don't have to choose between universal access and innovation. It's possible to have both--as long as you do it right.

By universal access, he means a government-run system. By innovation, he means wonderful new medical procedures. The article discusses the fear that if government cracks down on spending, then innovation will slow down. He says that this is a reasonable argument against a government-run system, but not if you "do it right."

The Masonomics perspective is that there is no known way of doing things right. It is not just medical treatments that require innovation. The entire health care system and all of its institutions could benefit from innovation.

The advantage of markets is that they foster innovation. They reward successful innovation. Moreover, they eliminate obsolete institutions and organizations.

Government is much more likely to protect incumbents. Regardless of whether it stifles innovative treatments, government will certainly stifle innovative ways to organize and deliver health care. Indeed, it already does so, with its restrictions on medical licensing and practice. A complete government takeover could only make things worse.

From that perspective, Ramesh Ponnuru is correct to point out that the real radicals in health care reform are not to be found on the Left. Even a single-payer system, which none of the leading Democratic contenders openly endorses, is not much different from what we have today. It is those of us who are willing to pull the government rug out from under the existing system who are the radicals.


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COMMENTS (9 to date)
Simon Clark writes:

You don't have to choose between universal access to cars and innovation. You just have to do it right.

Unfortunately (fortunately?) nationalised car industries suck. If there was such a thing as a right way to make a car, cargov wouldn't do it. Since there are thousands of ways to make a car, they couldn't possibly do all of those. Markets do.

8 writes:

What do you make of the politics of healthcare on the "right wing"?

I see this as potentially the best issue for free market advocates, if a radical seized the issue (Giuliani made a comment in one debate that what we have in healthcare isn't insurance, but I don't know if he's a radical.) 70 years of statist and free market arguments can be boiled down to this single issue and enough voters care about it to pay attention. I'd argue that the entire domestic agenda should be healthcare for two reasons. One, because it will take a long time to explain the issue fully. Two, the implications of the argument reflect on other major issues like education, entitlements, and energy policy. i.e. the argument is for markets, and healthcare is the ground the right should choose to fight on.

It doesn't appear as though healthcare is a priority on the right, however, because I mainly hear why universal care won't work, not why a free market system is better. Every Republican candidate is offering throwaway lines or minor reforms like HSAs that leave the system intact.

wafranklin writes:

All the reports I have seen show we have paid dearly (highest costs per year per person worldwide) in the US for quite a while and finally, under the guidance of Mr. Magic Market gotten to somewhere around 37th of all countries on relevant criteria for judging same good. Now, I understand that some of the Market Magicians (some of them are VooDooDooists) will turn that in some convoluted manner into propaganda to tell us that the magnificant medical cartels which have materialized with the support of rightists government are are our friends and things are just the other way round. Looks into my eyes,...

We have Mr. Magic Market and all his fans and bands, and the bastard has not worked in health care. As for technolgies: most came from the usually derided government and were picked up by corporations to make money, never thinking to reimburse the voters who paid for all this.

The greatest advances in health care came at the turn of the last century with the proliferation, at the behest of the Public Health (ohmigod, Gummint again) Service as it spread the word that (1) one must put the crapper away from the spring or well and down by the hogs, and (2) screen wire keep the flies from the dinner table for the most part. This and other techniques took the average lifespan of 45 at that time to over 70 in 60-70 years.

Since 1940 a number of medicines and techniques have been developed to stop or mitigate acute or chronic illness. With the help of Mr. Magic Market, that idiocy continues while preventative medicine languishes (aint enough money in it for those high living drug reps, doctors and CEOs).

Watching the excuses of Mr. Market's friends, lies most often, is enough to gag a maggot. They ignore the facts, misconstrue and twist the same facts if possible, all aimed at an ideological model -- the market solves all. Not. Is it possible that a meaningful discussion can be had on the fact that the market has failed the taxpayer-voter-citizen and cossetted the wealthy and their toadies in management? Nope? Thought not. And, yes this is class warfare, just as should have been happening all along -- as Kevin Phillips said in "Wealth and Democracy", "We have had class warfare and the wealthy won."

Do we want corporate architects of the disasters of the past 20 years to now design a "new solution" for health care. I for one would like to take insurers and turn them into public utilities supporting a single payer universal health care system, which will piss off everyone but the customer, who is supreme, right?

Jay writes:

wafranklin: Shrilling like a true collectivist.

Where to start?

"As for technolgies: most came from the usually derided government and were picked up by corporations to make money, never thinking to reimburse the voters who paid for all this."

I would presume most can be defined as greater than 50%. You want to provide us with a link?

"All the reports I have seen show we have paid dearly (highest costs per year per person worldwide) in the US for quite a while and finally, under the guidance of Mr. Magic Market gotten to somewhere around 37th of all countries on relevant criteria for judging same good."

You do realize that our system is quite heavily socialized. Would you like to point us to the study where they exogenize the consequences of the coerced collectivization, like the $10k/yr/person that the state of New York's Medicare program doles out?

Go read a book on econometrics. Then you can come back and we'll have a worth while argument.

Punditus Maximus writes:

Okay, this is getting funny -- the folks who slavishly devote themselves to a theoretical health care model which has never been tried (for good reason) are telling the folks who want to implement a model which has been tremendously successful in every single other wealthy country but ours to familiarize themselves with empirics.

Jay, how about the number of Lasker Medical Research Awards which were given to researchers with public instead of private affiliations? This appears to put the total at 10:1 or so, though I could have missed one or two.

Steve J. writes:

The advantage of markets is that they foster innovation. They reward successful innovation. Moreover, they eliminate obsolete institutions and organizations.

Then why do we still have QWERTY keyboards?

jpe writes:
I see this as potentially the best issue for free market advocates, if a radical seized the issue

As a liberal, there's nothing I'd more to see than for laizze faire radicals to bum rush the stage. The biggest danger at present is that the GOP will push for lukewarm, triangulating health care structures (like the pharm benefit) which will stifle real progress on the issue.

Wilson writes:
The advantage of markets is that they foster innovation. They reward successful innovation. Moreover, they eliminate obsolete institutions and organizations.
Where are the successful innovations fostered by market forces in the health care industry? Instead of giving us economic theory that does not seem to model the real world, give us the facts about how the market has made the United States model for health care the best in the world. The statistics don't seem to follow your hollow arguments for allowing the market to prevail. Why are most of the European and Canadian health care systems rated higher than ours?
Joe Bingham writes:

Reminds me of the great section in MF's Capitalism and Freedom on the tendency to overlook/underestimate potential innovations as a cost because we can't imagine them, since they haven't been innovated.

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