Arnold Kling  

Health Care: Obama, McCain, Hanson, and Utopia

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David Cutler, Brad DeLong, and Ann Marie Marciarille write,


One-third of medical costs go for services at best ineffective and at worst harmful. Fifty billion dollars will jump-start the long-overdue information revolution in health care to identify the best providers, treatments and patient management strategies.

It is amazing how rapidly Robin Hanson's view, that we consume too much health care, has gone from outlandish to mainstream. We're all Masonomists now.

The authors' main point is that the Obama health policy is better than McCain's. They write,


Sen. McCain, who constantly repeats his no-new-taxes promise on the campaign trail, proposes a big tax hike as the solution to our health-care crisis. His plan would raise taxes on workers who receive health benefits, with the idea of encouraging their employers to drop coverage.

They are referring to a proposal to end the tax deduction for employer-provided health benefits and replace it with an individual deduction. At least one of the authors was for this idea before he was against it. In his often-cited utopian health care plan, DeLong wrote,

No deduction for employer-paid health expenses.

It is not clear to me which candidate's plan would bring us closer to DeLong's utopia.


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The author at Gabriel Malor in a related article titled Why Obama’s Health Plan is a Disaster and Why His Flacks Need to Get Better Material writes:
    Brad DeLong and his wife have a piece in the Wall Street Journal today, “Why Obama’s Health Plan is Better“. It would more properly be titled “We Took the Healthcare Issues Page from Obama’s Website and Condensed it Into a... [Tracked on September 16, 2008 12:30 PM]
COMMENTS (5 to date)
Richard writes:

DeLong is not the only guy that has made a big to do about getting rid of the employer exemption and has since done a partisan about face, Jason Furman is the other one that comes to mind. Though, to be fair, I think DeLong and Furman's overriding goal is expanding coverage.

Paul Geddes writes:

I still don't understand how you can possibly know that we are consuming too much health care. I agree that we are hiding the full costs of treatment from health consumers but at the same time we are messing up incentives on the supply side too. You would easily laugh at any analyst who provided claims that we are consuming too many video games. Why are your tastes superior to someone who wants and is willing to pay for more health care (provided prices are corrected and now market prices)?

Bob writes:

Paul,

"Ineffective and possibly harmful" certainly implies too much. At least of the current bundle of goods and services.

Not that I support limiting healthcare consumption by concenting adults.

aaron writes:

Or you can look at the other side. Tax exempt means that people will consume a significant portion more healthcare than something of the same utility but taxed.

Jim Glass writes:
One-third of medical costs go for services at best ineffective and at worst harmful.

Fifty billion dollars will jump-start the long-overdue information revolution in health care to identify the best providers...

Regarding all that waste, I certainly agree it is there -- but a substantial part of it might derive from a simpler cause with a simpler solution than the DeLongs of this world with all their big spending plans want to consider.

To fix that we don't need an "information revolution", we need a revolution in the incentives politicians face.

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