Arnold Kling  

The Forked Tongue Speaks

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There is a disconnect in the Obama administration's rhetoric on health care. On the one hand, the administration points out that our current health care financing system, particularly for government-funded programs, is unsustainable. This suggests an urgent need for major reform.
On the other hand, the administration is quick to reassure Americans that they will be able to keep the same insurance and maintain the same relationships that they have with their doctors now. As individuals, most Americans are happy with the status quo, and the Obama administration does not want to appear to threaten their satisfaction.
In an essay on hope without change, I cite specific quotes from President Obama that illustrate this forked-tongue approach on health care.

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COMMENTS (8 to date)
Walt French writes:

You really should not let your current image, with the arched eyebrows and grin, appear next to "The Forked Tongue Speaks."

But after recovering from that surprise, I still don't get your complaint. It's ... well, subject to multiple interpretations by different readers. Do you believe that since "most Americans are happy,"America should ignore the minority who are suffering from bad care, and set aside the American spirit that we can do better? Why not say so as a killer rejoinder to Obama's efforts?

Or do you believe that health market inefficiencies (which many attribute to oligarchic concentration leading to incomplete markets, while others refer to warped institutional incentives) really do have the huge costs that most economists attribute to same, so it's a shame that Obama doesn't address more forcefully how badly Americans fare despite all our resources going to "health care?"

Any comment on Arrow's 1963 paper on health care? He is, after all, perhaps *the* most respected economist on issues of market equilibria and the difficulty of representing individuals' interests in markets with collective agents, such as is almost exclusively the case in the US today.

Or are you showing that you're politically savvier than Obama in moving the Nation on an issue where his predecessors have failed badly? And that you previously attacked Cheney's blithe promises of Iraqi oil paying for our little War? Although that would be intellectually consistent, I can't recall any posts from years ago on that score. Are you really complaining that ALL marketing of public policy plays up the good points and minimizes the negatives?

I'm sure you've staked out a position or two, but could you them to this post?

Dan Weber writes:
Do you believe that since "most Americans are happy,"America should ignore the minority who are suffering from bad care, and set aside the American spirit that we can do better?
I think Arnold is right; most people do like their current health care. They are worried about losing it, and they might not be thrilled about its cost, and they may be worried about about the costs going up so much that they hate it. But, as is, they like it, for the time being.

I definitely think it is possible for the government to do all three of 1) satisfy the people that enjoy their current health care 2) improve the health of those not covered at the moment, and 3) reduce costs.

But it's also possible to screw all three of those goals simultaneously.

Les writes:

A previous comment stated: "I definitely think it is possible for the government to do all three of 1) satisfy the people that enjoy their current health care 2) improve the health of those not covered at the moment, and 3) reduce costs."

I do not see how this is possible.

If government will "satisfy the people that enjoy their current health care" then how can costs of their current health care be reduced?

If government will "improve the health of those not covered at the moment" then how can the related cost be negative?

And, if neither #1 nor #2 can reduce costs, then how can #3 be true?

Dan Weber writes:

There are pieces of the American health care system that function much better than other parts. The Mayo Clinic, for example, or the VHA. They operate at a significant discount and do not compromise on patient health or satisfaction.

The Federal government could (notice the word) set up one or two new corporations operating under those models, capitalize them and start them off and then sell them off. These new institutions, combined with whatever the private market has done to increase/duplicate the Mayo Clinic model, would change the way we pay for health care, giving good results at lower prices.

I doubt Congress would take such steps, however.


The Economist http://www.economist.com/opinion/displaystory.cfm?story_id=13900898 has a feature article about health care reform.

Les writes:

I think that the revised claim that:

"The Federal government could (notice the word) set up one or two new corporations operating under those models, capitalize them and start them off and then sell them off. These new institutions, combined with whatever the private market has done to increase/duplicate the Mayo Clinic model, would change the way we pay for health care, giving good results at lower prices.

I doubt Congress would take such steps, however."

is a considerable and wise strategic retreat from:

"I definitely think it is possible for the government to do all three of 1) satisfy the people that enjoy their current health care 2) improve the health of those not covered at the moment, and 3) reduce costs."

but the reduced version still rests upon the most questionable assumption that government could or should or would be able to replicate the Mayo Clinic, its cost structure and its renowned quality of care, and then sell it off without loss.

But, even if that most questionable assumption is accepted, why not just let the private sector replicate the Mayo Clinic? What extra benefit does replication by government bring to the table?

Dan Weber writes:

I made no "retreat." I won't insult the other commenters by diagramming sentences. Please refrain from attempting to deconstruct other people.

why not just let the private sector replicate the Mayo Clinic?
You may not have noticed, but government has decided that this is a Problem, and that Something must be done. The government is going to do Something, even if it is the wrong thing. You can hope that government does Nothing, but you will then be absent from the debate about what the Something is.

Now, the government already provides (roughly) half the health care in this country. Whatever model Medicare and Medicaid have, the rest of the industry tends to follow them, which is why most health care in this country is dispensed according to pay-per-procedure, which encourages doctors to do and test more, even if it's not to the health of the patient.

(Incentives matter. It's something an economist said once.)

However, if the government were to change its compensation model, things could improve significantly. If Washington DC were composed of fiscal conservatives I might suggest that the $600 Billion currently going towards Medicare and Medicaid instead be changed into vouchers that people could use to buy memberships in privately-run institutions. However, that is unlikely to pass muster with our current Congress (since insurance companies are evil, you see), so a more palatable plan to them would be for the government to instead fund a model that the rest of the private market can again replicate.

There is a lot of lock-in in the current health care system, since so much of the system is built around employer-provided insurance, because that form of compensation has huge tax advantages. One immediate step is to end that subsidy, so that individuals are more free to shop for their own insurance.

C writes:

In reply to Dan: "there are pieces of the American health care system that function much better than other parts. The Mayo Clinic, for example, or the VHA."

The Mayo clinic is better because it's one of the best. Sort of like comparing the Pittsburgh Steelers to a small town high-school football team and saying, 'Do it how they do it'. They have lots of paying patients, corporate funding, and research dollars that make their model possible (not to mention a rather homogeneous, educated, hard working local population to provide cost-effective staffing), and not much in the way of a local indigent population to consume resources.

The VA...Ha! I love that example. Most veterans that have access to other insurance would rather go anywhere than a VA. Apparently you've missed the recent headlines (you know, the whole HIV/HepC colonoscopies and improperly performed radiation treatments).

Something tells me you don't work in any sort of medical setting. Your opinion on medical care is about as valuable as the New Yorker article you read.

Thanks for offering up such insight though.

The Cupboard Is Bare writes:

Malpractice suits add to the problem and should be kept in mind when discussing ways to reduce costs.

The fear of lawsuits causes doctors to order more tests than might actually be necessary. Where I live, malpractice suits are so common that OB/GYN's are leaving the area and many radiological labs no longer do mammographies.

Reduce the number of lawsuits/defendants (not every doctor who ever laid eyes upon a patient should be included in a suit) and bring settlements/awards back in line with reality and you will go a long way towards reducing healthcare costs.

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