Arnold Kling  

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Various pundits offer suggestions for controlling health care costs, hosted by the New York Times.

My proposal (health care vouchers) has zero chance of being enacted. You may not like it, anyway. The other pundits' proposals, even if they were enacted, have zero chance of having a real impact on health care costs.

If there were a real debate, with back-and-forth, I think that the empirical basis for some the other folks' ideas would be exposed as being on the flimsy side. For my proposal, there is the Rand Health Care Study, the only experimental data in health care finance.


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The author at Health Care BS in a related article titled Really Wanna Control Health Care Costs? writes:
    Arnold Kling says the answer is health care vouchers. He and several other experts, some of whom don’t seem to know much about economics (health care or otherwise), provide their ideas to the NYT. Kling explains his as follows: The key to con... [Tracked on November 10, 2009 11:44 PM]
COMMENTS (9 to date)
Arnie writes:

Some of the other plans are in the "fifth grader thought they would work" category. That they are in the news as actual options is worth a cry.

You proposed a simple though sweeping change which actually puts power in the patient's hands and takes it away from everyone else. That is what the system needs.

David C writes:

Much of what Gail Wilensky wrote seemed very much in line with your arguments. Her approach is slightly different, and more politically realistic, but has the same goal of shifting costs from insurers to patients.

It's amazing how Leslie Greenwald identifies that a major problem is unnecessary care, but the idea that people will reduce consumption of something if you just make them pay for it instead of handing it out for free never seems to occur to her.

The first two pundits suggested standardizing forms to simplify administration, and Jacob Hacker even had a study on hand to back up that argument. Unfortunately, he linked to the summary rather than the study itself. Luckily, Google is always there. I found the actual study in under 2 minutes:
http://content.healthaffairs.org/cgi/content/full/24/6/1629

Congrats on the publication, Arnold. Did the NY Times specify a word limit? Jacob Hacker's piece was more than 800 words, while yours was less than 300! In these cases "less is more" often applies.

Patrick writes:

It occurs to me that health care finance is a little like dating. Bear with me here.

People will do just about anything to evade responsibility for escalating a relationship. Human courtship rituals serve an overwhelming need for plausible deniability. Serendipity is a key ingredient in the stories of our courtships (either exaggerated or made up entirely). In reality, people make choices and take the consequences, but in the mythology of dating things "happen" and "one thing leads to another." As with diplomacy, passive voice is the language of romance.

Nothing short of brutal, heavy-handed rationing can control health care costs. The problem with Kling's voucher plan is that it makes this explicit. It would make each of us ration our own care (maybe half of us could cope with that). But it would also force people to ration care for their family members. I think most people know, deep down, that this must be done, but, come hell or high water, they will not do this individually. Just as people hate to take responsibility for their choices in the mate market, people desperately need a way to ration care while pretending they aren't.

Governments fill this role. In Britain, NICE is the whipping boy. People rage at the bureaucrats so they don't have to feel guilty for not dialyzing their demented octogenarian grandparents.

Maybe private insurance companies could ration care if they had the backing of the government (e.g. approved guidelines and procedures which make it virtually impossible to win a lawsuit against a compliant insurer).

Maybe doctors could enforce the rationing. They can pretend nothing more can be done. . . . I think the Swiss system may be something like this, though I'm not sure.

It takes two executioners simultaneously turning two keys to start a lethal injection machine. That way no one person can be held directly responsible for killing another. We get to pretend the "state" did it.

Controlling costs means denying care. Denying care means killing, even if we do it softly. This is what collectivism in medicine is really about.

Mike Rulle writes:

What makes something "politically realistic"? It has become an increasingly poisonous term, unfortunately, even as it is a necessary concept.

In Castro's Cuba it is "politically unrealistic" to expect the government to allow you to eat a fish you caught.

It's like accepting the entrenchment of potentially illegitimate power.

Ari writes:

Arnold says "In the Senate bill, there is one provision that might indirectly promote this form of cost-sharing. That is the tax on high-cost employer-provided insurance plans, which might cause employers to shift toward plans with higher deductibles and higher co-payments."

That is, of course, unless the bill makes it illegal to offer an insurance plan with a higher deductible and/or higher co-payments.

Thomas Sewell writes:

Antos and Arnold's ideas here are the only ones that even begin to make any sense. I'm surpised they made it in. :)

I've unkindly summarized and responded to all of them at http://comeletusreasontogether.com/how-not-control-rising-health-care-costs .

Mr. Econotarian writes:

If one really cared about how to reduce medical costs, we need simply look at what our other OECD peer are doing.

They are paying doctors and nurses half as much, and not using drugs and other medical technologies under 3 years old.

How they achieve this is different by country (single payer in Canada, "negotiations" with doctors in France, etc.), but those are the end results.

Source:
"U.S. Health Care Spending: Comparison with Other OECD Countrie"
http://opencrs.com/document/RL34175/


Ryan writes:

"They are paying doctors and nurses half as much, and not using drugs and other medical technologies under 3 years old."

If we stopped using drugs and other medical technologies under 3 years old, where would the rest of the OECD get their cost-effectiveness data? Health care spending is largely a prisoner's dilemma. Western Europe gains by cheating (relying on Americans to subsidize their care), but when we eventually follow suit, we all end up worse.

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