Bryan Caplan  

Memory Boost

Selective Memory... A Sentence to Ponder...
Arnold writes:
I know I had another argument with Bryan this year where I had to concede to him, but right now I cannot remember the topic. Selective memory strikes again.
I'm happy to help out.  The history of the dispute:

1. Arnold quarreled with my elitism, saying:
On health care, the irrational public--the ones that want government to keep its hands off their Medicare--is helping to fight the Progressives who want to impose a health plan that is based on what I see as a failed model--the Massachusetts plan. In Bryan's ideal world, wouldn't our health care system be run by the wise technocrats of the Obama Administration?
2. I replied:
I've talked to plenty of left-wing economists about this topic.  On balance, their views are much more reasonable than the median non-economist's.  Yes, most economists probably favor universal coverage, and I don't.  But few economists want a government monopsony.  And they're on board for three major reforms that I support:

1. Denying care to people on Medicare and Medicaid when their treatment is expensive and the actuarially predicted benefit is small.

2. Substantially raising deductibles for people on Medicare and (maybe) Medicaid.

3. (Moderately) deregulating medical licensing to allow a greater role for doctor's assistants, nurse practitioners, etc.

In fact, since the typical economist's argument against means-testing Medicare is that it would undermine its popular support, I think that in this hypothetical scenario that I could convince the typical economist to accept a fourth wise reform:

4. Means-testing Medicare.
3. Arnold wasn't entirely convinced, but still concluded:

Maybe Bryan is right, and that the median economist's policies would be better than the status quo. I am not sure. Actually, I think a lot depends on how well the median economist learns from mistakes. If we can assume that the economist figures out that setting compensation policy in Washington is a bad idea, and so eventually gives up on that approach, then I become more optimistic about having the median economist be in charge of health care policy.

Bryan also could argue that even though the median economist would not adopt the policies that I favor, the median economist would be much more open to them than the median voter.

I think I have to give this round to Bryan.
This was one of the more productive exchanges I had in 2009, and a nice example of why I'm proud to co-blog with the noble Arnold.

Comments and Sharing

COMMENTS (3 to date)
NR writes:

"Yes, most economists probably favor universal coverage... But few economists want a government monopsony."

It will be a point underlined in print journalism's epitaph that the media has utterly failed to point this out through this entire debate.

Greg Ransom writes:

The deep fallacy here is the idea that economics triumphs over the ideology these Democrat economists learned as pimple faced students.

Ultimately what Reform will do is put health care in the hands of government union employee interest groups -- union pensions and job security will trump health care just as these trump education in the government schools, or how these trump sound budgeting in California when it comes to prison guards.

Ross writes:

It cost virtually zero dollars to house a jail inmate in Texas in 1960. Why? The inmates grew food, made clothing, and built things for sale. Texas school children ate nearly free lunches at public schools with inmate grown food. Liberals objected to trustee prisoners standing guard over other prisoners, and hence liberal reforms of the mid 60's were put in place. Today, it costs 30K to 50K per prisoner per year. Additionally, today's prison gang activity means the prisons are LESS safe and less likely to reform prisoners than in the past. As usual, the law of unintended consequence bites liberal theology right in the rear.

Liberal orthodoxy is equally crazy with regards to our current fix with medical care. Our friend Teddy Kennedy passed laws allowing "managed" care to come into being, where the Insurance industry was the first payer. Since that time, costs have skyrocketed. In other words, there is no self rationing as the service is perceived to be free by the medical care consumer. This is so obvious as to be gross, yet it is not mentioned in the debate. Also not mentioned is tort reform, as Doctors pay out egregious sums as extortion money to keep the lawyer shysters at bay.

In the 60's the typical medical consumer paid his costs out of pocket. If there was some extreme event, his catastrophic insurance kicked in. If the consumer was poor, then there were charity hospitals he could go to. Doctors tended to volunteer at the Charity hospitals, as they were not under threat with lawsuits. In the 60's (before the liberal reforms), Doctors often made housecalls. Doctors could afford to make housecalls, as they didn't have their wealth siphoned off with government and insurance mandates and regulations and shyster lawsuits.

Now we are going down the path of more regulation and mandates, when the real fix is self rationing and using competiton to hold down costs.

There is just no way that sending money up to an insurance bureaucrat, or a government bureaucrat, and then having them send it back down to the hospital or doctor is sane. That method insures that the system is inefficient. At best, the government or insurance (first payer) system will skim off 30 percent for their costs and profits. With regards to people who cannot afford coverage, then lets make it easy for Doctors to donate their time by altering the tax code, and preventing lawsuit costs.

I fear for America when the entire debate is one flavor of socialism as compared to another flavor of socialism.

Please America, socialism doesn't work. It has killed or enslaved millions. As Einstein said, the definition of insanity is trying the same thing over and over and expecting a different result. Other's have tried socialist medical care to bad effect, and somehow we think we can do it better or smarter?

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