Arnold Kling  

Together with Michele Bachmann

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Democracy in America, 2011... Job Satisfaction and Biblical ...

You will find me with her in the latest dead-tree issue of National Review. The cover story is on her surge in the Republican race for President. The author raises questions about her ability to execute a successful national campaign. My instinct is that her relatively short political resume will work against her, because it will remind people of Barack Obama's short resume before he ran for President, causing a visceral nervousness among voters. But I do not earn my living making political prognostications.

After that article comes a piece that I wrote predicting a two-tier health care system. The editors entitled the article "Haves and Have Mores."

I deliberately wrote the piece in a way not to pander to conservatives. I would have written essentially the same article for a liberal magazine, although in that case I would have been particuarly careful not to pander to liberals.

One way to state the logic of the piece is this.

1. Currently, government programs for health care involve open-ended commitments to reimburse doctors for whatever services they deem appropriate. This is too expensive (although you can see why key constituencies would find it popular).

2. The government needs to get control of its health care budget. It is likely to do this by reducing its reimbursement for discretionary health care services, such as diagnostic screening, futile late-stage care, and other procedures that have been found to have high costs and low benefits.

3. Regardless of how government draws the line between necessary procedures and discretionary procedures, it will not allow people to be deprived of necessary procedures for lack of money. Nor will it prevent people who can afford discretionary services from obtaining them using their own resources.

4. Hence, we will see a two-tier system. Necessary procedures will be available to all (which is pretty much true today, through the proverbial emergency room). Beyond that, wealthier people will be able to purchase more costly discretionary medical services, just as they can purchase fancier cars or more expensive food.

I am curious to see the reception to the piece. On one hand, the phrase "Blinding Glimpse of the Obvious" comes to mind. On the other hand, I think it will bother some people, particularly those on either the right or the left who want to believe that health care policy is a simple matter.


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COMMENTS (12 to date)
mtraven writes:

Right, the reason people would vote against Bachmann is that she reminds them too much of Obama.

It is indeed a good thing you don't make your living doing political prognostication.

Thucydides writes:

It cannot be assumed that a high quality medical care system will continue to be available when government cuts back on its reimbursements. There is some indication that in places like the UK, where there is a national health service (NHS), as well as private insurance, that the practices of the NHS set the standard for private coverage. For example, in the UK they generally do not treat prostate cancer by prostatectomy, which is an expensive operation, but by radiation or hormone therapy. The latter are generally much less effective.

Separately, futile late stage care is not always that easy to identify. If an intervention succeeds, an elderly person may enjoy years of additional life. If he dies, it was futile.

steve writes:

I think what you wrote describes the near term. However, I doubt it will be a stable system. One intervention begets another. I am not sure exactly what it will be. But soon enough the medical care being received by the "rich" will come under attack as unfair.

Kendall writes:

Thucydides,
My dad was told by his doctors that radiation treatment was just as effective as his other options, are you claiming the doctors were misinformed?

Mercer writes:

The above description sounds right to me. I think the big battle of the future will be about moving Medicare into the lower tier.

James A Donald writes:
"Necessary procedures will be available to all"
If we look at actually existent government health care systems, urgent and expensive necessary procedures are available only the the well connected.

One of the more common urgent, necessary, and expensive procedures is surgery for retinal detachment. The surgery has to be done immediately, or else you will go blind in that eye. Around the world, people who get this surgery on the government tab, generally have to wait a couple of weeks, which much the same as not doing it at all.

Similarly, in most of the world, if you are waiting for free government dentistry for a toothache, the wait typically takes about four years, by which time no tooth remains.

In most of the world, treatment for toothache, and treatment for retinal detachment, are indeed "available to all" but only after such very great delays, that they might as well not be. "Necessary treatments" are theoretically available for all, but in practice urgent, expensive, and necessary treatments seldom are.

Becky Hargrove writes:

Healthcare practitioners now have an opportunity to take healthcare to the streets, the second tier could be their willingness to teach those who make a pact to heal outside the bounds of money. Should people in healthcare be willing to lead the way in this endeavor, perhaps the economy of the 21st century will not be so dire, and healthcare as we know it does not have to come to a grinding halt.

chipotle writes:

Arnold, what do you think of Laurence Kotlikoff's "Purple Healthplan"?

Tracy W writes:

Prediction, based on NZ. Government will direct money to treat the concerns of politically powerful groups, eg the elderly, rather than at what is necessary. For examples, campaigning NZ politicians keep promising more money for hip operations, and breast cancer survivors have got politicians to fund drugs that slightly reduce the chance of recurrence. Treasury officials think that at least some of that money would be far better spent treating glue ear amongst low-income children. But if you're the parent of 4 small kids managing on $400 a week you don't have much time or energy for lobbying.

Seth writes:

Just curious Arnold, would you have written anything differently if you were to pander to conservatives?

Mike Rulle writes:

Health Care is complex because we made it complex, hence the politics to unwind it is virtually insurmountable. One can only chop away at it in incremental pieces. But it is clearly not inherently complex, no more than any other industry or service is complex. The genius of any solution will be a set of policies that persuades people we need to unwind the current system as it stands almost completely--- sooner rather than later. Emphasis on "persuades" and "unwind". Imagine, as Friedman once said, we started our food industry this way? WWII companies happened to find a health care tax loophole to beat price controls. The rest is history.

Imagine the amount of investment capital freed up if we had a normal free market health care system? I am one who is persuaded by the progress made in cosmetic and sight improving technologies as evidence of this----both outside the health care "system".

I am not overly optimistic, as most of the population does not understand "the pencil theory" of economics. The medical professsion also is heavily laden with snake oil remedies, something we refuse to believe---even as overall it is pretty good at certain illnesses. When something as mundane as Ryan's mini-chip at the system can be called radical, it is difficult to feel optimistic.

Still, every little bit helps.

Arnold Kling writes:

Seth,
If I wanted to write a piece on health care that pandered to conservatives, I would try to emphasize the ways in which conservative policies will lead to a better health care system than liberal policies. Instead, the article discusses the similarity of what the endpoint might look like.

If anything, I might have bent over backward not to point out what I see as the advantages of choosing a market-oriented approach.

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