Tag: church of universal coverage

Another Fairly Insane Cross-National Health Care Comparison

Yesterday, countless newspapers published a really disappointing story by Noam Levey that the Los Angeles Times ran under this title:

Global push to guarantee health coverage leaves U.S. behind; China, Mexico and other countries far less affluent are working to provide medical insurance for all citizens. It’s viewed as an economic investment.

The article is little more than a puff piece for the hotly contested idea of universal coverage. It gives zero space to the competing strain of thought that the less the government does for the poor, the sick, and the vulnerable, the better off they will be.

It quotes “Dr. Julio Frenk, a former health minister in Mexico and dean of the Harvard School of Public Health” as saying, “As countries advance, they are realizing that creating universal healthcare systems is a necessity for long-term economic development.” A necessity? Gosh. It’s a wonder the United States ever became the world’s largest economy.

It speaks of such government guarantees as being popular, when what it really means to say is that people are dependent on the government for their health care and frightened to death that someone might take it away.

It laments the fact that the United States is an “outlier” because it fails to guarantee access to health care for all citizens, which “stands in stark contrast to America’s historic leadership in education…Long before most European countries, the United States ensured access to public schooling.” Yet it makes no mention of how U.S. students fare poorly in comparison to those in other advanced countries.

It devotes no time to the costs of such guarantees, other than to say that they are sometimes “more than twice what was expected.” But don’t worry, those costs are borne by the government. It does not say where governments get all that money. I guess we’ll never know.

Speaking of taxes, it makes no mention of how taxes suppress economic development. Evidently, unlike other taxes, those that support government-run health care systems do not incur the deadweight loss of taxation.

But the article was at its most ridiculous when it suggested that the health care sectors in poor countries like Rwanda and Ghana might possibly be ahead of the United States in any way whatsoever. As I have written about Rwanda:

The United States generates many of the HIV treatments currently fighting Rwanda’s AIDS epidemic, as well as other medical innovations saving lives there and around the world.  More than any other nation, we create the wealth that purchases those and other treatments for Rwandans and other impoverished peoples.  The United States is probably closer to providing universal access to medical care for its citizens — and, indeed, the whole world — than Rwanda.  Rwanda’s “universal” system leaves 8 percent of its population uninsured. Though official estimates put the U.S. uninsured rate at 15.4 percent, the actual percentage is lower; and again, uninsured Americans typically have better access to care than insured Rwandans.  The real paradox is here that Rwandan elites think the United States is doing something wrong.

Unfortunately, it’s not just the Rwandan elites. For my thoughts on how sensible people can make such insensible comparisons between the United States and other nations, read the rest of my post on Rwanda.

The Ethos of Universal Coverage

Associated Press photojournalist Noah Berger captured this thousand-word image near the Occupy Oakland demonstrations last month.

(AP Photo/Noah Berger)

Many Cato @ Liberty readers will get it immediately. They can stop reading now.

For everyone else, this image perfectly illustrates the ethos of what I call the Church of Universal Coverage.

Like everyone who supports a government guarantee of access to medical care, the genius who left this graffiti on Kaiser Permanente’s offices probably thought he was signaling how important other human beings are to him. He wants them to get health care after all. He was willing to expend resources to transmit that signal: a few dollars for a can of spray paint (assuming he didn’t steal it) plus his time. He probably even felt good about himself afterward.

Unfortunately, the money and time this genius spent vandalizing other people’s property are resources that could have gone toward, say, buying him health insurance. Or providing a flu shot to a senior citizen. This genius has also forced Kaiser Permanente to divert resources away from healing the sick. Kaiser now has to spend money on a pressure washer and whatever else one uses to remove graffiti from those surfaces (e.g., water, labor).

The broader Church of Universal Coverage spends resources campaigning for a government guarantee of access to medical care. Those resources likewise could have been used to purchase medical care for, say, the poor. The Church’s efforts impel opponents of such a guarantee to spend resources fighting it. For the most part, though, they encourage interest groups to expend resources to bend that guarantee toward their own selfish ends. The taxes required to effectuate that (warped) guarantee reduce economic productivity both among those whose taxes enable, and those who receive, the resulting government transfers.

In the end, that very government guarantee ends up leaving people with less purchasing power and undermining the market’s ability to discover cost-saving innovations that bring better health care within the reach of the needy. That’s to say nothing of the rights that the Church of Universal Coverage tramples along the way: yours, mine, Kaiser Permanente’s, the Catholic Church’s

I see no moral distinction between the Church of Universal Coverage and this genius. Both spend time and money to undermine other people’s rights as well as their own stated goal of “health care for everybody.”

Of course, it is always possible that, as with their foot soldier in Oakland, the Church’s efforts are as much about making a statement and feeling better about themselves as anything else.

ObamaCare Supporters Are Over-Interpreting Oregon Medicaid Study

Columbia Business School economist Ray Fisman has a piece at Slate.com discussing the first-year results of the Oregon Health Insurance Experiment.  In brief, when Oregon transferred an average of $3,000 from taxpayers to poor people in the form of Medicaid coverage, it did those poor people some good.

Fisman’s interpretation of the results is different from mine in mainly two respects.  First, I describe the one-year benefits of Medicaid coverage as modest; he says they’re “enormous.”

A more fundamental difference concerns whether expanding Medicaid was a cost-effective use of the taxpayers’ money.  Fisman writes:

Given the added expense, did the Medicaid expansion prove to be cost-effective? That is, did the treatment group actually have better health outcomes?

That’s not what cost-effectiveness means.  For Medicaid to be cost-effective, it must (A) produce benefits and (B) do so at the same or a lower cost than the alternatives.

The OHIE establishes only that there are some (modest) benefits to expanding Medicaid (to poor people) (after one year).  It tells us next to nothing about the costs of producing those benefits, which include not just the transfers from taxpayers but also any behavioral changes on the part of Medicaid enrollees, such as reductions in work effort or asset accumulation induced by this means-tested program.  Nor does it tell us anything about the costs and benefits of alternative policies.

Just as some opponents of ObamaCare over-interpreted previous Medicaid studies, Fisman and other ObamaCare supporters are over-interpreting the OHIE.

Oregon Health Insurance Experiment: No Vindication of ObamaCare

The Oregon Health Insurance Experiment is the first experiment since the dawn of time that randomly assigns some households to receive health insurance (Medicaid) for purposes of comparing their medical consumption, health outcomes, and financial security to similar households that do not receive Medicaid coverage.  Some of the nation’s top health economists have released the first batch of results from the OHIE.

At National Review (Online), I summarize the OHIE’s first-year results and offer the following analysis:

Supporters of President Obama’s health-care law may tout these benefits, but the OHIE does not provide the vindication they seek. First, despite being eligible for Medicaid, 13 percent of the control group had private health insurance — suggesting that on some dimension, Medicaid’s eligibility rules are already too broad.

Second, the OHIE extended coverage to the most vulnerable population of uninsured Americans, yet the improvements in health and financial security are so far apparently modest. At higher income levels, where individuals have greater baseline access to health insurance and medical care, the benefits of expanding coverage are likely to be smaller and the costs (to the extent that crowd-out is higher at higher income levels) will be greater.

Third, supporters must show not only that expanding coverage improves health but also that it does so at a lower cost to taxpayers than alternative policies. Health economists generally agree that discrete programs promoting highly effective treatments (for hypertension, diabetes, etc.) could produce health gains as large as expanding health insurance would, but at far less expense. Reducing taxes could plausibly reduce financial strain to a similar degree by expanding job creation.

Finally, the OHIE illuminates an unflattering feature of the push for Obamacare. For a century, the Left has advocated universal health insurance despite not knowing what benefits it might bring. In 2010, Congress and President Obama vastly expanded Medicaid without waiting for the results of the one study that might tell them what taxpayers would get in return for their half a trillion dollars. As the law’s supporters seek to cajole doctors into practicing evidence-based medicine, it is no small irony that they themselves dove head-first into evidence-free policymaking.

To the Church of Universal Coverage, the benefits of universal coverage, whatever those might be, are an article of faith.

‘Democrats Guess Wrong on Health Care’

That’s the headline of an article posted this week in Politico:

Rarely have so many political strategists been so wrong about something so big.

But when it comes to the health care bill, everyone from former President Bill Clinton on down whiffed on some of the more significant predictions.

Democrats would run aggressively on the legislation? Nope. Voters would forget about the sausage-making aspects of the legislative process? Doesn’t seem that way, as the process contributed to the sense that the bill was deeply flawed.

And Clinton’s own promise to jittery Democrats that their poll numbers would skyrocket after the bill finally passed also didn’t pan out, as the party is fighting for its life in the midterms.

What can explain the miscalculation?  Maybe religious fervor?

Rwanda and the Psychic Benefits of Universal Coverage

Last week, The New York Times published an article subtitled, “In Desperately Poor Rwanda, Most Have Health Insurance.”  The main theme was the contrast between Rwanda’s compulsory health insurance system and the as-yet-non-compulsory U.S. health insurance market:

Rwanda has had national health insurance for 11 years now; 92 percent of the nation is covered, and the premiums are $2 a year.

Sunny Ntayomba, an editorial writer for The New Times, a newspaper based in the capital, Kigali, is aware of the paradox: his nation, one of the world’s poorest, insures more of its citizens than the world’s richest does.

He met an American college student passing through last year, and found it “absurd, ridiculous, that I have health insurance and she didn’t,” he said, adding: “And if she got sick, her parents might go bankrupt. The saddest thing was the way she shrugged her shoulders and just hoped not to fall sick.”

I don’t see anything absurd here, but I do see something remarkable. Rwanda is so poor, its per capita income is about 1 percent that of the United States ($370 vs. $39,000).  Its health care sector is an international charity case: “total health expenditures in Rwanda come to about $307 million a year, and about 53 percent of that comes from foreign donors, the largest of which is the United States.”  That’s roughly $32 per person per year, which doesn’t buy much.  Dialysis is “generally unavailable.”  As are many treatments for cancer, strokes, and heart attacks, making those ailments “death sentences” more often than in advanced nations.  Life expectancy at birth is 58 years, compared to 78 years in the United States.  Rwandan children are 15 times more likely to die before their first birthday (7 vs. 107 deaths per 1,000 live births) and 25 times more likely to die before turning five (8 vs. 196 deaths per 1,000 live births) than U.S.-born children.  (If you want to meet some Rwandan kids struggling to make it to age 5, read my friend’s blog, Life of a Thousand Hills.)  And yet, the saddest thing is a healthy-but-uninsured American college student.

What the Times sees as a paradox isn’t really a paradox.  Yes, the poorer nation has a higher levels of health insurance coverage.  But the wealthier nation does a better job of providing medical care to everyone, insured and uninsured alike. The Times reports that Rwanda’s national health insurance system isn’t fancy, “But it covers the basics,” including “the most common causes of death — diarrhea, pneumonia, malaria, malnutrition, infected cuts.”  Surely, the Times must know that anyone walking into any U.S. emergency room with any of those conditions would be treated, regardless of insurance status or ability to pay.  The same is true of other acute conditions, like heart attacks and strokes, for which uninsured Americans receive better treatment than insured Rwandans.  True, some uninsured Americans end up filing for bankruptcy, but let’s be clear: while bankruptcy is no day at the beach, suffering bankruptcy because you got the treatment is better than suffering death because you didn’t.  (As for dialysis, the United States already has universal coverage for end-stage renal disease through the Medicare program.)  The Healthcare Economist puts it this way: “Would you rather be sick in the United States without insurance or sick with insurance in Rwanda?”  You get the point.  If there’s a paradox here, it’s that insurance status does not necessarily correlate with access to medical care: uninsured people in the wealthy nation actually have better access to care than insured people in the poor nation.

An even bigger paradox, though, is Rwandan attitudes toward the United States. The United States generates many of the HIV treatments currently fighting Rwanda’s AIDS epidemic, as well as other medical innovations saving lives there and around the world.  More than any other nation, we create the wealth that purchases those and other treatments for Rwandans and other impoverished peoples.  The United States is probably closer to providing universal access to medical care for its citizens – and, indeed, the whole world – than Rwanda.  Rwanda’s “universal” system leaves 8 percent of its population uninsured. Though official estimates put the U.S. uninsured rate at 15.4 percent, the actual percentage is lower; and again, uninsured Americans typically have better access to care than insured Rwandans.  The real paradox is here that Rwandan elites think the United States is doing something wrong. Why?

Here’s one answer: Rwanda’s government explicitly guarantees health insurance to its citizens, and for some people that guarantee has value apart from any health improvements or financial security that may result.  Dr. Agnes Binagwaho, “permanent secretary of Rwanda’s Ministry of Health,” illustrates:

Still, Dr. Binagwaho said, Rwanda can offer the United States one lesson about health insurance: “Solidarity — you cannot feel happy as a society if you don’t organize yourself so that people won’t die of poverty.”

Set aside that a (permanent) third-world bureaucrat is telling the United States how to keep people from dying of poverty.  Binagwaho cannot feel happy without that government-issued guarantee.

How might such a guarantee increase happiness? It could make people happier by reassuring them that they themselves will be healthier and more financially secure (self-interest), or that others will be (altruism).  Yet altruism and self-interest probably cannot explain the “happiness benefits” that people enjoy when governments guarantee health insurance.  As I have argued elsewhere, the jury is out on whether broad health insurance expansions like ObamaCare result in better overall health; they may, but it is entirely possible that they would not.  The jury is also out on whether ObamaCare will produce a net increase in financial security.  It will subsidize millions of low-income Americans, but it will also saddle them with high implicit taxes that could trap millions of them in poverty.  Meanwhile, ObamaCare’s new taxes will reduce economic growth and destroy jobs.  If such a guarantee doesn’t improve health or financial security, it’s not worth much in terms of altruism or self-interest.

But there’s another potential “happiness benefit” that might accrue to supporters of a government guarantee of health insurance: it could make them happier by allowing them to signal something about themselves – e.g., that they are compassionate.  If people use a government guarantee of health insurance in this way, that could explain why Rwandan elites feel bad for uninsured Americans.  They may feel empathy for uninsured Americans because they perceive the American electorate has not sent uninsured Americans a valuable signal (“We care about you!”).  Meanwhile, the act of expressing pity for uninsured Americans allows Rwandan elites to signal something about themselves (“We are compassionate!”).  Robin Hanson has a lot to say about why people might use health insurance and medical care to signal loyalty and compassion.

My hunch is that this is an under-appreciated reason why some people support universal coverage: a government guarantee of health insurance coverage provides its supporters psychic benefits – even if it does not improve health or financial security, and maybe even if both health and financial security suffer.

If that’s the case, then we’re facing the same problem that Charles Murray identified in Losing Ground, his seminal work on poverty:

Most of us want to help. It makes us feel bad to think of neglected children and rat-infested slums…The tax checks we write buy us, for relatively little money and no effort at all, a quieted conscience. The more we pay, the more certain we can be that we have done our part, and it is essential that we feel that way regardless of what we accomplish…

To this extent, the barrier to radical reform of social policy is not the pain it would cause the intended beneficiaries of the present system, but the pain it would cause the donors. The real contest about the direction of social policy is not between people who want to cut budgets and people who want to help. When reforms finally do occur, they will happen not because stingy people have won, but because generous people have stopped kidding themselves.

One thing is for certain.  When Rwandan elites pity uninsured Americans, there is something very interesting going on.

While I’m at it, the health-policy advice I offered to China and India also applies to Rwanda:

Does not the fact that “these countries lack the fiscal resources required for universal coverage because of their…low average wages” suggest that many residents have more pressing needs than health insurance? For things that might just deliver greater health improvements? In a profession where universal coverage is a religion, such questions are heresy, I know.

China and India are in the process of a slow climb out of poverty. It is entirely possible that the best thing those governments could do to improve [health care] markets and population health would be to enforce contracts, punish torts, contain contagion, and nothing else.

Of course, if Rwandan elites support universal coverage largely because they want to signal something about themselves, this advice may fall on deaf ears.

Yglesias, Defending Klein’s Slander of Lieberman

Blogger Matthew Yglesias has a response to my post on Ezra Klein’s slander that Sen. Joe Lieberman (I-CT) is okay with the mass murder (or the mass negligent homicide) of hundreds of thousands of uninsured Americans.

Yglesias claims that only one of the three studies I cited speaks to what he claims is the central point: the Institute of Medicine’s estimate of how many Americans die each year because they lack health insurance.  Yglesias is incorrect.  The central point/threshold question is whether giving the uninsured health insurance will save lives.  All three studies speak to that point, and all three all cast doubt on the intuitively appealing idea that giving uninsured people health insurance ipso facto saves lives.

To rebut the one study that Yglesias believes to be on point (Kronick), he offers two others.  Yet all studies are not created equal.  Kronick, Finkelstein/McKnight, and Levy/Meltzer represent the most reliable work that has been done on the relationship between health insurance and health.  If I am wrong about that, I hope that one of those authors or another expert in the field will correct me.

But if I am right, it means that Yglesias and Klein are slandering Joe Lieberman and millions of others based on their (Yglesias’ and Klein’s) limited and distorted understanding of the world.  (And even if I’m wrong, the Washington Post’s Charles Lane explains why Klein’s slander is still wrong.)

Then again, considering that Yglesias also has another post suggesting that Lieberman and House Minority Whip Eric Cantor (R-Va.) are “dumb” Jews free-riding on the intelligence of other Jews, I’m not sure that the Church of Universal Coverage is open to persuasion right now.