I must be losing my touch. I’ve let nearly two months pass without responding to Ezra Klein’s defense of RomneyCare, ObamaCare, and other centrally planned health care systems. (For those who want to get up to speed: his original post, my reply, and his response.) So here goes.
Klein notes that he and I had each used flawed measures of RomneyCare’s impact on health insurance premiums in Massachusetts. Fair enough. But Klein ignores the study I cited by John Cogan, Glenn Hubbard, and Dan Kessler, which estimates that RomneyCare increased premiums in Massachusetts by 6 percent. The CHK study has limitations, but it is the best estimate available. I hope Klein addresses it.
Klein’s fallback position is that even if RomneyCare increases premiums, that’s not an indictment of the law because cost‐control was not one of its goals. Never mind that Mitt Romney boasted, “the costs of health care will be reduced.” Klein knows political rhetoric when he sees it. Yet he oddly sees no parallels between the phony‐baloney promises of cost‐control used to sell RomneyCare and the phony‐baloney promises of cost‐control used to sell ObamaCare — despite ample assistance from people like Medicare’s chief actuary and Alain Enthoven (“the American people are being deceived”).
Then Klein throws down his trump card:
[E]ven a cursory read of the evidence would show that whatever the drawbacks of central planning, it covers people at an extremely low cost. Romney Care’s cost problem is a result of pasting a coverage‐oriented quick fix atop our insane health‐care system. Compare its costs to the British system, the French system, the German system, or any other system, and whatever your conclusions, you won’t walk away unimpressed by the ability of centralized systems to cover whole populations for much less money than we spend.
Oy, where to begin? First, Klein violates Cannon’s First Rule of Economic Literacy: he writes that centrally planned systems cost less, when what he means is that they spend less.
Second, the phrase “whatever the drawbacks of central planning” is some serious hand‐waving. Those “drawbacks” include (among other things): the Medicare program’s suppression of comparative‐effectiveness research, error‐reduction efforts, care coordination, and other delivery innovations; Canada’s human‐rights violating Medicare system; and the suppression of untold innovations in health insurance and medical treatment by government price controls. Other than a few drawbacks, Mrs. Lincoln…