Archives: 07/2009

The Productivity Challenge: Is Health Care as Bad as Education?

Catherine Rampell, editor of the NYTimes Economix blog, has kindly relayed my challenge to her readers: “name a field with a productivity collapse worse than that in education.”

Ms. Rampell, like several Cato@Liberty readers, suggests health care as a possible “winner.” I haven’t yet spent enough time with the data to be absolutely sure one way or the other, but so far I have to disagree.

It’s true that health care costs have risen dramatically over the past 40 years. The CDC has a great digest of health statistics that puts per capita health care spending at $356 in 1970 and $7,026 in 2006 (table 124). Adjusting the earlier figure for inflation it comes to $1,851, meaning that per capita health spending has gone up by a factor of 3.6. Public school spending per pupil has gone up by about 2.3 times from 1969-70 to 2005-06. But while educational outcomes at the end of high school are stagnant and the graduation rate has declined, we’ve enjoyed incredible medical advances. After spending an hour or two with Google and the CDC stats book, here’s what I find:

  • Neonatal mortality was cut by 2/3 between 1970 and 2005, from 20 to 6.87 per 1,000 births
  • Fetal mortality rate (miscarriage) was cut by more than half: from 14 in 1970 down to 6.2 in 2003 (per 1,000 live births plus fetal deaths)
  • Life expectancy at birth was raised by 7 years
  • Limitation of activity caused by chronic conditions: 13.3 % in 1997, 11.6% in 2006
  • There’s now a nearly 90% cure rate for a childhood leukemia
  • Depression is far more treatable
  • Fertility treatments are greatly advanced
  • Prosthetics are dramatically better
  • Lasik eye surgery was invented
  • Gastric bypass surgery is now available for the morbidly obese
  • Joint replacements are far more common and effective
  • Reconstructive surgery is greatly advanced
  • We now have vaccines for rubella, pneumonia, hepatitis A and B, chicken pox, lyme disease, and meningitis
  • Smallpox was eradicated
  • Numerous technological advances have made diagnostic and surgical procedures less painful and easier to recover from, including: arthroscopy, laparoscopy, MRIs, CTs, SPECT and PET scans

It’s also important to consider that Americans have chosen to lead lives that seem more likely to engender health problems over the past four decades. Though we’ve cut down on smoking, which should make us healthier, Americans today are both less physically active and more gluttonous. Not surprisingly, obesity has more than doubled, rising from 14.6 to 34.1 percent of the population. You’d think that heart disease would have gone off the charts as a result, but it’s actually been more than cut in half, from 493 to 211 deaths per 100,000, thanks, presumably, to medical advances that have more than compensated for our couchpotatofication. [And lest anyone assume that students have become harder to teach over the past 40 years, the evidence seems to point in the opposite direction.]

So far at least, the evidence doesn’t seem to support the notion that the health care sector has suffered a productivity collapse quite like education. It still looks as though schooling, and only schooling, has gotten both worse and substantially more expensive since 1970.


Yesterday, I was invited to testify on Capitol Hill. The subject was the Overcriminalization of Conduct & Overfederalization of Criminal Law. Long overdue subject for Congress to address. 

My fellow witnesses included former Attorney General Richard Thornburgh, as well as two victims of federal bullying – Kathy Norris (relating what happened to her husband) and Krister Evertson. Their stories are vivid reminders of how the legal deck is presently stacked against us all. That is, when an innocent person sits down in a quiet room to assess his options following a federal arrest and indictment, you soon learn that you’ll be broken financially if you choose to fight and go to trial. The pressure to plead guilty – even if you are innocent – is enormous.   If we had a small and sensible criminal code where the rules were clear and objective, the costs of defending yourself from bogus (or trumped up) charges would be sharply reduced.  My testimony can be found here.

Prof. Stephen Saltzburg made the case against mandatory minimum sentencing and Prof. James Strazzella made the case against the Overfederalization of Criminal Law. All in all a good hearing.

And, while I’m at it,  here’s a terrific piece that appeared in the Washington Post this week. For additional Cato scholarship, go here and here.

Obama’s Press Conference: Rush to Judgment

At the Politico I write:

It’s easy to find, as Gallup just did, that majorities of the public want everything – guaranteed health insurance, that covers all possible problems, that lets you choose your own doctor and the treatments you need, that lets you keep your current plan – and they want it cheap. Or they’re OK with letting someone else pay. So when President Obama promises health care that does all those things, he can find a receptive audience. Still, when you ask people whether they really believe the federal government can provide more health care to more people, and save money in the process, most of them don’t. And that’s the problem Obama faces. And the reason he’s so insistent on doing it NOW is that he fears that the longer people mull that conundrum, the more they will realize the unlikelihood of a vast new federal program bringing down the cost of anything.

Obama also said that his administration “inherited an enormous deficit….have not reduced it as much as we need to and we would like to.” That’s a half-truth at best. The Bush administration and the Republican Congress spent like drunken sailors. But driving the deficit into the stratosphere is Obama’s decision. If he thought the deficit was too high, he didn’t have to push a $787 billion stimulus bill and a $3.6 trillion budget. If he thinks the effects of the stimulus are worth the enormous, unprecedented, unimagined deficits, then let him stand up and say so instead of pretending that he’s been trying to “reduce it.”

Help Spread the Word about Health Care Reform

As part of Cato’s campaign to promote the right kind of health care reform, we’ve created a special banner for – and hope you’ll take an opportunity to use the image to spread the word about Cato’s research on health care reform to friends, blogs, other Web sites, and more. The embed code is provided for your convenience….so, just click and share!

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Ad Campaign for Real Health Care Reform

Check your local paper today for Cato’s full-page ad about a better health care reform solution: “freedom. Freedom to choose your doctor and health plan. Freedom to spend your health care dollars as you choose. Freedom to make your own medical decisions. Freedom to keep a health plan you are satisfied with.”

It’s running today in the New York Times, the Washington Post, the Washington Times, the Chicago Tribune, and the Los Angeles Times.

Or find the ad here, along with radio ads as well. These ads aren’t cheap, so please consider making a contribution to support Cato’s health care reform efforts.

Yet Another Reason to Slow Down Health Reform

In support of his health plan, President Obama yesterday repeated one of his favorite alarmist claims:

If we don’t act, 14,000 Americans will continue to lose their health insurance every single day.

Really?  Does the president mean to suggest that number of uninsured Americans (estimated to be 46 million) would double in nine years, and employment-based health insurance would vanish – without anything to replace it – within 32 years?

Or is the president not giving us the whole truth?

Taxpayer-Funded Lobbying

There’s lots of outrage in the blogosphere over revelations that some of the biggest recipients of the federal government’s $700 billion TARP bailout have been spending money on lobbyists. Good point. It’s bad enough to have our tax money taken and given to banks whose mistakes should have caused them to fail. It’s adding insult to injury when they use our money – or some “other” money; money is fungible – to lobby our representatives in Congress, perhaps for even more money.

Get taxpayers’ money, hire lobbyists, get more taxpayers’ money. Nice work if you can get it.

But the outrage about the banks’ lobbying is a bit late. As far back as 1985, Cato published a book, Destroying Democracy: How Government Funds Partisan Politics, that exposed how billions of taxpayers’ dollars were used to subsidize organizations with a political agenda, mostly groups that lobbied and organized for bigger government and more spending. The book led off with this quotation from Thomas Jefferson’s Virginia Statute of Religious Liberty: “To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.”

The book noted that the National Council of Senior Citizens had received more than $150 million in taxpayers’ money in four years. A more recent report estimated that AARP had received over a billion dollars in taxpayer funding. Both groups, of course, lobby incessantly for more spending on Social Security and Medicare. The Heritage Foundation reported in 1995, “Each year, the American taxpayers provide more than $39 billion in grants to organizations which may use the money to advance their political agendas.”

In 1999 Peter Samuel and Randal O’Toole found that EPA was a major funder of groups lobbying for “smart growth.” So these groups were pushing a policy agenda on the federal government, but the government itself was paying the groups to lobby it.

Taxpayers shouldn’t be forced to pay for the very lobbying that seeks to suck more dollars out of the taxpayers. But then, taxpayers shouldn’t be forced to subsidize banks, car companies, senior citizen groups, environmentalist lobbies, labor unions, or other private organizations in the first place.