I reviewed the articles which Mr. Cannon offers as references and have trouble connecting the articles to the point being made. There are also some logical inconsistencies.
Some of the confusion stems from the fact that I went on vacation two days before the piece ran, and the mobile phone reception in Zion Canyon is terrible. Thus USA Today had to cut my original oped by about 100 words without any help from me -- much to their irritation and that of a few Cato colleagues. Sorry, guys.
So here is my effort to shed some light on some of The Physician Executive's questions. In each case, I begin with the relevant part of my oped.
"The truth is, there are not 47 million U.S. residents who can't get health insurance. According to the Department of Health and Human Services, that [Current Population Survey] estimate 'appears to overstate the uninsured substantially compared to other surveys.' Those other recent surveys put the number between 19 million and 36 million."
The Physician Executive notes that the link provided by USA Today takes the reader to a document "which does not support Mr. Cannon’s statement." True enough, and a result of my being incommunicado. The oped should have linked to this study for the 19 million figure and this study (page 4) for the 36 million figure.
Obtaining the 19-million figure required applying the percentage without any coverage in 2001 as reported by the Survey of Income and Program Participation (6.8 percent of U.S. residents; see page 13 of the former study) to the Census Bureau's 2001 estimate of the U.S. population, contained here (page 58). Sadly, 2001 is the most recent SIPP estimate of the full-year uninsured that I could locate.
The Physician Executive did miss an error, though. My oped attributes that "appears to overstate" quote to HHS. My original draft attributed that quote to a study prepared for HHS, but the attribution was truncated.
"As many as 20% of the 'uninsured' are eligible for government health programs, so in effect they are insured."
Some of those counted among the 47 million "uninsured" are eligible for and enrolled in Medicaid, the mammoth government health program ostensibly for the poor. Other people counted as uninsured are eligible for Medicaid but not enrolled.
The non-partisan Congressional Budget Office notes that the former group -- those who are eligible and enrolled in Medicaid -- may account for 12-15 percent of the SIPP's estimates of the full-year "uninsured." My oped links to a study prepared for HHS that estimates that those who are eligible and enrolled in Medicaid account for 9 million of the 45 million people counted as "uninsured" by the CPS in 2003 (see page 3). That gets you to 20 percent, and we haven't yet counted the latter group -- those eligible for but not enrolled in Medicaid.
"[E]conomists Kate Bundorf . . . and Mark Pauly estimate that as many as 75% of the uninsured can afford to buy insurance."
The Physician Executive correctly notes that Bundorf and Pauly presented a range of estimates of the share of the uninsured that can afford coverage. The range was 31-76 percent. My original draft gave a range of one-quarter to three-quarters of the uninsured, but I was told to pick a single estimate for clarity's sake. I picked the larger, and represented it as an upper bound.
Those estimates were based on different definitions of affordability, which are of course inherently subjective. Nevertheless, I used this (apparently credible) estimate by two distinguished economists to support my claim that "there are not 47 million U.S. residents who can't get health insurance." I am not sure why The Physician Executive describes my use of that estimate as an "inexplicable peripatetic diversion." I looked up peripatetic, and I'm still not sure. Perhaps she would prefer an essay on this point. (USA Today would not.)
"[M]any economists can find no evidence that [simply expanding coverage] is a cost-effective way to improve health."
Here I linked to a working paper that The Physician Executive describes (in part) as "a non-peer reviewed piece of secondary literature." It is in fact an early draft of a chapter in this book, published by the left-leaning Urban Institute. (Both the working paper and the final product reach the same conclusion. I linked to the former so people could read the author's perspectives without purchasing the book.) That chapter concludes:
It is clear that expanding health insurance is not the only way to improve health…Policies could also be aimed at factors that may fundamentally contribute to poor health, such as poverty and low levels of education. There is no evidence at this time that money aimed at improving health would be better spent on expanding insurance coverage than on any of these other possibilities.
In other words, if your aim is to improve people's health, it is not clear that expanding health insurance coverage is the way to do it. (As far as I know, that claim is not controversial among economists.) Of course, if your aim is to pump more money into the health care sector, expanding coverage is the way to go.
"Simply expanding coverage would have little effect on the quality of care, health disparities, or how long we live, nor would it stop free-riders from shifting costs to others."
The Physician Executive raises questions about each of these claims. Here's more information about each:
- The "quality of care" link takes the reader to a well-respected study that observes: "We found that health insurance status was largely unrelatedto the quality of care among those with at least minimal accessto care. Although having insurance increases the ease of accessto the health care system, it is not sufficient to ensure appropriateuse of services or content of care. Indeed, within systems whereaccess to care is more equitable . . . substantial gaps between observedand optimal quality remain."
- The "health disparities" link refers to a study that observes: "Although increasing insurance coverage and access to care would most likely contribute to narrowing disparities . . . the available data suggest that the variation in health plan coverage . . . is small relative to the very large gradient in health outcomes. It is likely that expanding insurance coverage alone would still leave huge disparities in young and middle-aged adults."
- "How long we live" links to a New York Times article where the invaluable Gina Kolata writes that health economists find that health insurance "pale[s] in comparison" to education when it comes to extending longevity. Kolata quotes Rand Corporation health economist James Smith as saying that health insurance "is vastly overrated in the policy debate."
- "Free-riders from shifting costs to others" links to a study by two Urban Institute scholars who estimate that uninsured free-riders account for just 2.8 percent of health care spending. Moreover, 1.2 percent of health care spending is attributable to insured free-riders. Thus, despite there being precious little free-riding to begin with, expanding coverage to everyone still wouldn't eliminate it.
"[A]ccording to data from the Kaiser Family Foundation, that family spends $11,000 for its own employer-controlled coverage."
The Physician Executive is puzzled:
The Kaiser Family Foundation says that the average family of four spends $11,000 a year. Individuals are pegged at $4,000. What the average cost per employee is, I just don’t know. Using one number without the other is not an honest presentation of the problem and I may be a little dense here… what was the point? Health care is expensive? We know that.
Obviously, self-only coverage is cheaper and all coverage is expensive.
My point, however, was not about families versus individual workers, nor is it about how much health insurance actually costs. My point is about who controls the money. My initial draft read:
the average family of four will spend roughly $25,000 on health insurance this year: $14,000 in taxes to fund government programs for others; and $11,000 for its own employer-controlled coverage.
More than 200 million Americans have public or employer-controlled coverage, and all are essentially purchasing it with someone else’s money. And that’s the problem . . .
A substantial chunk of workers' earnings go to health care, but workers own and control essentially none of that money. We would have a far more efficient, accessible, and useful health care sector if they did.
Actually, the Kaiser Family Foundation today released an updated estimate of the average cost of employer-controlled family coverage: $12,106 (see page 24). So we might make the total $26,000. Or not. My point is qualitative, not quantitative.
Much of what we believe about the uninsured and expanding coverage is deeply ingrained, intuitively appealing, and wrong. You can't challenge that kind of conventional wisdom without getting some very educated and incredulous blowback.