Topic: Government and Politics

Nader Supports Health Savings Accounts?

In a recent article Ralph Nader attacks several critics of Obama’s health care reform proposal, including Cato:

Now enters the well-insured libertarian Cato Institute with full-page ads in the Washington Post and The New York Times charging Obama with pursuing government-run health care. A picture of Uncle Sam pointing under the headline “Your New Doctor.” Nonsense. The well-insured people at Cato should know better than to declare that this “government takeover” would “reduce health care quality.”

I agree that Cato employees are “well-insured” – a description so appropriate that Nader used it twice in a single paragraph. At Cato we have Health Savings Accounts, which are probably the closest thing to free market health insurance allowed by law.

It’s nice to see Nader, a proponent of socialized medicine, praise HSAs. But it’s unfortunate that his preferred options for health care would abolish HSAs entirely.

Brainstorming for (Your) Dollars

The Wall Street Journal reports [$]:

President Barack Obama’s health-care plan is in jeopardy because of serious concerns that costs will spin out of control. As much as anyone, it’s White House budget director Peter Orszag’s job to save it…

After his TV appearances, he went straight to the Senate Finance Committee, where he spent three hours with committee aides brainstorming about how to pay for the trillion-dollar legislation. At one point, they flipped through the tax code, looking for ideas.

Note, of course, that finding new sources of tax revenue doesn’t do anything about cost concerns. But for those “fiscal conservatives” who worry more about the deficit than about the government ending up with all our money, new revenue to match new spending may alleviate their concerns. (By the way, this WSJ article also has interesting vignettes about Orszag’s encounters with libertarian writer Virginia Postrel and my former colleague Andrew Biggs.)

For a review of some of the ideas Orszag and his friends have found as they flipped through the tax code — such a charming metaphor for the reality of the ruling class looking for opportunities to extract more of the money we earn — click here.

The Price of Universal Coverage Just Went Up

Since at least February, President Obama and other elders of the Church of Universal Coverage have labored to create the impression that universal coverage is inevitable, because a sense of inevitability reduces its cost.  If interest groups think this train is leaving the station, they are less likely to stand in its way.  Lobbyists are more likely to cut whatever deal they can if their clients believe, “It could have been much worse.”  That’s why Obama has demanded haste: the longer the process, the harder it is to maintain a sense of inevitability.

Here’s a sampling of today’s health care headlines from the non-partisan Bulletin News, which summarizes news media coverage:

  • Senate, Obama Back Off Healthcare Reform August Deadline.
  • Obama Rakes In Cash For DNC, Criticizes Media Coverage Of Healthcare Debate.
  • Obama’s Performance At Wednesday’s Press Conference Comes Under Fire.
  • President’s Media Strategy Raises Eyebrows.
  • House Democrats Consider Sidestepping Committee.
  • Democratic Caucus Holds “Contentious” Meeting.
  • Black Caucus Blasts Blue Dogs; AARP, Unions Also Criticize Group.
  • Freshmen Senators Ask Baucus To Hold Costs Down, Praise His Efforts.
  • More Criticism Of Obama.

Now that reform seems less inevitable, interest groups will be less likely to settle for a bad deal.  Instead, they will be more likely to demand higher payoffs than before, because their clients believe the expected cost of alienating Church elders has moved away from “getting punished” and toward “the status quo ante.”

So, good luck paying for this thing.

Wrong, Wrong, Wrong, Wrong, WRONG!!

The Pittsburgh Tribune-Review quotes Republican National Committee chairman Michael Steele on how Congress should go about reforming health care:

Having Congress reshape health care puts “the wrong people at the table,” Steele said. He said stakeholders — “doctors, lawyers, health care employees, insurance companies” — should develop a solution and present it to Congress, rather than the other way around.

Steele needs to brush up on his Adam Smith:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Like I said, Jonathan Chait was on to something.

Timeless Wisdom from Walter Williams

Back in the 1980s, the irreplaceable Walter Williams produced a documentary based on one of his more controversial books, The State Against Blacks. Someone has done a great service and posted the documentary on youtube. Everything Walter said back then is true today - and just as applicable. The only discordant note is that when Walter refers to “welfare reform,” it is important to understand that he is talking about the expansion of handouts and centralization in the 1960s and 1970s, not the pro-market welfare reform of the 1990s:

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.

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.”