From a reader at NRO, via instapundit.com:
http://corner.nationalreview.com/post/?q=YzMxMzY3NDUxMTAxN2RhNDkyOGI4NzgwNmQ0YTk1NTU=
Can we debate this point? Is the NRO reader correct? Can a government takeover of health care fix the economy? I think not, but I’m open to other points of view.
I don’t think you guys will ever get universal health care.
I don’t see how it will ever be sold at this point.
I had the hunch for several years that it is our health care costs that are making the US less competitive, and that the costs are making many companies to think twice into setting shop in the US. I also thought that upstarts and small business (that are a big part of the economy) also have a serious disadvantage against big business as they usually can not attract good talent when they can not offer good benefits as health care is usually more expensive.
Recently the Council on Foreign Relations came with a report that gives evidence to that hunch.
Since when is health care reform the same as nationalizing health care? Hell, even the text in the link waffles between nationalizing and getting health care costs under control. It’s perfectly possible to do the latter without moving to UHC, and it’s also possible to do the former without accomplishing the latter.
Although I personally think UHC is a wonderful goal, and also believe that if it is done correctly, can save money, I’ve always understood that Obama just wants to help reduce the burden on taxpayers, and ensure that all children are covered. That’s not UHC.
Since that waffling makes me a bit unsure what the debate is really about, I’ll try and go down both paths.
Would an immediate implementation of UHC get us out of the recession? I highly doubt it. I’m pretty sure that it’s going to be a bit tough at first, while we iron shit out, and I can’t see it being implemented in anywhere near the necessary time frame for it to have an effect.
Would reducing the health care costs of most Americans help get us out of the recession? Probably, just as other measures that leave more money in everyone’s pocket would.
Well, I have noticed that also small business and people that want to start business are beginning to realize that we do have a very raw deal with health care nowadays.
But something else has entered the picture, now also big companies are beginning to realize (car companies) that the costs are suffocating them, and this is happening even when health care companies do give a nice discount to large companies.
I think change will happen now as even the powerful are starting to notice that the current system is irrational.
No, I don’t think nationalizing the healthcare system would fix the economy, but I don’t think anyone is seriously proposing that anyway. However I do believe that UHC can be accomplished through some variety of single-payer system and that doing so would have positive economic benefits in the long term.
But the premise of the quoted statement is flawed. The fact that countries with UHC are being affected by the current economic crisis tells us little or nothing about the value of their respective healthcare systems. With the USA being such a significant part of the global economy, it is hardly surprising that many smaller countries are being hurt by our meltdown. And it can at least be said that the meltdown didn’t originate in any of those European countries with their dreaded universal healthcare systems.
It should also be pointed out that UHC isn’t supposed to be some kind of insurance against economic crisis. The argument is that our current system is broken and is actively hurting our economy as it is now.
We need to overhaul the laws (tort especially) surrounding medical care before we think about UHC. Something also needs to be done about the ever-growing Federal bureaucracy, because you can be damn sure that implementing UHC using the existing bureaucratic format will just result in even greater amounts of bloated waste and corruption. I’m personally not sold on the idea of UHC as it’s been brought up in various forms by different proposals so far, but I’m not against the concept in general. Maybe in the future, when our country is prospering once again…
But, reforming health care (not implementing UHC) to be more streamlined and cost efficient will absolutely help us out of this economic mess. It’s all about easing people’s fears about spending money, and if you can even just reduce the costs of the current system, it would have widespread effects. I’m no econ expert, but it seems straightforward that a meaningful reduction in health care costs (even if it doesn’t create additional coverage at first) would lift such a big burden off of so many people and companies that it will make people less afraid to spend, and companies more willing to hire.
I say the Gov’t needs to set a cost-target (as % of GDP) for health care, and go from there and evaluate what can be done to streamline the system to get as close to the cost-target as possible. Let’s say…10% of GDP? Or am I just not being realistic?
Of all these figures and percentages…how much was actually paid to a doctor or hospital, IOW, an actual health care provider, and how much to an insurance company or other “Health Care Plan Administrator?”
Excellent point.
It’s extremely simplistic to just point and say, “Europe’s also experiencing economic distress, so universal health care won’t help.” How about any sort of comparison of the size, scope and nature of the governmental responses?
Here’s Paul Krugman with a somewhat more thoughtful and nuanced, although still brief, take on the situation:
Bolding is of course mine.
So, UHC appears to be part of a buffering process in Europe, offset by a latency to take other appropriate action to address the economic situation.
What Krugman is missing is that the US bailout has a huge spillover effect in Europe. For example, half the AIG bailout money is ending up in Europe. With the interconnected financial system we have, especially at the big boy level, the US is bailing out the whole world, but only the US taxpayer is going to get the bill.
In a way the same thing happens in health care. All the costs of advances in medicine are passed on to the US consumer. Not that some of it is not self-inflicted pain. We in the US alone allow marketing of prescription drugs, so that not only do we get to pay high prices for drugs, new and old, we get to pay for the marketing of those drugs too.
Okay, but I’m not sure that Krugman is missing that, or if that’s relevant to the issue of the effect of health care coverage systems on the current economic recovery.
Okay - so we pay for the extreme oversaturation of pharmaceutical marketing and the low amount of actual R&D going on. Still not seeing the relevance to the question of health care coverage systems on the economic recovery.
It is difficult to compare because there are many sources of income for doctors, especially in the US. But the commonly accepted figure is that relative to other professions doctors in the US earn twice as much as in countries with a GDP per capita in the same order of magnitude. Nurses are paid a little better in the US, but not much more. There was a study that showed that of the OECD countries, only in the US did a nurse earn more on average than a teacher. But it is even more difficult to compare, because there are various types of “nurses”, some of which may not be considered nurses in other countries.
Anecdotally, among my 19 cousins, are doctors in the US (2), Canada (2), Australia (2) and Pakistan (1). Just looking at their standard of living, the doctors in the United States are wildly more wealthy compared with the average person than in Canada or Australia. The Canadian and Australian doctors have something better than a middle class income. The American ones can have their kids do Origami with $100 bills.
The American makes much more than twice the income, though the salary is less than double. The American doctor makes most of his income from his partnership interest in his “employer”, which includes several labs and a pharmacy. This is a much bigger problem to me than his income. He is motivated to prescribe tests and drugs, because he is making money off that too.
The relevance is that not only are we subsidizing economic stimulus in Europe, but also their health care safety net.
The “low” amount of actual R&D going on is only going on because there are profits to be had from the results. The profits are to be had only in the US. The oversaturation of marketing enables the profits. I am not saying it is a good thing, but let’s be hones about what is happening. I am making up these numbers.
Pharma spends $10b on research to develop and test 100 new drugs.
Pharma spends $50b on marketing new drugs to consumers in US
Pharma makes $75b (before R&D and Marketing costs) on new drugs in US market (over life of drug, before it goes generic)
Pharma makes $1b in rest of the world on the new drugs, because or price controls. Basically eveyone else requires them to either sell the drug at a penny over the marginal cost or production and distribution or they remove the drug from the formulary.
Obviously the pharmas believe they would make less than $25b without the marketing, or they wouldn’t spend the $50 to get the $75. But the fundamental underlying issue is that if there wasn’t the potential to get at least $10b in profits on a $10b spend in R&D you wouldn’t have the R&D at all. You might have government funded basic research but not drug and thereapy development. But no country would fund this except the stupid US with their stupid private half-assed regulated market.
In the short run, the US should be better off if we went to a single-payer system or an insurance system that is so regulated it might as well be. Except for the few million jobs lost in the useless overhead. So there is no appetite for this either. So the only plan that wouldn’t undercut the stimulus and gets you to universal coverage and more secure coverage builds on the existing system and its horrible overhead costs.
If we had a Canadian or European system, in the long run the US would have lower costs, driven by drastically lower admin costs, lower marketing costs, and lower incomes for doctors and drug companies.
Everyone in the whole world will have fewer new drugs and therapies, possibly drastically fewer. People in the US will have a better social safety net, because they will at least not have to worry about losing their health insurance when they lose their jobs. Personally, I think it is a net positive. But there will be winners and losers, and for most people there will be some pluses and minuses. Denying that there is any downside is just not honest.
And quite frankly given that the US government is going to be heavily involved, who know how badly they could bugger it up.
Do you have any actual facts to back up any of that, TheMightyAtlas? I cannot speak for the rest of Europe, but while Britain’s NHS definitely has issues with paying full price for drugs due to a limited budget and some treatments being unproven or not being cost-effective, it will do so if necessary. And we have appeals processes too.
Lots of info here.
I looked at the NICE website, but I can’t figure out from there how they actually work, when the rubber hits the road.
Here is a recent article from the New York Times. It looks like there is a continuing tension between approving new and expensive drugs. So the governement can force the drug companies to reduce their prices or accept a much smaller share of the market. Basically NICE substitutes it judgement (including cost) for the doctors’, right?
http://www.nytimes.com/2008/12/03/health/03nice.html?pagewanted=1
There really is no way around it. If people want the best possible drugs, and are willing to have the insurers pay ANYTHING that the drug companies want to charge, costs are going to spiral out of control.
This is a huge source of difference between the U.S. markeet and those around the world. People in the US see it as their right to buy as much healthcare as they want when they want and how they want. Even in Europe’s wealthier countries, you don’t get that except with the tiny elite… who often flies to America for top-quality treatments. Americans demand more tests, more visits, and at their convenience.
You could try to nationalize American healthcare, but that’s going to be a disaster waiting to happen. People won’t stand for rationing of care, and since the current legal requirements are grossly gummed up (about which more below).
That doesn’t mean I like the current system. Running insurance through employers really botches up the system to a grotesque degree. It forces them to have whole bureaucracies to deal with just that, raises costs overall, hides the cost from employees, makes them cavalier about consuming healthcare, and makes it harder for people in different jobs to afford it.
I favor a complete overhaul, where medical practice would be broken slightly (with more “lesser” licensing for practical, everyday medicine, to ease the burden on full doctors), where healthcare would be more priviatized, with a legal “minimum” of care requirements that companies must offer to anyone if they want to stay in the business, and where the government sets aside funds to buy new drug patents for the public good.
But I really don’t want the government to ever be in the position of telling me what care I can get, and if they pay for it, they have that power. Nobody else has a right to tell me what to do with my body.
Fareed Zakaria made a similar point in an article in Newsweek last month: Worthwhile Canadian Initiative:
Will nationalized health care save the economy?
Of course it will. And that’s not even counting the great savings through electronic medical records and preventative care. Everyone knows if you eliminate paper records in favor of computerized ones and order lots and lots more tests, the savings will more than cover the cost of ensuring everybody.
And because everyone will be more healthy, there’ll be tons more money to spend on disposable goods.
This is such a no-brainer, I’ve no idea why it’s in Great Debates.
The idea that the US subsidises healthcare in other countries needs to be tempered against the fact that the US is a net importer of medical staff.
This costs other countries a uge amount in training costs, only to have them leave. It’s a knock on effect, UK staff go to the(along with staff from other nations) US, so the UK ends up imprting staff from less well off nations, and so it goes.
The costs of training are huge, but the US ends up with the finished article, with the training and the years of experience, without having to bear the full costs.
Maybe the US should pay those burdens, certainly there would be a moral argument for those medical staff arriving from nations where such skills are desperately needed, which would of course exclude Europe, indeed the latter also ought to look at compensating poorer nations for drawing in skilled medical practitioners.