Excellent take from Krugman on health care
Ailing Health Care
By PAUL KRUGMAN
Those of us who accuse the administration of inventing a Social Security crisis are often accused, in return, of do-nothingism, of refusing to face up to the nation's problems. I plead not guilty: America does face a real crisis - but it's in health care, not Social Security.
Well-informed business executives agree. A recent survey of chief financial officers at major corporations found that 65 percent regard immediate action on health care costs as "very important." Only 31 percent said the same about Social Security reform.
...
Rising health care spending isn't primarily the result of medical price inflation. It's primarily a response to innovation: the range of things that medicine can do keeps increasing. For example, Medicare recently started paying for implanted cardiac devices in many patients with heart trouble, now that research has shown them to be highly effective. This is good news, not bad.
So what's the problem? Why not welcome medical progress, and consider its costs money well spent? There are three answers.
First, America's traditional private health insurance system, in which workers get coverage through their employers, is unraveling. The Kaiser Family Foundation estimates that in 2004 there were at least five million fewer jobs with health insurance than in 2001. And health care costs have become a major burden on those businesses that continue to provide insurance coverage: General Motors now spends about $1,500 on health care for every car it produces.
Second, rising Medicare spending may be a sign of progress, but it still must be paid for - and right now few politicians are willing to talk about the tax increases that will be needed if the program is to make medical advances available to all older Americans.
Finally, the U.S. health care system is wildly inefficient. Americans tend to believe that we have the best health care system in the world. (I've encountered members of the journalistic elite who flatly refuse to believe that France ranks much better on most measures of health care quality than the United States.) But it isn't true. We spend far more per person on health care than any other country - 75 percent more than Canada or France - yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.
This last point is, in a way, good news. In the long run, medical progress may force us to make a harsh choice: if we don't want to become a society in which the rich get life-saving medical treatment and the rest of us don't, we'll have to pay much higher taxes. The vast waste in our current system means, however, that effective reform could both improve quality and cut costs, postponing the day of reckoning.
To get effective reform, however, we'll need to shed some preconceptions - in particular, the ideologically driven belief that government is always the problem and market competition is always the solution.
The fact is that in health care, the private sector is often bloated and bureaucratic, while some government agencies - notably the Veterans Administration system - are lean and efficient. In health care, competition and personal choice can and do lead to higher costs and lower quality. The United States has the most privatized, competitive health system in the advanced world; it also has by far the highest costs, and close to the worst results.
Over the next few weeks I'll back up these assertions, and talk about what a workable health care reform might look like, if we can get ideology out of the way.
By PAUL KRUGMAN
Those of us who accuse the administration of inventing a Social Security crisis are often accused, in return, of do-nothingism, of refusing to face up to the nation's problems. I plead not guilty: America does face a real crisis - but it's in health care, not Social Security.
Well-informed business executives agree. A recent survey of chief financial officers at major corporations found that 65 percent regard immediate action on health care costs as "very important." Only 31 percent said the same about Social Security reform.
...
Rising health care spending isn't primarily the result of medical price inflation. It's primarily a response to innovation: the range of things that medicine can do keeps increasing. For example, Medicare recently started paying for implanted cardiac devices in many patients with heart trouble, now that research has shown them to be highly effective. This is good news, not bad.
So what's the problem? Why not welcome medical progress, and consider its costs money well spent? There are three answers.
First, America's traditional private health insurance system, in which workers get coverage through their employers, is unraveling. The Kaiser Family Foundation estimates that in 2004 there were at least five million fewer jobs with health insurance than in 2001. And health care costs have become a major burden on those businesses that continue to provide insurance coverage: General Motors now spends about $1,500 on health care for every car it produces.
Second, rising Medicare spending may be a sign of progress, but it still must be paid for - and right now few politicians are willing to talk about the tax increases that will be needed if the program is to make medical advances available to all older Americans.
Finally, the U.S. health care system is wildly inefficient. Americans tend to believe that we have the best health care system in the world. (I've encountered members of the journalistic elite who flatly refuse to believe that France ranks much better on most measures of health care quality than the United States.) But it isn't true. We spend far more per person on health care than any other country - 75 percent more than Canada or France - yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.
This last point is, in a way, good news. In the long run, medical progress may force us to make a harsh choice: if we don't want to become a society in which the rich get life-saving medical treatment and the rest of us don't, we'll have to pay much higher taxes. The vast waste in our current system means, however, that effective reform could both improve quality and cut costs, postponing the day of reckoning.
To get effective reform, however, we'll need to shed some preconceptions - in particular, the ideologically driven belief that government is always the problem and market competition is always the solution.
The fact is that in health care, the private sector is often bloated and bureaucratic, while some government agencies - notably the Veterans Administration system - are lean and efficient. In health care, competition and personal choice can and do lead to higher costs and lower quality. The United States has the most privatized, competitive health system in the advanced world; it also has by far the highest costs, and close to the worst results.
Over the next few weeks I'll back up these assertions, and talk about what a workable health care reform might look like, if we can get ideology out of the way.
posted by Matthew at 11:25 AM
2 Comments:
I agree this is an excellent take from Krugman on health care. Health insurance is a major aspect to many lives.
We spend far more per person on health care than any other country - 75 percent more than Canada or France - yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.
That's a meaningless comparison since healthcare isn't rationed in the US. So therefore we get whichever healthcare we are willing to pay for, up to and including a billion dollar plastic surgery sector.
Also, the life expectancy is a very difficult to compare actually since the demographics are so different. And one final fisk, US tracks infant mortality differently than everyone else. We track deaths from every birth, the EU and Canada only track viable births.
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