Monday, December 21, 2009
In the long list of silly things that even smart liberals do and say, citing tiny little countries as somehow instructive in the health care policy debate is among the most tedious. Saying something worked in the Netherlands or Switzerland is simply meaningless in our own national discussion. It is exactly like saying that some program works in Minnesota so it will also work in Texas and California and Michigan. Indeed, as Ezra will tell you, there are large parts of the United States, including Minnesota, where we deliver high quality health care at costs that are indeed comparable to the small European countries that progressives say have better systems than the United States taken as a whole. Well, let's adopt the Minnesota system of health care! Oh, wait...
The huge size and diversity of the United States drive a lot of our incremental costs in health care; if we were a small country with a relatively homogeneous population 100% of which lived within a short distance of every doctor in the land, we would spend a much smaller percentage of our GDP on health care even with the "wasteful" system that we have. You'll never hear it from a liberal, but in health care diversity costs money. A lot.
This reminds me of Milton Friedman's response to those who said that Scandinavian countries had a lower poverty rate than the US. Friedman replied that in the US, descendants of Scandinavian immigrants also had a poverty rate lower than the rest of the US.
Perhaps it is time to bring back a golden oldie from the Timbro Institute in Sweden: Europe vs. USA.
Given that the wealthiest EU countries have reduced tax burdens relative to the US, eased employment laws and sought to improve the environment for innovation over the last several years, I bet Timbro would be writing a more nuanced, if not completely different, conclusion today than in the linked paper.
The WSJ captures perfectly the economic headwinds facing the US over the next several years in today's editorial.
This bill, regardless of the diversity of our poor country, will cause increased misery to the many.
Why would any young person want to go to medical school in ObamaLand. You'd make more as a school teacher -- after adjusting for opportunity cost, debt and future higher income taxes -- and have your summers off.
Given our demographics, this is not a small problem.
"From the outset, the White House's core claim was that reform would reduce health costs for individuals and businesses, and they're sticking to that story. "Anyone who says otherwise simply hasn't read the bills," Mr. Obama said over the weekend. "
Who are you going to believe, me or your lying eyes.
Another data point is that IHC in Utah -- which is a fine company -- is held up as a national role model for health care insurance and health care delivery. It does many things that may be applicable to other states, but it has the advantage of operating in a state with a relatively homogenous population (albeit less so than a generation ago) along the Wasatch Front, and it is a population that refrains from smoking or drinking, for religious reasons.
There is a certain irony that the phenomenon of inherently higher operating costs in serving a diverse client base -- really, true in almost any business, but especially so in health care -- seems to escape the understanding of a group of people who would otherwise consider themselves to be the champions of "diversity."
Another data point, Richard Epstein says that the bill is unconstitutional on it's face due to the coercive national limits placed on individual health insurance returns on capital, not to mention the implicit requirement that the industry go bankrupt. Why bankrupt? Well, because in good years rebates are ordered if retained revenues after medical losses exceed a mandated limit of 10% while in bad years the companies are required to eat losses.
Outlawing profit means that there is an inevitability to their demise. It also means there is no way to differentiate between well run businesses and poorly run businesses. Good managers will go elsewhere, so our painful national nightmare should be short in duration. Of course, poor people will then have no healthcare at all but lefties don't seem to care.
Live in the Netherlands and we had someone from the US joining our legal team. He had twin babies, not in the best of health. He was appalled by the general dis-interest shown by Dutch doctors. Luckily it was nothing serious, or the twins could have enjoyed our health care waiting lists as well.