Health Care and Individual Mandates

In this post on Hillary Clinton’s proposed health care plan commenter Grewgills had comments that require rather extensive answers (and I did write a lengthy reply, unfortunately when I tried to post it, the operation timed out eating the comment). Anyhow, this post is to provide some additional commentary and a response to Grewgills as to why I don’t like Clinton’s health car prosposal.

Like Ronald Bailey mentioned in the linked article I think individual mandates could be part of a reform of health care that could make health care more consumer driven. My biggest problem with Senator Clinton’s plan is that it doesn’t do this. Senator Clinton’s plan will force employers to provide health care for employees and for those firms that can’t do this due to cost constraints Clinton’s plan will offer subsidies. People will also have the option of enrolling in the same health care plan members of Congress have access to or Medicare.1

The problem here is that this restricts choice for consumers, and when you restrict choice it usually goes along with reducing consumer welfare. Imagine going to the movies and you have only three movies: a comedy, and action movie, and a documentary; vs. going to the movies and having 6 choices: a comedy, a horror movie, an action movie, a documentary, a romance, and a second comedy. In which situation do you think you’ll be more likely to find the movie that you’d prefer?

Employer plans are limited in choice, they are ultimately paid for by the employees (or in the case of the subsidized plans the tax payers–which means consumers) and they are usually selected to benefit the company. Thus, if health care costs go up, then your wages might not grow as fast, wages could even stagnate or in some instances decline. And for the subsidized plans your tax bill would go up. So to the extent that these kinds of policies induce over-consumption it actually would add to the problem not decrease it.

Why would employer provided health care result in over-consumption? The tax deferred nature of benefits. Suppose your tax rate is 20% and your health care costs $1,0002. Now if you were paid that $1,000 and then required by law to purchase an insurance policy you’d have only $800 with which to go buy insurance. Under the current employer-provided system you’d be allowed to purchase a $1,000 policy. Hence you’d be more likely to consume health care resources especially since this tax deferred status would also provide an incentive to move more and more things under “health insurance” such as pregnancy care, child delivery, eye glasses and other low cost and common health events. This would allow the employee to consume a larger amount of resources while at the same time avoiding taxes. Or more simply your glasses are now paid for via tax deferred dollars. To the extent that this effect is on-going you’d see upward pressure on the prices for health care resources, all other factors being held constant.

One solution to the above problem is to make the tax benefit of health benefits symmetrical. That is tax the benefits as income, or if a person opts to take the cash and go buy health insurance of some sort that expenditure is treated as a tax credit. Thus, people are now indifferent to where they get their health care benefits provided that equivalent policies are available both through the employer and in the market place.3

Another part of Clinton’s plan that I don’t like is the vague rhetoric about using the coercive power of the State to secure price discounts for pharmaceuticals. While this might sound like a good idea, it sounds too much like price controls or government expropriation of profits. The effect of these two things would amount to pretty much the same outcome over a long enough period of time: fewer new drugs. Basically under either scheme the rate of return on the investment a drug company would make would be reduced. As such, drug companies would curtail their investments and hence fewer drugs.

While one could argue that private insurance firms can do something similar they lack the coercive power of the government. Insurance companies do not have paramilitary units that they can send into terrify your work force, arrest your managers and executives, seize your records, or even freeze bank accounts and enforce asset forfeitures. Thus I find such comparisons rather inapt.

Another point to consider: just about every country out there has a problem with its health care spending. Canada, England, France, Germany, etc. All of them are looking at serious fiscal issues in the not too distant future. And one of the things many of these countries are doing to address this looming fiscal problem is to…limit access to health care. Sure in theory access is free and available to everyone. The reality in places like Canada and England is that you’ll likely end up on a waiting list and wait weeks maybe months depending on what sort of treatment you need. This kind of thing distorts statistics on health care costs since most governmental statistics deal only with dollar costs and not the costs of having to put up with a painful medical condition that limits your life and reduces your welfare for four months while you wait for treatment.4

One comment in particular from Grewgills is one I hear often and always sets my teeth grinding,

It is true that any comparisons will be obscured by other factors. Every other Western industrialized nation has managed to implement universal care and pays considerably less for care and gets measurably better results than we do.

While this maybe true, it isn’t immediately obvious from the official statistics industrialized nations produce. Take infant mortality for example. In the U.S. any birth where the fetus shows signs of life at the time of birth is considered a live birth. This isn’t the case in other countries:

  • In Austria and Germany, fetal weight must be at least 500 grams (1 pound) to count as a live birth
  • in other parts of Europe, such as Switzerland, the fetus must be at least 30 centimeters (12 inches) long
  • In Belgium and France, births at less than 26 weeks of pregnancy are registered as lifeless
  • And some countries don’t reliably register babies who die within the first 24 hours of birth.

All of these factor can distort infant mortality statistics and these factors should be controlled for when making cross-country comparisons. That is you should consider infants that are considered as “live births” in all countries you are looking at. For example, if you are looking at infants in the U.S., France and Belgium you might want to exclude infants in the U.S. that are born at less than 26 weeks of pregnancy. When we do this how do the infant mortality statistics look? Closer? Statistically indistinguishable?

And when it comes to life expectancy it is a rather gross statistic that can incorporate lots of other factors unrelated to health care. How is a homicide victim treated when it comes to statistics on life expectancy? If the U.S. has a higher homicide rate than another country how exactly does that relate to the health care system in either country? And what about the infants and the differences as to what counts as a live birth mentioned above. If a premature baby in the U.S. dies and the age of death is listed a zero whereas in another country it wouldn’t be included at all, then you have a pretty serious measurement error issue.
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1Technically, this isn’t quite the case, but people will have the option of entering a public plan “similar to Medicare” (link).
2Yes, yes I know this is totally unrealistic, the point isn’t to paint reality which would be cumbersome and obscuring, but to provide a simple example of how the tax status of benefits can be playing a role in higher health care prices.
3I am ignoring, at least for this post the effects of pooling that employer provided health care can pose for this issue.
4Please note that I am not saying that because of this the U.S. system is great, good or even better. What I’m pointing out is that there does not seem to be a simple and easy solution…at least one that makes everybody better off.

FILED UNDER: Campaign 2008, Economics and Business, Government, Health, US Politics, , , , , , ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Excellent points about statistics. So often statistical studies are confused with scientific facts. After all, statistics is just math, and numbers don’t lie. Right?

  2. Dave Schuler says:

    As such, drug companies would curtail their investments and hence fewer drugs.

    Yes, during a bubble resources are misallocated. When the bubble ends, resources assume a more optimal distribution but the companies that were involved in the bubble do less of whatever it is they were doing.

    That’s a key portion of one my points: we’ve been in a government-abetted healthcare bubble for most of the last 50 years. When the bubble ends those in the healthcare sector are going to suffer and there are going to be less outputs from that sector. Yes, that means that the rate of advancement in healthcare is likely to slow.

  3. Michael says:

    Hence you’d be more likely to consume health care resources especially since this tax deferred status would also provide an incentive to move more and more things under “health insurance” such as pregnancy care, child delivery, eye glasses and other low cost and common health events.

    Aren’t those things tax deductible already? If so, what is the difference if no tax is taken out (pre-tax insurance), of if taxes are taken but then credited back by the same amount (post-tax medical expenses)?

  4. Steve Verdon says:

    Michael,

    As far as I know, no you can’t deduct medical expenses due to pregnancy, child delivery, and eye glasses. Nor can you deduct expenses for mamograms, colonoscopies, or other routine procedures (given you reach a certain age) save perhaps unless you are paying out of pocket. Most people want these things in an “health plan” that their “employer pays for” so that they can dodge a large tax hit.

  5. Michael says:

    Ok, could you clarify, when you say that medical expenses from pregnancy or child delivers are not tax deductable, do you mean out of pocket or co-insurance? Co-insurance I know is not tax deductible, but I thought post-tax out of pocket medical expenses were.

  6. Steve Verdon says:

    Michael,

    I thought I was pretty clear, about the only way those costs could be tax deductible is if one pays them out of pocket. Further, you’d likely have itemize your deductions and if you don’t–i.e. you get a lower tax burden using the standard deduction–then you can’t deduct it.

    To the extent that people can deduct such expenses it would increase the demand for such things–i.e. it would lower the costs of having a child, so naturally you’d get more couples having more children at the margins. Frankly, I’d get rid of this deduction since it doesn’t strike me as something that should necessarily be subsidized.

  7. Michael says:

    I thought I was pretty clear, about the only way those costs could be tax deductible is if one pays them out of pocket.

    Ok, so what is the incentive difference between purchasing health insurance pre-tax and paying for health care out of pocket and getting an equal tax deduction?

    If both health insurance and health care cost $200/month, then you either get taxed on $800 of your $1000 income, or you get taxed on $1000 of your income, but credited for $200 worth of taxes from your out of pocket expenses. Either way would work out to paying taxes on $800, wouldn’t it?

    it would lower the costs of having a child, so naturally you’d get more couples having more children at the margins. Frankly, I’d get rid of this deduction since it doesn’t strike me as something that should necessarily be subsidized.

    Um, I can’t think of anything more important to the continuation of our society and supply of tax payers than child birth, why shouldn’t it be subsidized?

  8. Anderson says:

    Steve, I’m sure you’ve been asked this before – hell, it may’ve been by me – but my non-silicon memory is feeble …

    Is there a “health insurance plan” that you *do* like? Leaving aside any wistful “100% free-market” ideas as politically DOA.

    It would be interesting to have a benchmark for any criticisms of Hillarycare, Obamacare, Dubyacare, whatever. Thanks!

  9. Steve Verdon says:

    Ok, so what is the incentive difference between purchasing health insurance pre-tax and paying for health care out of pocket and getting an equal tax deduction?

    If both health insurance and health care cost $200/month, then you either get taxed on $800 of your $1000 income, or you get taxed on $1000 of your income, but credited for $200 worth of taxes from your out of pocket expenses. Either way would work out to paying taxes on $800, wouldn’t it?

    I’ve already noted some of the restrictions in using the income tax deduction. A bit of googling indicates that your medical expenses must go over 7.5%. Further, keep in mind that insurance is usually for large and unexpected events. As such, insurance is usually the better way to go. The problem is that by making the insurance itself tax preferred there is an incentive to push more and more expenses that really shouldn’t be considered insurable events into that catagory.

    Um, I can’t think of anything more important to the continuation of our society and supply of tax payers than child birth, why shouldn’t it be subsidized?

    You really think that without subsidies people are going to stop having kids? Note that in my comment I used the term “at the margins”.

    Anderson,

    If you mean a plan offered by an current or past candidate? Then no, at least in terms of comprehensive reform. If you mean in general, yes I believe I’ve outlined some of the steps I see as necessary to addressing the real problem here, the exponential growth rates in health care expenditures.

    Everything else is quite simply, bullshit. Every country out there that I’ve read about is having health care growing at very high rates and presenting growing fiscal problems. Continue it long enough and simply arithmetic indicates that in time the entire economic output will go towards nothing but health care. Clearly this is impossible and things will come to halt before that, I’d just rather we address it now than by letting “nature take it course” so to speak. I see the latter as being potentially really, really nasty.

    It would be interesting to have a benchmark for any criticisms of Hillarycare, Obamacare, Dubyacare, whatever. Thanks!

    Yes it would, and I’ll note that several fairly well respected economists from Left leaning organizations, views, etc. came out in favor of Bush’s last health care policy of creating symmetry between employer provided health benefits and individuals purchasing health care packages. The non-experts such as Ezra Klein, hated the idea (after initially liking the idea and getting attacked by his commenters).

  10. Michael says:

    Further, keep in mind that insurance is usually for large and unexpected events. As such, insurance is usually the better way to go.

    Maybe that used to be what insurance was for, now a days a simple ear infection in your child can easily run $500 or more between the doctor and the antibiotics. Stitches? You’re talking over a thousand, easy. There is no way middle to lower class people could pay for routine medical care completely out of pocket, believe me I’ve tried.

    You really think that without subsidies people are going to stop having kids? Note that in my comment I used the term “at the margins”.

    Sure I do, or at least having them later in life which generally leads to a higher chance of health problems in their children. Certainly having more than one will become prohibitively expensive for most middle to lower class citizens. And if they can’t pay for child birth, should they be turned away from the hospitals? I don’t think so. That means that instead of people paying private insurance to cover it, public hospitals will be giving services to people who can’t pay for them. That means the hospital will either use state money (your taxes) to cover the expense, or raise the price of other services that you and/or your insurance pays for, one way of the other it winds up costing you more.

  11. […] <b>Health</b> Care and Individual Mandates […]

  12. […] <b>Health</b> Care and Individual Mandates […]

  13. Grewgills says:

    Senator Clinton’s plan will force employers to provide health care for employees and for those firms that can’t do this due to cost constraints Clinton’s plan will offer subsidies.

    Employers are already forced to provide health care for most working Americans. The most recent numbers I could easily find indicate that about 61% of Americans are covered by employer coverage (16% government, 9% individual, and 18% not covered). Of that 18% uncovered a little over half work so it is not likely that more than 10% will be pulled into employer coverage by the Clinton plan moving to ~70% Americans covered by employer provided insurance.
    It seems your problem with her plan is largely that it does not scrap our current employer payment framework. Do you think it is politically possible at this point to scrap employer mandates?

    The problem here is that this restricts choice for consumers

    Again, it in no way reduces the number of choices from those currently available. You will have every choice open to you that you currently have other than the choice to do without health insurance. If you are covered now you will almost certainly retain the same coverage with this plan in place. The only difference people currently covered will see is a tax break if they pay for their own insurance. 1 The only difference in choices is for those without insurance and their choices are increased, or in the case of those without means to pay their choice changes from no insurance to government provided insurance.
    To use your movie analogy.
    Currently your employer will pay for you to go see a comedy or you can pay to see one of the action films.
    Under her plan your employer will continue to pay for you to see the comedy or you can pay to see one of the action films or you can pay to see a documentary (both potentially with a tax rebate).

    Suppose your tax rate is 20% and your health care costs $1,000. Now if you were paid that $1,000 and then required by law to purchase an insurance policy you’d have only $800 with which to go buy insurance. Under the current employer-provided system you’d be allowed to purchase a $1,000 policy.

    Unless of course you are given a tax rebate that covers the additional 200 dollars, then you have the same amount of money to pay for your coverage.

    One solution to the above problem is to make the tax benefit of health benefits symmetrical. That is tax the benefits as income, or if a person opts to take the cash and go buy health insurance of some sort that expenditure is treated as a tax credit.

    Taxing the benefits as income is both not viable politically and would likely make the problem of the uninsured larger not smaller.
    The Clinton plan includes tax credits to buy insurance.
    Would your objections to her plan be overcome if people were allowed to opt out of employer provided coverage in favor of a tax credit to buy their own coverage? 2
    Alternately an additional option could be included in employer contracts that would have the employer put the amount they spend on health insurance for an employee into an account that the employee could use to purchase insurance (private or gov’t employees health) with any excess put into a health saving account and any deficit made up by the individual.

    Another part of Clinton’s plan that I don’t like is the vague rhetoric about using the coercive power of the State to secure price discounts for pharmaceuticals.

    This would almost certainly be limited to the government using its immense purchasing power to get lower prices on drugs as the VA already does. If this is the limit of the “coercive powers” used do you still object?
    This is done by every other Western industrialized nation and the result is lower prices. You have said before that this amounts to the US subsidizing drug research for the rest of the world. So I ask again, if we are going to subsidize drug research why not do it directly so that we get more vaccines and less viagra clones?

    While one could argue that private insurance firms can do something similar they lack the coercive power of the government. Insurance companies do not have paramilitary units that they can send into terrify your work force, arrest your managers and executives, seize your records, or even freeze bank accounts and enforce asset forfeitures.

    This has not been proposed. The VA negotiates lower prices without commando tactics, government provided insurance should be able to follow their lead.

    Another point to consider: just about every country out there has a problem with its health care spending. Canada, England, France, Germany, etc. All of them are looking at serious fiscal issues in the not too distant future.

    The point you gloss over is that our health care spending problems dwarf theirs. If they were to meet us even half way on per capita health care spending these funding shortfalls would not be looming.

    The reality in places like Canada and England is that you’ll likely end up on a waiting list and wait weeks maybe months depending on what sort of treatment you need.

    First, British health care is a train wreck for a variety of reasons and there is virtually no chance of the US adopting the British model. The models that we have any realistic chance of adopting are present in continental Western Europe. If you are looking for what outcomes in the US could be you should look there rather than the UK.
    Second, almost every anecdote about wait times I have heard involves hip replacement surgery, something a growing number of Americans are traveling to the developing world for. I only know one person here who has had hip replacement surgery and they had to wait about a month. Do you know what the wait time is in the US? Is it substantially less?
    Wait times for typical treatment in Western Europe are minimal. You can generally see a GP same day. In most instances specialists must be met by appointment, usually within a few days to a week. Wait times for most procedures are minimal. The same is true of insurance coverage I had in the US.

    One comment in particular from Grewgills is one I hear often and always sets my teeth grinding…

    That all of these countries pay considerably less is not in dispute. What remains is results, which can be obscured by other factors.
    The point is that regardless of other obscuring factors all of these countries measure better results. Do you really think that differences in measurement always skew to the detriment of the US? Isn’t it more likely that some skew in one direction and some in another?
    This aside, no one is seriously arguing that the health outcomes in these countries are worse for the average person. The differences lie at the extremes. Those at the high end may lose out a bit, but those at the bottom get insurance.

    Re: Infant mortality
    The most egregious example I have seen of skewing data away from WHO standards (similar to US standards) is the ex Soviet Union and this amounted to a 22-25% lower reported IMR. If we assume that every country other than the US is skewed down by 25%, the US would still be 15th or 16th in IMR. If we assume that Western European IMR results are skewed down by a much more realistic (though probably still too high) 10%, the US still has a higher IMR than any Western European nation other than Spain, Italy and Belgium (it would be in a virtual tie with Italy and Belgium).

    1 It is unclear, but it is possible that you would be allowed to opt out of employer provided care and buy in to the government workers plan or another private plan with a tax break to help pay for coverage. This would mean more not less choices for the currently insured.
    2 This would require some work to make it cost neutral.
    3 What is the tag to superscript?

  14. Michael says:

    3 What is the tag to superscript?

    <sup>, but it gets striped out of your post somewhere between the preview and posting, so don’t use it.

  15. Steve Verdon says:

    Michael,

    I’m going to need some evidence supporting those assertions. $500 for an ear infection including antibiotics? I find it hard to believe that amoxicillon is that expensive and that a 20-25 minute doctors exam is that pricey. Maybe if you are using the emergency room, but ear infections are definitely NOT ER level stuff.

    Sure I do…

    That is just a nonsensical position.

    And if they can’t pay for child birth, should they be turned away from the hospitals? I don’t think so.

    Now you are arguing the other end which you just rejected. Sorry you can’t have it both ways.

    As for denying service, fine let them in, but then confiscate their property. Cars, house, etc. till the bills are covered. There are other options that are cheaper than having a baby, and if a couple can’t afford to have children then they should avail themselves of those options such as the, by comparision, amazing cheap condom, birth control pills, etc. If you insulate people from the costs of making poor choices, then you’ll get people making more poor choices. Seriously, in the one case where an ounce of prevention is worth much, much more than the “cure” the side that always argues the “ounce of prevention/worth a pound of cure” position suddenly rejects that notion. Oh damn, another irony meter down the tubes.

    Grewgills,

    Employers are already forced to provide health care for most working Americans.

    Depends on the size of the company. Under Clinton’s plan smaller companies will have to do this.

    It seems your problem with her plan is largely that it does not scrap our current employer payment framework. Do you think it is politically possible at this point to scrap employer mandates?

    Yes, if the asymmetry in terms of taxes on benefits is removed.

    Again, it in no way reduces the number of choices from those currently available.

    Yes, and that is part of the problem. We should be expanding the choices people have available to them.

    Taxing the benefits as income is both not viable politically and would likely make the problem of the uninsured larger not smaller.

    Tell us again how you favor raising taxes. Sure taxing benefits is like increasing tax rates, but many on your side of the issue seem to think that is politically viable. As for those who don’t have insurance already taxing employer provided benefits would not impact those who don’t have employer provided insurance or those who purchase insurance on their own. Still, I’d favor a tax credit making the tax status symmetrical without raising taxes on those who get employer provided benefits.

    This would almost certainly be limited to the government using its immense purchasing power to get lower prices on drugs as the VA already does. If this is the limit of the “coercive powers” used do you still object?

    Yes, just as you would have objected if you were alive when Standard Oil did the same thing.

    This has not been proposed. The VA negotiates lower prices without commando tactics, government provided insurance should be able to follow their lead.

    Yes, it is best not to argue with the entity that buys its military hardware in bulk.

    First, British health care is a train wreck for a variety of reasons and there is virtually no chance of the US adopting the British model.

    […]

    Second, almost every anecdote about wait times I have heard involves hip replacement surgery, something a growing number of Americans are traveling to the developing world for.

    […]

    Wait times for typical treatment in Western Europe are minimal.

    Canada has waiting lists as well and here in California there is a push to implement a State level program just like Canadas. And no, not all waiting lists are for hip replacements, and yes, U.S. wait times are lower.

    That all of these countries pay considerably less is not in dispute.

    Yes it is. You aren’t counting the costs due to waiting lists for example. If a person is waiting 16 weeks for a procedure and has pain, restrictions on what they can do, where they go, etc. and possibly miss work, then those are all costs. These costs are in immediate dollars, but they are none-the-less costs and ignoring them means you aren’t capturing everything. So yes, there is a dispute. A simple comparision of statistics is misleading, IMO. The qualitative difference might be true, but it is really the quantitative that we should be looking at.

    The point is that regardless of other obscuring factors all of these countries measure better results.

    You can’t make this claim without correcting for these other factors. For example, look at all babies that are born after 26 weeks, weight more than a pound and satisfy the length requirements. Then compare mortality rates between countries. Then and only then can you argue that one country is better than the other. You might also want to correct for factors such as racial mix as well as infant mortality seems to be correlated with race. And this is just one of the many statistics that is used to make these justifications.

    Do you really think that differences in measurement always skew to the detriment of the US?

    In the case of infant mortality, sure I do. In other areas, they might skew in the other direction, but the point is that using the simple statistics will give a misleading picture. Your argument that things will, on average balance out, strikes me as possible, but also unlikely.

    This aside, no one is seriously arguing that the health outcomes in these countries are worse for the average person. The differences lie at the extremes. Those at the high end may lose out a bit, but those at the bottom get insurance.

    This is just a load of misleading dreck as far as I am concerned. No matter where you look health care expenditures are on an unsustainable growth path. Expanding health care accesss will expand the demand which will simply aggrevate the problem not make it better. This is the real problem that nobody, and I mean nobody, in the presidential race is talking about.

    1 It is unclear, but it is possible that you would be allowed to opt out of employer provided care and buy in to the government workers plan or another private plan with a tax break to help pay for coverage. This would mean more not less choices for the currently insured.

    While I would dislike the plan less if the above were true, I’d like to see it spelled out explicitly and not just what I hope will happen.

  16. Grewgills says:

    As for denying service, fine let them in, but then confiscate their property. Cars, house, etc. till the bills are covered.

    So let them have their baby in the ER and then remove all means they have to care for that child?

    Depends on the size of the company. Under Clinton’s plan smaller companies will have to do this.

    And most of this new employer coverage will be subsidized. We are talking about going from ~60% employer coverage to ~70% employer coverage. Given that this extra 10% comes from the pool of uninsured, what is the negative impact of this?

    Yes, if the asymmetry in terms of taxes on benefits is removed.

    I very much doubt this. Most employees would not see an substantial increase in pay, certainly not enough of one to pay for medical insurance, if employer mandates were removed. A tax rebate could alleviate this for some, but for many this would be insufficient to buy insurance. Would you support an increase in the minimum wage sufficient to cover the cost of insurance lost?

    Yes, and that is part of the problem. We should be expanding the choices people have available to them.

    So, doesn’t this torpedo your argument that her plan is removing choices?
    Her plan does not reduce the choices of people already covered. It increases the choices of people not covered or for those who cannot afford insurance with tax rebate it changes the choice from no coverage to Medicare type coverage.
    This is perhaps less than some hypothetical third way, but that way has not been proposed. If it has link to it. Until then the reducing choices argument is a bit disingenuous.

    Yes, just as you would have objected if you were alive when Standard Oil did the same thing…
    Yes, it is best not to argue with the entity that buys its military hardware in bulk.

    Are you actually saying here that you oppose the VA using its purchasing power to negotiate lower prices?
    Do you agree with the prohibition against Medicare using its purchasing power to negatiate lower drug prices?
    This philosophy seems to condemn the government to always pay more than any private entity for any product or service. It’s mighty convenient to rail against government inefficiency then support policies guaranteed to make it less efficient.

    And no, not all waiting lists are for hip replacements, and yes, U.S. wait times are lower.

    Yet all of the wait times quoted by those opposed to universal care seem to be for hip replacements. Why is this do you think?
    What is the wait time for a hip replacement in the US?
    Do you have statistics to show that wait times for typical treatments are substantially lower in the US? (for previously stated reasons do not use UK for comparison)

    Yes it is. You aren’t counting the costs due to waiting lists for example.

    This oft repeated statement implies costs other than waiting lists. Could you enumerate these?
    As far as restrictions on where to go I assume you mean where they can go for treatment. There is no such restriction here nor are there restrictions on allowed activities. As far as missing work, isn’t this a universal with any major operation?
    Wait times here are minimal. My Norwegian, French, Belgian, and German colleagues also state that their wait times at home are minimal. I haven’t discussed health care with my Spanish and Portuguese colleagues but will get back to you. For operations like hip replacements this wait is generally accompanied by preparation for the procedure.
    As a side note would you oppose the right of an insurance company to impose similar restrictions on care?

    A simple comparision of statistics is misleading, IMO. The qualitative difference might be true, but it is really the quantitative that we should be looking at.

    Here I think you have quantitative and qualitative differences reversed. What numbers do you propose putting to the negative externalities you seem to think are pervasive in all universal care systems. To use a recent example of yours, what number would you put on not being allowed to smoke prior to an operation?

    You can’t make this claim without correcting for these other factors. For example, look at all babies that are born after 26 weeks, weight more than a pound and satisfy the length requirements.

    I addressed this in my previous comment, but will repeat it here for you.
    Re: Infant mortality
    The most egregious example I have seen of skewing data away from WHO standards (similar to US standards) is the ex Soviet Union and this amounted to a 22-25% lower reported IMR. If we assume that every country other than the US is skewed down by 25%, the US would still be 15th or 16th in IMR. If we assume that Western European IMR results are skewed down by a much more realistic (though probably still too high) 10%, the US still has a higher IMR than any Western European nation other than Spain, Italy and Belgium (it would be in a virtual tie with Italy and Belgium).
    Do you have any evidence that the ethnic mix of Western European nations improves their IMR relative to the US?
    Do you have good data that shows racial differences in IMR that have been decoupled from income, available care, etc?

    In the case of infant mortality, sure I do. In other areas, they might skew in the other direction, but the point is that using the simple statistics will give a misleading picture. Your argument that things will, on average balance out, strikes me as possible, but also unlikely.

    As I have illustrated above the IMR figures are well outside the bounds that whatever small anomalies exist can account for.
    Do you have evidence that measurement factors skew more to the detriment of the US? Isn’t it more likely that these factors skew either in the opposite direction or are balanced?

    No matter where you look health care expenditures are on an unsustainable growth path.

    This would seem to indicate that the problem is independent of whether or not universal care is in place.
    Are US health care costs growing significantly slower or faster than other Western industrialized nations? The feeling I get from what I have read is that US costs are growing more rapidly, but I haven’t seen a definitive comparison of growth in costs between countries. Do you know of one?

    Expanding health care access will expand the demand which will simply aggrevate the problem not make it better.

    This is simply an argument against insuring the uninsured. Should we take insurance away form more people to bring the cost problem under control?
    Wouldn’t it make far more sense to increase supply rather than to restrict “demand”?
    On this front, if memory serves, we are at least close to agreement. The government rather than the AMA should be responsible for accrediting medical schools and certifying doctors. This would allow for increased supply of doctors to handle increased demand by the newly insured. There would be a lag, but that is a short term problem.

  17. […] Steve Verdon wrote a fantastic post today on “Health Care and Individual Mandates”Here’s ONLY a quick extractLike Ronald Bailey mentioned in the linked article I think individual mandates could be part of a reform of health care that could make health care more consumer driven. My biggest problem with Senator Clinton’s plan is that it doesn’t … […]

  18. […] Steve Verdon wrote a fantastic post today on “Health Care and Individual Mandates”Here’s ONLY a quick extractLike Ronald Bailey mentioned in the linked article I think individual mandates could be part of a reform of health care that could make health care more consumer driven. My biggest problem with Senator Clinton’s plan is that it doesn’t … […]