Interpreting life expectancy statistics and other health care issues

Matt Yglesias and Paul Krugman weigh in on interpreting life expectancy statistics across the U.S. and the Netherlands.  The fact under consideration, from a few days ago, is that the U.S. has low life expectancy overall but superior life expectancy after you reach the age of 65.

One way to interpret this data (re: Yglesias and Krugman) is to think that the U.S. should spread Medicare to its entire population.

Another interpretation is that spreading Medicare to the entire population would lead to higher expenditures on the health of the young and lower expenditures on the health of the old, for better or worse.  "Medicare for everyone" doesn't simply replicate current Medicare outcomes across a broader swathe of the population.  Medicare works as well as it does, in part, because not everyone is on Medicare or something comparable.  The U.S. split system makes Medicare, at the same time, both more effective in terms of outcomes and more costly in dollar price terms.

In this country the old don't seem willing to accept losing their privileged "first in line" position, namely Medicare for them and few others.  And Congress won't let some egghead committee come along and cut the waste out of Medicare.  The immediate results of the current proposed plan would thus be greater health care expenditures overall, pressures on doctor supply a' la Massachusetts, an even more severe long-term insolvency for the whole system, combined with an unclear resolution for all these escalating pressures.  I don't see many people on the pro-Obama side simply coming out and admitting these increasingly obvious truths, although Andrew Sullivan deserves credit on this score.

You may or may not think that's a good deal overall and perhaps you still think it's a good deal if you assign a high enough priority to covering more of the uninsured.  Or maybe (Kevin Drum has made this argument) you think it's the only path toward long-run cost control.  But if you think it's a bad deal overall, it doesn't mean you are in denial about the fundamental facts of U.S. health care supply or for that matter in denial about the cross-sectional comparisons with Europe.  Choosing French health care institutions for the United States has never been on the table, not even in evolutionary terms.

Sullivan put it very well a few days ago.  He noted that Obama — a master communicator — can't convince most people that the proposed reform is a good deal for them because…it isn't a very good deal for most people. That includes some of the people receiving new coverage, such as those receiving the new forced employer mandates.  (NB: Their wages will go down and they really need the money!  In the shorter run their wages won't go down and some of them will lose their jobs, even with phase-in a few years from now.  I'm still waiting for good Democratic economists to condemn this idea but I fear there is so much fixation on a "victory vs. defeat" framing of the struggle, and desire to skirt the CBO, that this isn't receiving the critical analysis it ought to.)

This desire to claim and promote a more universal distribution of benefits is one reason why you see so much attention paid to the public plan option.  The competing public plan at least offers the promise that some part of the proposed health care reforms will benefit virtually everyone.  My view is that a public plan would soak up many high-risk cases, benefit those cases and few other people, and that overall a public plan is superior to mandates, not Satan incarnate, but not a cure-all for the system as a whole by any means.  Advocates remain oddly silent as to what in concrete terms the public insurer will be instructed to maximize and how that fits in with pressures to extend coverage to more people.

Plan supporters are quite willing to admit "it's not nearly as good as what we wanted," but they're in denial about how truly bad the proposed reforms are in absolute terms or as a matter of economic logic and by that term I mean the economic logic of good Democratic economics, not extreme libertarianism.

In the meantime, repeat this sentence after me: if we don't solve the costs problem, in egalitarian terms things will only get worse, no matter how many people we cover.

The Republicans on this issue are (mostly) very bad and hypocritical but that doesn't give the Democrats license to proceed without a solution.


Comments for this post are closed