Aaron Carroll on Medicaid Wars

Enough people have linked to this piece that I thought I should write a response, which you will find under the fold…

To start with a general remark.  Often defenders of ACA request some kind of conservative engagement with the policy, rather than voting for the 34th (?) time for outright repeal with no coherent story of replacement.  I’ve laid out a coherent scenario of how ACA could evolve into something which I consider better, and actually with only modest changes to the law itself.  The mandate gets narrowed, the system as a whole evolves into means-tested vouchers (which proponents such as Zeke Emanuel favor), and possibly HSAs are given a larger role again.  I say states will try to limit Medicaid growth, not that they should but that probably they can over the longer run.  Defenders of the current ACA don’t have to favor my analysis, but in fact what I get back is sheer annoyance from Carroll, repetition of Carroll from various others, and an attack from Krugman, with no substantive engagement on the policy proposal at all.

Carroll writes five times that he is annoyed by my piece, but in hardly any of those cases is he disagreeing with any position I took.  Let’s go through them one-by-one:

I get a bit annoyed when people claim that we can’t “afford” more government intervention or, god-forbid, single-payer. That kind of statement willfully ignores the fact that every country that has MORE government intervention spends LESS.

I most definitely did not say this and in fact I mentioned that single payer systems lower cost.  Spending more on Medicaid, however, will not save the U.S. money (the Oregon study shows this), whether or not we can normatively “afford” it.

I get a bit annoyed by the claim that an expansion of government insurance leads to lines and waiting when lots of countries have universal access and less of a wait-time problem than we do.

A significant influx of people into Medicaid, under current institutions, will lead to more queuing.  That is true whether or not you think other countries with single-payer have big queueing problems.  What I wrote was this:

Unfortunately, Medicaid has some of the worst features of single-payer systems. Typically, a single-payer system will bargain down medical prices, thus adding to affordability, but at the risk of having long lines of patients waiting for care. As it stands now, though, the low reimbursement rates of Medicaid already lead to long lines, or an inability to find a good doctor altogether, while the higher reimbursement rates of Medicare and private insurance keep health care costs high.

It’s even carefully worded “…at the risk of having long lines of patients waiting for care.”  Supply elasticities are positive and so single-payer systems do run this risk.  Yet I am clear that in critical regards the systems of other countries get the better end of this deal compared to the United States.

Another bit:

I get a bit annoyed by blanket claims that doctors won’t accept Medicaid. Such statements often ignore the fact that the majority of Medicaid beneficiaries are children and pregnant women. We don’t need all types of doctors to accept Medicaid patients in equal numbers. They also ignore the fact that lots of doctors won’t accept new patients with Medicare or private insurance, either.

It is very difficult to find a good doctor in northern Virginia who takes Medicaid and I speak from personal experience (helping others).  Or try any number of basic websites, with common quotations such as “Finding a Medicaid doctor constitutes a challenge…”  Medicaid dentists are hard to find.  Try calling say the Washingtonian “best doctors” list and see how many of them take Medicaid.  Large numbers of doctors do take Medicaid but overall they tend to be much worse and there are also problems with queuing.  Think about it: why would the lower payers end up first in line?

There is more annoyance:

I get a bit annoyed when people just claim government programs are “unpopular”. Like Medicare? I don’t think so. Is there any evidence that Medicaid is unpopular? I’d like to see it. Personally, I think that the fact that (a) all 50 states have bought in over time and (b) the Supreme Court just ruled that threatening to take it away is “coercive” speaks to the opposite. Additionally, polling shows the opposite of what Tyler (and lots of others) suggest.

I am sorry but this is a total “read fail.”  I am saying Medicaid (not “government programs” or “Medicare”) will become increasingly unpopular.  (In fact I am known for arguing that big government as a whole is quite popular.)  Every day in the newspaper there is handwringing by governors, not all Republican ones, about wishing to limit or escape Medicaid obligations.  A lot of them would prefer to get block grants and spend the money elsewhere (a simple question for Carroll: if Medicaid is so popular with voters, there is no reason to fear block grants to the states, right?  Voters surely will insist that Medicaid spending be kept at current levels or perhaps even increased.)  Daily Kos serves up plenty of evidence for the lukewarm support for Medicaid, as does Ezra Klein: “But, for a host of reasons, Democrats worry that Medicaid is more endangered than people realize.”  Also note how skimpy Medicaid coverage is in many states.  A lot of states don’t really try to cover poor adults, without children, at all.  Frankly this is standard fare, especially on the left, but somehow if I write it he gets annoyed.

If you poll people and ask them whether they favor health care for the poor, of course they will say yes.  The bottom line is this: right now we are borrowing about forty cents of every dollar spent.  As we move toward fiscal balance, which are among the most vulnerable programs?  Defense spending may be cut somewhat, but Medicaid is far more vulnerable than either Social Security or Medicare.  I didn’t know that was under dispute and in fact it really isn’t.

Some more annoyance from Carroll:

I get a bit annoyed at the blanket acceptance of the awesomeness of the free market in health care, when there is no phenomenal evidence of its success. And again, those countries with less free market are cheaper, universal, and often just as good. So why are we always trying to run away from them?

That is another “read fail.”  What did I call for in the column?

We would then have government-subsidized and mandated catastrophic insurance, and a freer market for other health care expenditures. We might even return to a health savings account approach on the noncatastrophic side.

I also note in the column that is not my first best, but we Americans probably cannot get easily to a first best system (for me a Singapore-style system, with single payer on the catastrophic side rather than mandates for private insurance purchase).  My accompanying blog post even noted that the HSAs could be supplemented with government funds, if it was so desired.

The real argument of the column is that ACA will fall apart for political reasons because it creates too many different groups with different treatment.  The “mood affiliation” of the column is something other than celebration of ACA, and so Carroll pulls out all of the old chestnuts and attacks them, rather than responding to the actual argument.  Basically he should go back and reread the piece itself.


I thought Carroll's post was rather pedestrian and ill thought out. Your response points are well taken but you miss one big point which has confounded health care economic analyses (and one that I don't think can readily be modeled) and that is the impact of present spending on care and it's impact on future spending. Clearly for some medical conditions, lack of treatment leads to increased costs down the road with increased hospitalizations, need for more critical care medications, etc. This is really difficult to predict because of the individuality of each patient and prior care. Thus, I don't agree with "...Spending more on Medicaid, however, will not save the U.S. money (the Oregon study shows this), whether or not we can normatively “afford” it." Obviously there will be increased costs because of new utilization, but what (if any) will be the NET impact on the health care system (ignoring for the moment the famous Keynes quote, "in the long run we will all be dead").

Having been involved in the debates over heath care going back to 1990, I think you are correct in that the ACA as presently construed is going to collapse at some future point because it's just a kludge (and most kludges end up getting replaced). The central issue is whether the replacement is a government or private insurance run program. Either one is fine with me (I'm going on Medicare this year so maybe I don't have a horse in this race!) and we have successful examples in Europe as to how this can work (extremes are England's NHS vs. The Netherlands private insurance mandate model). I am less optimistic about some of the other proposals that you noted including HSAs and the catastrophic approach. These work well for generally healthy 'individuals' but fail with families where there are significant multiple heath care costs (more common than you think).

Anyway, the next several years should be interesting. It's too bad that the Republicans have not been and are not engaged on this matter. I don't think the 'repeal and we'll think about replacing' approach is viable. There will be some defined short term gains as there already have been (I received a letter from my primary insurer that they have already met the 80/20 expenditure/administrative cost mandate yesterday), kids on parents policies until they turn 26, pre-existing condition regulation and so forth. This will make it more difficult to do a blanket repeal as certain groups such as hospitals and the insurance industry adapt to the new model.

Very good comment, thanks....

Well done Tyler, I don't always agree with what you say, but this was fantastic. Also you kind of get the feel that Aaron gets (a) emotional, and (b) isn't the best source of unbiased information. Hence why I stopped reading the incidental a long time ago!

Please keep writing

Tepid support by Democratic Senators, all of whom (these tepid ones, that is) are millionaires, just shows how out of touch millionaires are with the general populace and how out of touch in particular millionaire Senators are with their constituents. It does not mean the support for Medicaid is lukewarm or will ever be lukewarm [dying/injured/malnourished children is not something the general populace will ever stand for (should civility decline that far, then insurance will be the last of our concerns)]. It just means that wealthy Senators (some in spite of their 'moderacy'), not wishing to take from Paul (who votes) will attempt to take from Peter (not old enough to vote).

@Jonathan: Aaron may not be the best source of unbiased information, but there is no source of unbiased information; in fact your own brain is the worst culprit at biasing your information. Also, getting emotional is OK in my book, because it is principally the passionate who contribute to advances in any human endeavor. If you expect a leading scientist to be not emotional or passionate about their subject, then you are asking the impossible. Learn how to never get emotional yourself first, then tell us how that's working for ya.

Leading scientist? What makes him leading. I'm not sure I have read a peer-reviewed study he has ever done. Nor have I ever seen one. Look at his CV and get back to me.

Carrol's emotion gets the better of him, the data he links to supports Tyler's case. Take a look at the link titled "Doctors aren’t accepting new patients with private insurance either"-- his own evidence supports Tyler's case, docs are far less likely to take Medicaid patients an private insurance. His constant confusion between Medicare and Medicaid is inexcusable.

Mea culpa. I did not mean to imply that Carroll was a leading scientist, but that even leading scientists get passionate and emotional and make mistakes. I imagine Tyler has at least one such in his past. Apparently, Jonathan is immune (or did the pot call the kettle black? The self-projectionist is last to know), a first in the long evolution of mankind.

I don't think you can take for granted that improved access to insurance will lead to lower overall health care costs because of increased use of preventive care. This NEJM article (http://www.nejm.org/doi/full/10.1056/NEJMp0708558) surveyed about 600 cost/benefit analysis studies comparing preventive measures and treatment, finding that most are pretty close to each other. The real winners are lifestyle factors (eat well, exercise, don't smoke, don't drink) that won't be impacted by insurance coverage. Whether treatment or prevention is more cost effective is highly dependent on the specifics of each disease and population, and it doesn't look like there will be large net cost savings overall from focusing on either mode. I think the best you can say is that the preventive care savings from adding more people to Medicaid are uncertain, and I think it's more likely that they won't be large in either direction.

By "hard to model," do you mean factors that make it hard to get non critical care regardless of insurance? If a person needs to work 40 hours a week in order to pay the rent, and doesn't get paid sick leave, they're unlikely to take time off to see a doctor until their issue is critical regardless of who pays the medical bill. The opportunity cost of seeking preventive care is greater than just the direct cost of the care, but also the cost of taking time to see the doctor which can include lost work, possibly child care, and who knows what else? I'm not aware of anything in PPACA to reduce these costs, in anything, weren't there rumors that it would make non-traditional doctor's offices like Doc in a Box harder to do?

I just came out from behind the dumpster to post that exact same information.

False positive rates on breast/prostate screenings dictate that we're spending money treating people who aren't sick. Further, we're aggressively treating people
who _might_ be sick just to be on the safe side. Sure, we've got good survival rates, but it's costing us.

"Having been involved in the debates over heath care going back to 1990, I think you are correct in that the ACA as presently construed is going to collapse at some future point because it’s just a kludge..."

But you do know that this kludge is the conservative or Republican solution written into law with all the compromises needed to include all the conservative and Republican patches and fixes to health care.

You know that the various Democratic/liberal/progressive solutions were totally opposed by conservatives and Republicans.

In 12 years when Republicans have the Congress to write their version of universal coverage, they didn't even try. If the solution was "pay out of pocket", then Republicans should have started by ending all support for employer health benefits so killing Medicare and Medicaid and the rest would be sim,ply putting everyone in the same boat to sink or drown together.

Instead Republicans simply paid ever more for Medicare and ever more for Medicaid with no proposal that isn't based on creating victims to be tossed to the lions, or into the volcano, to please the public or the out-of-control-cost gods.

And if the health care delivery system is moving to address the big problems with the system instead of trying to maintain funding for the status quo of out of control costs, why is that a bad thing? Would another 18 years of inaction while costs go out of control better than ACA?


I wonder if your point on "lack of treatment leads to increased costs downs the road" is true...
I am skeptical because of some data I saw on the Carrol/Frankt site that suggest that what our system is very good at is finding conditions EARLIER and applying EXPENSIVE treatments to these - with little or no significant benefit [in fact I would argue that the NET effect on the patient and his or her friends and family might actually be NEGATIVE in terms of lost quality of life and stress and real costs].

At best I thing the evidence in support of this generally accepted "myth" is shaky - unless I missed something.

Less a "read fail" by Carroll than using Tyler's op-ed piece as a foil, by definition unfair, but useful as a way of expressing disagreement with certain ideas even if they are not Tyler's.

While the points he makes are general in nature, he explicitly frames the column as a response to and criticism of Tyler's op-ed. It pretty much is a read fail if Tyler didn't actually say the things he's responding to.

More broadly, the fact that Tyler's column set Carroll off on a general rant against Obamacare opponents is, in my reading, exactly the point about mood affiliation that Tyler was making. If specific, nuanced proposals are simply used as a "foil" for general attacks on the imagined views of one's opponent, then any real discussion is short-circuited.

Most single payer systems have lower costs than the U.S. because they have, at least in part, the capacity to control the supply of health care. Only marginal limits exist in about 35 states (http://www.ncsl.org/issues-research/health/con-certificate-of-need-state-laws.aspx) through a weak certificate of need process in the U.S.. With 4 or 5 times the number of high cost surgeries and imaging studies it should not be a surprise that our health care costs are higher than those in countries like Canada, the U.K and many others that limit supply.It is not the fact that they are single payer it is the fact that they limit capacity and in some instances demand. ACA does not directly do anything that will reduce costs; instead ACA puts in place possible control mechanisms through the accountable care structure. But there is still no deus ex machina with the capacity to control capacity or demand. In order for costs to be controlled, the markets have to be more free or far less free. Personally, I would choose freer markets and more constrained policy makers. Carroll's post lacks substance.

But the limits on care in Canada, France, Japan, et al are set by the voters, and the voters require their systems to out perform the US and cost much less.

Is the US system of random quality and irrational pricing which makes inequality worse any way to run a market?

Do you consider a free market to be the one where the sellers all set the price of food based on how hungry you are, and refuse to sell starving Steve food that they sell to well fed Fred for $10 unless Steve comes up with $100.

You need to really describe in some real detail what "free market health care" means for a poor person born with a disability, a person hit by a drunk driver and disabled, a family harmed by industrial pollution,..., and in terms that has no lawyers filing lawsuits to get millions to pay for health care costs.

Bill Cecil, it is not only capacity and demand that are factors here. Pricing is also very much an issue. In 2006 I had a routine colonoscopy in New Jersey. Total cost (mostly covered by insurance) was north of $5000. I am sure it would be meaningfully higher in 2012. Last year, I had a similar colonoscopy in Switzerland. Switzerland has the reputation in Europe of being a high-cost country for health care. The total cost of the procedure (again mostly paid be insurance) was $1,200. This is less than just the gastroenterologist's fee in NJ.

One of the things I worry about in the ACA is that it is hard to foresee how the market power balance between providers and insurers will shift. It is a good bet that the shifts will be very different in, for example, rural vs. urban locations.

Wow, that's a really high price for a colonoscopy! My last one was back in December of 2009 and the cost was 1/2 of that (Bethesda MD). We know about regional disparities in costs but this one seems way out in the Black Swan range.

Don't know whether it's exactly the same procedure, but under Obamacare, routine colonoscopies are 100% covered by insurance, starting next month.

The fact that any medical procedure is or isn't 100% covered by insurance doesn't seem to matter much. The cost of the thing matters more then who's nominally paying for it.

No one is competing on price. No one has to. The ACA does absolutely NOTHING to address this even though it is one of the biggest causes of high medical care prices.

If you had to pay for that Colonoscopy out of an HSA account, you would shop around until you found the doctor that gave your the right mix of price/service. So would everyone else. It would probably be cheaper than Switzerland!

Dave T, did you follow the link?
What am I missing?

What you're missing is the difference between what the patient pays and what the provider charges.

When the entity paying is required to pay 100% of the fee without having much ability to choose the provider, its bargaining ability is severely limited, and the provider can significantly increase the price.

The fact that insurance companies must pay 100% of colonoscopies means that doctors/clinics can charge more, as the insurance companies can't limit (very much) which providers patients go to, and the patient has absolutely zero interest in finding a lower-priced provider.

Either you are posting from an alternate universe where things work very differently or you have no experience with health insurance here (and I congratulate you on your good health)

But in fact the insured have strong incentives to use cheaper providers. Insurance plans nowadays are no longer simple "fee for service" and haven't been for a long time. every major plan has a network of providers with whom the insurer has been negotiated significant discounts-- and yes, an insurance company has a lot more clout than a single patient does when it comes to that. And for the insured, there's big savings in choosing a network provider over one out of network: the discounts do not apply out of network and the insured usually has to pick up the difference. Plus the copay will higher, and the deductible larger. In the case of major procedures the savings can amount to hundreds of dollars. Even in the case of minor things the savings are not something any sensible person ignores lightly: last month I had an an office visit for a check up and Rx refill. Since my deductible is $300 I had to pay the whole bill. Since I used a network provider that came to $80 with the health plan discount. Had this been out-of-network though there would have been no discount and I would have paid $140.
The only time this system glitches is when the insured is in a hospital setting and they may receive services from multiple hospital providers (e.g., personnel, radiology and other lab services, anesthesiology). Even though the hospital itself may be in-network, the specific providers may not be, yet the insured is not told this or given a choice, and the result can be a nasty surprise on the bill.

To reiterate what John F says below: It's a mystery to me that so many people assume that individuals facing health crises are better at bargaining medical prices than an insurer who makes a living at negotiating those rates en masse and at a distance.

JonF: agreed about providers perhaps not being covered. When hospital asks me to sign a document accepting treatment, the document says I agree to pay any such fees. I have several times crossed this out and replaced it with something like "do not agree to accept any treatment not covered by my insurance". My intent is to force negotiation to occur before treatment. So far, in every case hospital has accepted my alteration.

What I cannot figure out is why insurance companies, who likely have superior knowledge to individual consumers, cannot do a better job controlling costs. I get your point, but no matter who pays the bill it is going to be difficult to asses value when it comes to medical services such as colonoscopies. The first problem is that it is hard to figure out what a good colonoscopy is worth. The second problem is that it is hard for the individual consumer to figure out which provider will provide a good colonoscopy, or at least an acceptable one for the price charged.

In some areas of medicine such as cosmetic surgery or Lasik, the end results more or less speak for themselves, so consumers have a guide, even if it is retrospective. In other areas, the differences are quite elusive, requiring sophisticated study over a large number of years to ascertain. Assessing the merits of a colonoscopy are just that much harder than assessing the merits of botox. The fact that consumers generalize their experiences only makes the problem that much harder.

It's the old statement about health care costs in the US. What are the two types of medical service that have a history of lowering costs and improvements in quality? Cosmetic Plastic Surgery and Lasik. Neither of which is covered by health insurance.

They both also have low-cost alternatives, which is to do nothing. Further, there is no long-term consequence of doing nothing. Just keep buying glasses or being less than a 10 looks wise.

One can go without a colonoscopy, but that's a very questionable strategy if there's a 15% chance you have colon cancer.

More importantly, these are two areas where prices are allowed to work. Prices are practically absent from the US medical system, at least from the consumer's view. What we have is a Soviet-style health system, which is intended to become even worse under Obamacare.
Obamacare's goal is to lock us into a bad system from which escape will be almost impossible. This will be a disaster if it comes to pass and it must be scrapped.

Plastic surgery and Lasik are both completely elective. Both parties in the deal can walk away. Everything in medicine that behaves the same way can be subject to market cost control. Of course Lasik and plastic surgery still pay pretty well.


If you had to pay for that Colonoscopy out of an HSA account, you would shop around until you found the doctor that gave your the right mix of price/service.

More likely your GP would do the shopping. Various friends and I have experienced that when we tell our Doctors that we are paying out of pocket they change to cheaper treatments. One Doctor told me that had I told him that I was paying he would have let my wife come home from the hospital a week earlier than he did.

Right, the problem is over consumption more than pure price-negotiation. Even still, our current fourth-party payer insurance scheme is hardly competetive, and insurance companies have an incentive to just pass on the costs of expensive treatments to your employer, and the govt.

Empirically, insurance companies are NOT good at price competition-- their reimbursement rates are 140-160% higher than Medicare and 2-3x Medicaid and self pay. They subsidize free riders (uninsured and govt programs) to an alarmingly high degree.

The expansion of Medicaid may make the program more politically palatable. Enrollment will go from about 50 million to about 85 million by 2020, so that one American in four will be on Medicaid. (Medicare by contrast will have 60 million enrollees by 2020.)

Recipients will still be poor, but their numbers may give them enough clout to self-advocate.

yes, he responded to claims you didn't make (oh well). on the other hand, if we take what you say here at face value, then you probably need to find a new writing style. the idea that this can be interpreted in any way other than that single-payer means lines is just dumb: "Typically, a single-payer system will bargain down medical prices, thus adding to affordability, but at the risk of having long lines of patients waiting for care." If you disagree, try this: "Working for an organization bankrolled by the richest conservative ideologues in the country puts one at risk for becoming a right-wing political hack." Note of course that I don't *call* you a political hack, so why should that statement bother you?

"If you smoke, you risk dying of lung cancer."
"if you smoke, you will die of lung cancer."

I think the difference between those two statements is pretty significant, not to mention obvious.

The reason your last statement would be considered offensive is the over-the-top, politically charged language. It has nothing to do with the level of certainty you are implying.

In all this, there is no voice asking whether the myriad of services in what has come to be encompassed in "HealthCare" should really be a function of governments at all, at all.

Will no one raise the proposition of governments "phasing-out" of the involvements in the the most fiscally destructive activities of (inadequate) forced savings, medical services for an age class, and medical services for the indigent?

I hope you plan on putting the savings towards a strong police state if you expect this plan to last through a recession anywhere near as bad as the last one.

It's pretty easy to contain a riot of pancreatic cancer patients.

Steve Jobs would have disagreed.

But when the riot is composed of all the parents and relatives of untreated sick people, especially children, then even the Koch brothers might tremble in their mansions.
Right now there are 50 million uninsured people in the US, but they still get last resort emergency room treatment and Medicaid. If those 50 million people plus all the current recipients of government-funded health care (Medicare/Medicaid,etc.) were simply tossed onto the private market (which would obviously ignore them, absent government mandates or means to pay bills) then social unrest would be guaranteed.
Which is why every civilized nation provides a government health care backstop, to prevent untreated sick people from dying on the street (and spreading communicable diseases to their social superiors before and after their deaths).

I'm sorry, but you wrote, "Medicaid has never been especially popular." Carrol responded with a poll showing that Medicaid's not much less popular than Medicare. Perhaps this is an outlier. Perhaps you're right that Medicaid will paradoxically become less popular as more people receive benefits. But absent some other evidence, Carrol's seemingly got you dead to rights on at least this point.

Also, I'll go ahead and put on my baseless speculation hat and say that, absent some Mad Max ruin of the United States and global economy, Medicaid is and always will be more popular than a program in which subsidized care for poor children is limited to catastrophic coverage.

I think Cowen presented mandated catastrophic coverage as an alternative to the ACA mandate, not to Medicaid. I read his points about Medicaid to basically be that it is threatened because the poor have little power to protect this benefit. And in an environment where most everyone wants the government to cut something, programs that don't have strong interest groups playing defense are first on the chopping block.

Medicare is sacrosanct, mainly because the AARP is politically powerful, and less so from respect for our elders. Medicaid only survives through our collective charity, and this is quickly diminished when fear becomes pervasive. I (think) Cowen shares my desire to take care of the very poor. I hope this isn't a "read fail."

Medicare is sacrosanct because old people are not politically monolithic. I bet if you polled it specifically, the most popular parts of Medicaid are for those benefits enjoyed by people already on Medicare itself.

As I read it, he wrote about two possibilities: Medicaid surviving in its ACA-expanded form and Medicaid being displaced by ACA-esque subsidies that only mandate catastrophic care as public opinion turns against a larger Medicaid program.

Why, exactly, popular opinion might be expected to turn against Medicaid after (1) expanding coverage and (2) lowering states' cost per beneficiary was unexplained.

Why, exactly, popular opinion might be expected to turn against Medicaid after (1) expanding coverage and (2) lowering states’ cost per beneficiary was unexplained.

Nothing is free is the explanation.

Good luck campaigning against the Obamacare/ACA taxes when it comes to specific rather than general "no tax cuts!" terms. It's a small surplus tax on the rich and an indirect tax on employees with generous health benefits (and to a much smaller extent, mandate penalties). How do you gin up popular opposition to that?

Medicaid touches a lot more peoples' lives directly than many seem to recognize. For one example out of many, many parents of people in even upper income quintiles are on Medicaid. America has largely shifted away from a society in which children are financially responsible for their parents' long-term care in old age. I'm pretty confident that this will always be more popular than repealing the ACA surtax on high incomes.


The costs will far outstrip the new revenues, and pretty quickly. That is the history of Medicaid, and there is no reason to believe otherwise. In some states, you are talking about doubling the Medicaid rolls. This will show up quickly in both state budgets and budgets at the federal level. Now, you might think deficits are irrelevant, but the public won't agree.

You can take it on faith that Medicaid cost growth will surpass expectations, but the history of Medicaid and Medicare cost projections is a mixture of over and underestimation, with most partisan efforts to discredit past cost estimates completely ignoring that the mandates for both have expanded over time.

yes R Richard Schweitzer, we can aspire to be somalia.

Yeah those Somalians should totally just pick one of their competing guerrilla warlords and give him a regional monopoly on dispute resolution. That'll probably be better.

re wait times, the libs are playing tricks with the stats:

"% of people waiting over 6 days for a doctor" is unimportant relative to "% of people waiting over 6 months for operation". the former only happens for trivial matters, the latter kills people.

the NHS does fine for waiting to see a doctor for a cold, but has terrible wait times when you look at major procedures.

It's interesting to see people treating wait times (even long ones) as an obvious evil on what's usually a pretty technocratic blog. Waiting times for non-life-threatening-but-still-major ailments are sometimes a feature and not a bug in terms of utility maximization for national health expenditures. The optimum wait time is rarely zero (mostly for some emergency care and diagnostics important in mitigating epidemics). Note that neither of these examples aligns very well with care that's generally the most profitable.

I'm consistently baffled by the tortuous efforts by some to try to bring laissez-faire market principles into what is largely a service industry that is in effect a public utility (that is regardless of how it's delivered the structure of need and the way it is supplied will always have externalities and structural imperfections) and one with such a huge asymetrical information component. No other country with a comparable economy does it our way and perhaps we should wonder what's the reason for that.

Plenty of strawmen in Carroll's post, and many of the links to "evidence" do not really tell the story he suggests. I used to really enjoy that site but it has become more partisan, emotional, and borderline arrogant since he became a co-blogger. Unfortunate

None of this addresses the elephant on our nose: the problem of the 5 percenters. Who are the 5 percenters? Why they are the people who comprise about 50 percent of our health care costs. And they are mainly the old and the sick. I have pointed this out on Carroll's site and other sites. I will ask the question here: what do we do with them? Do we continue to provide them with all the care they are getting now? Or do we ration their care? We can do all the cost cutting, improving the health of the other 95 percent, and whatever else one can think of, but none of it matters if we do not address that issue. All this discussion is meaningless without tackling that issue. Do we do a hip transplant for a 70 year old? Do we offer hospital services for a 60 year old Alzheimer's patient? Do we do a kidney transplant for a 90 year old? Do we offer chemo for an 80 year old? Do we perform resuscitation a 78 year old heart attack victim?

What do we do?

But they are largely on Medicare which was not the subject of Tyler's op-ed or the response from Carroll. Medicare has almost no administrative costs and controls other costs as well. The ethical issues that you raise are worthy of a broad societal discussion as it clearly impacts the cost of Medicare going forward.

Maybe true to a degree, but that doesn't answer the fact that they are THE driving force in health care costs. They consume so much that what to do with them dwarfs every other solution. No matter how much we reduce costs in the other 95 percent who consume 50 percent, we get nowhere without cutting costs there. A health care dollar is a health care dollar.

I just continue to be amazed that in all the talk/discussion about health care costs, we never discuss and/or hear about that specific group of people. I like to think of the situation as a boat: the boat will sink if we don't jettison some weight. We have 100 people in the boat. 5 of them account for half the weight in the boat. What to do?

Many people check into the 5%, so that is a bit misleading, e.g. many in perfectly good health develop serious illness at some point wherein they join the 5%. Some recover, but most do not. The question you are really asking is should medical care extend to those with conditions that are expensive to treat. Since the costs are high for the privately insured (the uninsured pretty much just die), who should carry the burden? Why is it better for someone with insurance to cost the other insured so much.

In one sense you are right, but the groups that enter the 5 percent are fairly predictable, and the elderly (no surprise) lead the way. I think you and I are, in a roundabout manner. asking the same question: should we ration care? And if so, ration the care of whom? And if not, are we prepared to pay the enormous costs of providing care to that 5 percent.? This is a moral as well as an economic question. The kicker is that rationing will only apply to the non-wealthy as the wealthy will always be able to buy the kind of care they need.

We may yet all become soylent green indeed.

"We would then have government-subsidized and mandated catastrophic insurance, and a freer market for other health care expenditures."

There is no significant difference between your proposal and what we have now. Here's why:
The ER (emergency room) treats what? Catastrophic medical conditions.
The ER is mandated to take all who arrive. Period. The ER is where people go now for catastrophic care.

Since the poor and undocumented cannot and will not be capable of paying, the net is exactly the same as it was prior to the health care law.

Often defenders of ACA request some kind of conservative engagement with the policy, rather than voting for the 34th (?) time for outright repeal with no coherent story of replacement.

This complaint/demand of theirs boggles me (if it's not just a tactic for them to pretend that "you can't ever go back") - before the ACA, there was no replacement for the ACA.

Outright repeal essentially returns to the status quo ante; one does not need a "coherent story of replacement" to remove a totally new thing.

I can see why, given their priors that assert that "something" is necessary that is different than the previous state, they would want a "coherent story of replacement - but the idea that their opponents, who do not share that prior, have to have one ... because?

It baffles.

Because the prior is unsustainable, even in the short term. If our healthcare costs were in line with other nations of our peers, then there is "no problem". Cut the military pork in addition and the sun can be seen again.

After Carroll replies again, DeLong scores it in straight sets for Carroll, 6-0, 6-0, 6-0.

And for Sigivald, in 2010, Republicans ran on a platform of "repeal and replace" and then promptly forgot about the replacement part - perhaps because everything they wanted to do was even more unpopular than the ACA. I find it baffling that you are baffled by trying to hold politicians to election promises.

{TC: Unfortunately, Medicaid has some of the worst features of single-payer systems. Typically, a single-payer system will bargain down medical prices,}

No, that is NOT how single-payer National Health Care systems work and it would well worth your while investigating before writing about them.

European NHS set the prices for medical care and pharmaceuticals such that they return a fair revenue to both practitioners and BigPharma. In the first instance, my comparative analysis of physician incomes shows, for instance in France, that GPs earn about two-thirds that of American GPs. In the second instance, pharmaceutical costs are far, far lower in the EU than the US.

Both indicators lead to the fact that Public Option National Health Care systems in the EU are much lower than in the US. The latest OECD review puts France's per capita total HC-cost at about half that of the US.

Meaning that single-payer and Public Option mandated-pricing brings an equivalent quality of UNIVERSAL national health-care to the European general public than does non price-mandated privatized medicine in the US.

And as for Health Care wastefulness, see here: http://www.piie.com/blogs/realtime/?p=516 . It is clear which country is the most wasteful due to its "free market" health care mechanism that plunders the economy.

"The real argument of the column is that ACA will fall apart for political reasons because it creates too many different groups with different treatment."

But given ACA merely provides a means for bringing the payment assurance to providers for all the different groups closer to "you will get paid something" from the current "for 50 million patients, expect big trouble getting paid for a big bill that would have been smaller if they had imposed on you sooner and not paid you a smaller bill six months ago." Somehow, everyone getting sick will have some place in the screwed up system that will pay more than zero.

If you want to make a strong case for total health care reform like Britain after WWII, or Israel, or Germany, or Switzerland after two major reforms, make the case strong enough to get Romney to back it as the replacement to reform ACA.

As bad as ACA is, it is progress and better than what we've had for 25 years which is been the result of piecemeal reform based on free market for profit principles with kludges to cover the people priced out of the market.

In 1980 we had a system of VW bug with some running really badly, some up on blocks, and some were VW Karmann Ghia and a few Porsche 914s but most were good solid bugs. Now the system is fragmented with the argument being that someone with the ability to sit in a Lotus without wheels or engine (EMTALA) is well provided for - when they are dying, they die sitting in the car people can only dream of touching. The Medicaid system is built of VW bugs without engines pulled by mules in NY, and by illegals in Texas.

Today the "free market" argument is over how to have a system where 50% of the people have nothing at all, so the other half gets either a Porsche 944 or a Hummer. Then this is compared to the Germans who are stuck with everyone having a VW Golf - obviously, the US is much better because we ignore the people with nothing helping pay for the 944 and Hummers which are better choices than the Golf.

The ACA will not control costs. The Affordable Care Act is relying on dozens of pilot programs and demonstration projects to find better ways of delivering care, the results of which have been disappointing. Further, we will still be left with a system in which no one will be choosing between health care and other uses of money. And if no one is making those choices, health care spending will keep rising in the future with all the relentless persistence it has shown in the past (http://go.cms.gov/KuroN5).

Do, Tyler, give us your reflections on attempts to deal with the main cost drivers: awards instead of patents for pharma, and opening international trade agreements to include physicians' services. Why should we pay premiums for these. I am twice as likely to die from medical error than in a car crash.

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