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Krugman on socialized medicine
Systems of actual socialized medicine, like Britain's, are actually very good at saying no: there's a limited budget, and the medical professionals who run the system set priorities. That's the reason British health care delivers results better than ours, at only 40 percent the cost — there are long waits for elective surgery, but that's because doctors think that it's not a high priority...
Krugman gets points for a mostly honest description but he is a lousy salesman. Is there any doubt that most people reading this will say "no way, not in America."?
Posted by Alex Tabarrok on August 29, 2007 at 07:09 AM in Economics | Permalink
Comments
Isn't the first step of choosing a system to select the goals?
Being a Canadian, I like the Canadian health care system because it provides (to my mind), the best bang-for-the-buck while providing a reasonable level of health-care. (Pulling numbers out of the air, we get 90% of the outcome for 40% of the dollars). In other words, it provides the best possible outcomes for the amount of money that the people as a whole are are willing to spend.
However, if your goal is maximum possible health-care regardless of cost, the American system is obviously the way to go. Likewise, if your goal is to allow each person to determine how much they are willing to spend on healthcare, non-socialized healthcare is the only option.
What socialized systems are good for is rationing health-care in as humane and efficient way as possible. If rationing is not your goal, then socialized medicine has all its own down sides (occasional mis-allocation of resources, etc.) without any of its strengths.
Posted by: Tom West at Aug 29, 2007 7:47:47 AM
"What socialized systems are good for is rationing health-care in as humane and efficient way as possible."
Hm... I disagree strongly.
Posted by: Erik at Aug 29, 2007 8:01:23 AM
"there are long waits for elective surgery": this can be made much more reasonable and accurate by pointing out that there are long waits for PUBLICLY FUNDED elective surgery. Private elective surgery (and private supplemental insurance, which could pay for it) is also available.
Tom: the American system gives "maximum possible health-care regardless of cost" to an elite, not to everybody. The number of uninsured is steadily growing, and they (on average) do not get even basic health care.
Posted by: Mike Huben at Aug 29, 2007 8:04:47 AM
But most people I know who support universal healthcare would opt for a French-like system; almost nobody would choose the British system.
Erik, good argument.
Posted by: eriks at Aug 29, 2007 8:08:42 AM
the reason British health care delivers results better than ours, at only 40 percent the cost
Actually, just last week the Telegraph reported a Lancet Oncology study that said that NHS had one of the worst cancer survival rates in Western Europe and all of Europe had worse survival stats than the US.
More details (5-yr survival statistics cancer-by-cancer) here.
Mike: read the cancer studies - it's not just the elites in America doing better, the vast majority in America are getting better health care than the vast majority in Europe.
Posted by: Jody at Aug 29, 2007 8:12:56 AM
"for the amount of money that the people as a whole are are willing to spend." - yes this is key. Socialized health care, like socialized anything, gives you what "the people as a whole want". I have never met Thepeopleasawhole, so I don't know that I want the same thing.
For example, someone with a rare neurological disorder might be willing to spend more than Thepeopleasawhole want to spend per capita, while a very healthy young person might want to spend less. Private insurance allows that healthy person to spend less and still be covered in case she gets cancer or some disorder later-- while the person with the rare disorder is not left without any treatment options, because Thepeopleasawhole didn't want to spend enough.
Canada, for example, creates almost no new medicines - without the US they would have little western medicine and much worse survival rates.
Posted by: liberty at Aug 29, 2007 8:22:44 AM
Can there be any doubt health care here is rationed. We Americans just
dont like to view it as such. Forty nine million Americans without
health care (Stat from NPR this morning), many of whom have incomes that
would be classified as middle class. All markets/systems ration health
care since not all those seeking it can afford it or take advantage of
it.
Posted by: clark at Aug 29, 2007 8:24:47 AM
The number of uninsured is steadily growing, and they (on average) do not get even basic health care.
To the extent that this is true, we could solve the problem thru better border security.
Posted by: triticale at Aug 29, 2007 8:26:13 AM
For the defenders of the US system (please assuage my pc feelings and don't use the term Americans unless you are including Peruvians);
1. How do you solve the problem of increasing costs? We currently spend 16% of GDP on health care and this has been increasing at 2.5% about GDP growth for a generation.
2. How do you feel about lack of good care for poor people (or poor children if you think that poor adults have it coming).
I think we need to change to something. Staying with the same system is only an option for ostriches.
Posted by: RobbL at Aug 29, 2007 8:36:58 AM
The key difference between the American system and socialized system is that the American system is better for the wealthy, and worse for the poor. There is no way around that.
It would be interesting to identify the cut-off average amount of wealth or income at which point a person would receive better medical care in Canada or the U.K. against the United States.
I would guess that a socialized system would probably be better for the average individual in the U.S.. But the wealthy have a disproportionate ability to control policy, making it unlikely that we will choose the socially optimal decision to sacrifice some of their care for the good of the average.
Posted by: paul at Aug 29, 2007 8:37:11 AM
The easiest way to boost cancer survival stats is to increase the rate of diagnosis, which the US has done to a tremendous extent in the last 60 years without even slightly reducing the cancer death rate at any given age except for a few cancers (lung, stomach, leukemia, am I missing one or two?)
Posted by: michael vassar at Aug 29, 2007 8:38:45 AM
Data wasn't available for many cancers in France, but here are the US French comparisons for available cancers.
Cancer | France | US
Stomach | 20.7 | 25.0
Colorectal | 59.9 | 65.5
Posted by: Keith at Aug 29, 2007 8:46:18 AM
In general, the cancer data is consistent with my hypothesis that the US system actually does a better job delivering health care, but that Europeans and other nations with nationalized health care keep their spending low and outcomes high through very high sin taxes.
Posted by: Keith at Aug 29, 2007 8:51:22 AM
Isn't saying no what gave HMOs such a bad reputation? In fact, the only time in the past 20 years when health care costs in the U.S. declined was when there were hundreds of HMOs competing against each other. Increasing the number of payers, rather than decreasing them, would seem to be the solution.
Posted by: Ted Craig at Aug 29, 2007 9:04:43 AM
A state-sponsored system is nice in theory (mostly), but in practice it typically falls far short. Regardless of my own personal feelings and experience in both US and European (only UK and Italy) healthcare systems, shifting from one to the other seems next to impossible.
These arguments seems to distill to which "is better." It's fine to argue the merits/demerits, but does anyone really think the US can just scrap what it currently has and start over? That seems to be the assumption and it seems naive and, frankly, rediculous.
In practice, it means a relatively gradual or dramatic shift of the healthcare care system, quite likely creating many more headaches (excuse the pun) than either (pure) healthcare system offers.
One non-trivial issue that no one seems to offer an answer to: how do the hundreds of thousands of healthcare providers (physicians, nurses, etc) willingly accept a dramatic cut in their salaries. That will have to be done and without such, it seems a non-starter.
Posted by: glenn at Aug 29, 2007 9:05:47 AM
We currently spend 16% of GDP on health care and this has been increasing at 2.5% about GDP growth for a generation.
Probably not going to change. The richer the country gets, the longer people live, the higher percentage of GDP people are going to want to spend on health care, especially heroic interventions, particularly as new but expensive treatments are discovered. It's not like treatment from 20 or 30 years ago has gotten all that much more expensive-- it's that things like MRIs, chemotherapy, and bone marrow transplants are now performed.
The key difference between the American system and socialized system is that the American system is better for the wealthy, and worse for the poor. There is no way around that.
The poor in the US have a socialized system, which one might think could be a "way around that." On the other hand, the differential smoking rates (in the US smoking is inversely correlated with income and education, whereas in most of Europe and Japan, smoking is more equally distributed, with smoking among elites and wealthy much more common than in the US) is something that would contribute to inequitable health outcomes regardless.
The health system for the elderly in the US, Medicare, is essentially socialized, and no cheaper than the other system and more expensive than national health care systems in other countries. I remain unconvinced that any socialized medical system in the US would achieve different results, regardless of what is possible in other countries.
Forty nine million Americans without health care (Stat from NPR this morning), many of whom have incomes that would be classified as middle class.
Many of whom are young and healthy, particularly those who live in New York and New Jersey where health insurance regulations (such as those that force insurance companies to offer policies at the same rate regardless of preexisting conditions) make it a very bad deal to buy insurance. It's true that a national health system could take money from those people in order to give it to the sick by mandating insurance purchases. Another decent portion includes illegal immigrants, of course. Now, what you mean is the number of Americans without health insurance. Emergency health care is still available without respect to ability to pay, but one does have to wait in emergency rooms.
The US health system has extremely good results on almost all quality of care measures, once someone has a particular condition. In some cases this is indeed due to superior and earlier detection, which can inflate survival rates if benign cancers are discovered that otherwise would be harmless-- though also create real increases in survival rates if something malignant is discovered earlier. The lower expected lifespan is from higher rates of accidents and violence, particularly among the poor. In addition, the US does very poorly on several lifestyle measures that lead to further health problems, such as diet in general and obesity in particular.
Posted by: John Thacker at Aug 29, 2007 9:08:04 AM
A "mostly honest" description would have said that there are long waits for non-elective surgery and elective surgery is only available in the private health care system for those who can afford it.
Steve
Posted by: Steve at Aug 29, 2007 9:16:55 AM
A 5-6 percentage point difference in survival is impressive, but these are very specific diseases requiring intensive and complicated treatment. Do they outweigh the number of US citizens who do not get treated for more mundane maladies and do not see doctors for preventative care and physicals?
I would think these diseases would be where a free-market system would do well (at a high cost). But a 5-6 percentage point advantage in a select group does not, to me, outweigh a 1-2 year life expectancy gap across the entire population (though I have no idea how much of this is attributable to health care).
Unfortunately, I do suspect pharmacological innovations would be heavily curtailed by price controls in the US, and we and all the free-riders would suffer.
But there is something amiss in our society when drug companies directly advertise there products to us, using a combination of anthropomorphic cgi critters and sunshiny vistas, while often neglecting to mention what these pills even treat.
There has to be some workable middle ground--unless, of course, there isn't.
I gotta say though, the notion of denial of care due to previous conditions seems inhumane. Extend the notion to the extreme. What is a true libertarians objection to insurance companies testing potential customers DNA and excluding from coverage any latent defect found?
Sicko certainly had plenty of goofiness, but one point it made that really hit home with me was that health is an area where we should all band together for the greater good. When we decide individuals are in essence solely fiscally responsible for the maladies that befall them, and we have no imperative or responsibility to help, we have stripped off the veneer of the World of Man and are right back in the jungle.
And baby, Axl done told me what goes down there.
Posted by: Jeff at Aug 29, 2007 9:20:35 AM
John Thacker - "Forty nine million Americans without health care (Stat from NPR this morning), many of whom have incomes that would be classified as middle class."
Not having health insurance doesn't mean you don't get health care. two different things
Posted by: Pat at Aug 29, 2007 9:30:44 AM
John Thacker - "Forty nine million Americans without health care (Stat from NPR this morning), many of whom have incomes that would be classified as middle class."
Not having health insurance doesn't mean you don't get health care. two different things
Posted by: Pat at Aug 29, 2007 9:30:51 AM
clark: " Forty nine million Americans without health care (Stat from NPR this morning), many of whom have incomes that
would be classified as middle class. "
Is there a single resident in the U.S. who has NO access to health care? Perhaps someone who CHOOSES to live in very remote parts of the country may not have access. Anyone living in or near cities has access to free clinics and to the services of non-profit hospitals.
Isn't what you mean that 49 million "Americans" (residents in the U.S.?) have no health INSURANCE?
Millions of U.S. citizens choose to have no health insurance. Many of those are young people for whom the costs of health coverage would be quite low. They take the gamble that health insurance is a losing proposition, especially since they know that non-profit hospitals cannot turn them away if their condition is life-threatening.
Posted by: John Dewey at Aug 29, 2007 9:34:37 AM
Jeff:
but these are very specific diseases requiring intensive and complicated treatment
Cancer is the second leading cause of death in the US, so cancer stats makes a much broader statement about the health care system than something like influenza (which is still a top 10 cause of death).
FYI, heart disease is # 1; hd ~ 654,000, C ~ 550,000, stroke ~150,000 - so there's a big gap after cancer. For what it's worth, I've also seen where medical error is #3, but the cdc didn't list it.
Also cancer treatment is a very expensive regimen, so if insurance was a big problem (on average), then the US's performance should've been pulled way down with respect to the socialized countries. Alternately, US insured treatment rocks socialized treatment so hard that the US outperforms Europe even with a 10-25% penalty from no coverage.
where we should all band together for the greater good. When we decide individuals are in essence solely fiscally responsible for the maladies that befall them, and we have no imperative or responsibility to help, we have stripped off the veneer of the World of Man and are right back in the jungle.
Alternately, if we are forced to care (pay for) for the maladies and befall others, then we are slaves.
Personally, I think for the "long term good" a more market based system would perform much better than either the existing socialized systems or the horribly government interfered/quasi-socialized system we have in the US.
Or to put it another way, food is even more important to life than health care, why not socialize the production and distribution of food? What has been shown to happen time and time again over the "long term" when socialized provision of food is applied? Why would this be different from socialized provision of medicine?
Posted by: Jody at Aug 29, 2007 9:38:50 AM
Jeff,
A libertarian will not countenance the taking of one's property to give to another by coercion. It is that simple. Nothing in the libertarian ethos prevents people from "band[ing] together for the greater good", and libertarianism does not preclude the existence of moral responsibilities to help those unable to help themselves, but you cannot coerce people into cooperation. One of my pet peeves is the constant refrain from statists that their willingness to tax me, or others, for the social good is a measure of their compassion and charity.
Posted by: Yancey Ward at Aug 29, 2007 9:41:07 AM
"Now, what you mean is the number of Americans without health insurance. Emergency health care is still available without respect to ability to pay, but one does have to wait in emergency rooms."
The trouble about the above statement is health care in emergency rooms is without exception the most expensive. Without health insurance it doesnt matter how good the US quality. Which goes back to my main point that all health care is rationed. Those who criticize the British or Canadian systems because of rationing are not recognizing that rationing occurs indirectly in our system. Being unable to access health care for lack of resources (money, insurance) is indirect rationing. Some are selected for better health care, others for little or none at all.
Further, emergency care is required in all states, but many still refuse to access it because many still cant pay, which hospitals in all states want regardless of the status of the client. Yes, there is Medicare, state plans etc.... but income restrictions still limit (ration) health care.
Posted by: Clark at Aug 29, 2007 9:42:57 AM
Sadly, Krugman's brand of natural philosophy/economics has gone from creme de la creme to kooky.
Posted by: indiana jim at Aug 29, 2007 9:45:18 AM
