Monday, August 10, 2009

whose health care are we paying for, anyway?

If you're not completely bored with the health care debate, or even if you are ... here's an interesting article from Saturday's Wall Street Journal written by a British doctor:

Health care reform: do animals or people get better care?

I'm really not sure how to describe or summarize it ... but he does make an excellent point that it's acknowledged everywhere that Americans subsidize the entire world in medical research and technological advances. We do all the work and spend all the money, and then everyone else adopts our innovations and progress without paying a dime.

2 opinions:

Spencer said...

As I've mentioned previously, health care is a social good that generates positive externalities. That means, of course, that there is a free rider problem. America is willing to pour money into R&D, and others benefit. We're not the only country pursuing new developments, to be sure, and we do gain some benefit from better global health, but it's a cost we've deemed worthwhile nonetheless.

The same condition exists concerning the military, of course, yet few critics of health care reform would complain that at nearly $2,000 per person annually we account for 41.5% of global defense spending. (Only Isreal spends more per capita, and China, the second largest in total, accounts for only 5.8%.)

The article is a bit all over the place, and his gimmick comparing animal and human health care is really nonsensical (as he somewhat admits half-way through).

What I think is interesting is the French comparison. It is still one of the world's most expensive (~11% of GDP), but provides universal coverage and better outcomes while also involving market forces and supplementary private insurance. They still face rising cost issues, but the fearmongering that any US reform must inevitably look British or Canadian is ridiculous.

The other interesting argument is the "state's rights" one, which (with all due respect to your NCSL work) of course has no inherent truth to it and is primarily trotted out whenever it's politically convenient. States can and do compete on any number of issues, typically economics. However, when it comes to provision of social goods, the tendency is a race to the bottom. Do we want people to move across the country in search of better health outcomes? Not really. And if that happens, the influx of people needing coverage to a state offering it could overwhelm an otherwise stable system, creating a first-mover disadvantage.

Regulation varies between states, and except where it helps them obtain a monopoly (yes, we're looking at you BCBS-Alabama) private insurers generally want a consistent standard for administrative efficiency, not 50 different sets of rules. States have been competing for 200 years. I'm not sure what great change he's expecting if we keep waiting a bit longer. For all I can tell, plenty of states hope the Massachusetts initiative fails so that they can further justify their inaction.

treen said...

This is another discussion for another day, but yeah, I do have a problem with being the global police force and our one country footing the bill for almost half of all defense spending in the world. And I'm a critic of health care reform too. Go figure.

I'm not convinced that chucking the various state regs for darn near anything in favor of a national plan is the silver bullet, including with health care. I've lived in 8 different states as an adult (including the District), and they all have different needs based on population demographics, the local economies, what types of industries are in the area, etc. Montana needs cardiopulmonary specialists because of all the previous asbestos production there. Utah needs more obstetrics and pediatrics services than most places. You get the idea ... and they all cost different amounts which should affect premium costs for that locality.