My legal writing professor advised us never to ask a rhetorical question because opposing counsel is probably more than happy to answer it. I don’t know if Leo Morris considered his question rhetorical, but I went ahead and offered some possible answers anyway. Leo asks, with respect to health care, “how can anyone seriously argue that further government involvement will reduce costs?”
My response:
1. Lower administrative costs. Government programs don’t have to pay shareholders, CEOs, or – depending somewhat on the nature of the government insurance plan – legions of bureaucrats to flyspeck each claim to see if it can plausibly be denied.
2. Economies of scale. The bigger the pool of insureds, the easier risk is to manage. For a big enough population, you can predict the risks fairly accurately. Additionally, with that kind of purchasing power, you can negotiate good rates.
3. Stitch in time. If uninsureds or underinsureds get treated sooner rather than later, their care will generally be less expensive.
And, as Craig points out, there is empirical evidence. We are not forging new ground here, other countries have pulled this off. Compared to them, however, the United States spends more on health care as a percentage of its GDP than other industrialized democracies that maintain a single-payer system.
Responding just to #2 here… Economy of scale is what allows Wal-Mart to pay less for what it then re-sells. This is so widely regarded as the work of Lucifer, because that includes labor costs. By your estimation, should we accordingly see labor costs in the medical field go down? And if so, is that good, or the same work of Lucifer?
the problem with wal-mart’s labor practices is that many wal-mart employees don’t earn a living wage (nor benefits… and i’m just talking about wal-mart employees, not the sweatshop workers who make the goods that wal-mart sells). i don’t imagine we’ll see health care wages drop to anywhere near that level.
Yawn.
Your arguments would be amusing if it weren’t for the fact that so many people believe them.
1. Lower administrative costs? With a government bureaucracy? I’ll take the profiteers vs. the government bureaucrats every day of the week and twice on Sunday.
2. Economies of scale only apply when you’re talking about selling the exact same thing to everyone. In fact, this is the reason HMO’s have caused rates to skyrocket. It’s far cheaper for you the other way around when you buy for yourself and only yourself. You don’t have to pay for my diabetes care. If you don’t smoke and don’t work in an industry where you’re exposed to many carcinogens, you can buy insurance that doesn’t cover lung cancer if you wish. If you’re a devout Catholic woman and adamant pro-lifer, you don’t have to pay for insurance for abortions. This one-size-fits all insurance that’s been shoved down our throats by the HMO’s and soon to be the government, raises your costs, not lowers them.
3. The CBO differs with your assertment: http://cboblog.cbo.gov/?p=345
4. Empirical Evidence. Craig offers none. Medicare and Medicaid costs have risen at a much higher rate than insurance rates over the last two decades. The U.S. spends more, yes, but also does more research, has a lower infant mortality rate, and sells our own drugs to other countries for less than they are sold here.
Everyone brings up that these countries with socialized medicine spend less than we do, but no one answers the question that is really important. Do they spend less than they did before they adopted such a system? My analysis which I hope to be able to blog on soon says that the results in that area are mixed.
Really? You can’t make this argument without a douchebag flourish?
I’ve got paying work going at the moment, so I’ll just shoot the easiest target: “Lower infant mortality rate.” The U.S. ranks 33rd.
Responding to Chris:
On your point #1 – You may have a point. Administrative costs are very low when you just stamp “Denied” on half the claims that come in, regardless of their validity. There is no incentive for a private insurer to actually manage care. Their incentive is to deny care. Anyone who has had to use their health care for a major medical problem has experienced this.
On your second, you are absolutely dead wrong on this point. Whether it is consumer credit or insurance, costs decrease with larger, diverse pools. Predictability increases and costs are minimized. See the Central Limit Theorem.
On your #3, you need to read the actual letter the CBO wrote:
“Of course, just because a preventive service adds to total spending does not mean
that it is a bad investment. Experts have concluded that a large fraction of
preventive care adds to spending but should be deemed “cost-effective,” meaning
that it provides clinical benefits that justify those added costs: Roughly 60 percent
of the preventive servic es examined in the review cited above have additional costs that many in the health care community consider to be reasonable relative to
their clinical benefits. Still, providing that preventive care would represent a net
use of resources rather than a source of funding for other activities. (About
20 percent of the services reviewed have costs that are large relative to their
benefits, and a small fraction actually impair health while adding to costs.)”
On your #4, you fail to account for demographic shifts. As boomers age, they are falling off the insurance rolls and are being added to Medicare. This has nothing to do with efficiency, it is simply there are more old people. Medicare rolls have increased 32% since 1990 and have doubled since 1973. See HHS data at: http://www.cms.hhs.gov/MedicareEnRpts/Downloads/HISMI08.pdf
I await your analysis on other countries’ spending. I would speculate that it will turn out to be fairly inconclusive. The UK established the NHS in 1948, for example. Comparison before and after leaves too much variability in expectations, population, technology. There is a fatal flaw in undertaking such analysis, because you can’t inflate the currency for services that did not exist in 1948. For example, how do you compare costs of an MRI? In addition, life expectancy will ahve changed in that time period, so to account for that variability you need to place a value on extended human life per time interval. That exercise will be problematic at best.
Wow, lots of socialist countries much higher than us on that list.
I guess babies don’t have to face the death panels or waiting lists.
Well, I’ll show you! Average lifespan by country, we’ll see how those death panels and waiting lists work in those Marxist places when they start killing grandma!!
http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
Crap. USA: 35th. Canada: 6th. Iceland 11th, Norway 17th.
Uh, Chris? Little help over here with empirical evidence, please! I’m drowning in liberal facts…
To be fair, Canadians don’t shoot each other as much.
To be fair, too many Canadians are rushing to play catch up on that statistic, Craig.
Varan…
Truth. Even my hometown of 1,500 can be a rough neighborhood. My father blames the biker gangs who run dope down the highways.