Maggie Mahar vs. Arnold Kling
By Arnold Kling
She is a market-hating health care expert. She writes,
Just as the U.S. spends more per person on healthcare than any other country in the world on healthcare, healthcare expenditures in Massachusetts surpass spending in every other state. And this, I propose, is why Massachusetts is having such a hard time implementing its new healthcare reform law.
…Insurance is expensive in Massachusetts because its citizens consume more healthcare than people in many other states. They undergo more tests and procedures than most of us, and they see more specialists. Look at a graph of average healthcare expenditures per person in Massachusetts compared to average healthcare expenditures in the rest of the U.S., and you find that in Massachusetts, individuals receive an average of nearly $10,000 worth of care each yearcompared to just a little over $7,000 per capita nationwide.
…Researchers have concluded that this is because so much of the healthcare consumed in high-spending regions is unnecessary. This is care driven, not by medical need, but by supply. By definition, overtreatment exposes the patient to more risks than benefitsor as Dr. Elliot Fisher, one of the Dartmouth researchers, puts it, Hospitals can be dangerous places, especially if you dont need to be there.
Now consider supply in Massachusetts. It turns out that the Commonwealth has one doctor for every 267 citizens of the stateversus one doctor for every 425 people in the nation as a whole. Meanwhile, the state has a critical shortage of primary care physiciansand an abundance of specialists.
Now, compare what I wrote in 2005, several months before the Romney plan passed.
UPDATE: See below for more, and see the comments for Maggie Mahar’s articulation of her position.In the Weekly Standard, I wrote,
if I were going to pick a state in which to attempt an experimental health care financing reform, it would not be Massachusetts. Massachusetts, with its outstanding medical schools and world-class hospitals, is rich in the suppliers of premium medicine, and abundant supply has been shown to drive up usage.
Mahar starts out her post with an interesting poll
Dr. Steven Schroeder, former head of the Robert Wood Johnson Foundation and Distinguished Professor of Health and Health Care at the University of California, San Francisco, told a provocative story about a poll that asked patients in the U.S. `Canada, Australia, New Zealand and the U.K the following question:
If your personal doctor told you that you had an incurable and fatal disease, would you accept that diagnosis or seek a second opinion?”
* In the U.S., 91 percent of patients said they would seek a second opinion.
* In Canada, 80 percent
* In Australia , 71 percent
* In New Zealand, 51 percent
* In the U.K., 28 percent
My line is that America’s health care system reflects American values. One of our key values is, “Don’t give up!” Suppose you have, say, a problem with your shoulder, and your doctor says that you should just live with it and take a pain reliever every now and then. If you tell twenty of your friends and colleagues about this recommendation, you will come away with the names of 25 doctors you should see. Even if individual doctors want to avoid unnecessary procedures, society is working against them.
In a related post, Mahar reports,
Uninsured citizens earning more than 300% of the poverty level are expected to buy their own insurance. Here, the state hoped that 228,000 of its uninsured citizens would sign up. So far, just 15,000 have enrolled. Apparently, theyve done the math and decided that it would be cheaper to pay the penalty. But their premiums are needed to keep the program going. If more in this group dont sign up, it is not at all clear how the state will be able to continue subsidizing the poor.
Yesterdays first speaker, Robert Blendon, a professor of Health Policy in Harvards Department of Health Policy and Management, talked about what Massachusetts experience might mean for the national health care debate: Massachusetts is the canary in the coal mine, Blendon declared bluntly. If its not breathing in 2009, people wont go in that mine.
It always amazes me how much consensus there is concerning the diagnosis of what is wrong with our health care system. Maggie Mahar and I agree that the problem is the extravagant use of medical procedures with high costs and low benefits. We agree that the U.S. is an outlier in the use of what I call premium medicine–specialists and high-tech equipment.
We agree that the incentives in medical care are a major cause of the problem. Mahar focuses on “fee-for-service” medicine, which is an adverse incentive on the supply side. But (a) other compensation schemes cause other problems and (b) fee-for-service does not explain all of the referrals to specialists and all the doctors who send patients to get MRI’s at completely independent diagnostic centers. Still, I am willing to listen to ideas for other compensation methods, particularly the opportunities that might be afforded by deregulation.
I focus on the incentives on the demand side, particularly comprehensive health insurance. There, the Maggie Mahars of the world only want to put more people into the same incentive-distorting system.