Kling and Mankiw on Health Care
Finally, Greg Mankiw raises some issues with health care statistics.
1. International comparisons of longevity are distorted by things like homicide rates and low-birth-weight infants.
2. The number of uninsured is boosted by: illegal immigrants; people eligible for Medicaid who have not signed up; and people earning over $50 K per year
3. Increasing expenditures on health care is not necessarily a bad thing.
Before I started delving into health care economics, I was thinking along similar lines, all of which tend to defend America’s health care system. But I wound up in a different place, because of two facts. The first fact is that most of the “surge” in health care spending in the past 30 years has been in procedures involving specialists and high-tech medical equipment. The second fact is that comparisons of groups of people receiving different levels of these types of services almost always show no difference in outcomes. This leads me to believe that we make extravagant use of medical procedures with high costs and low benefits. We are, in Shannon Brownlee’s term, overtreated.
We might be healthier if we spent less money on health care.
UPDATE: I prefer Clive Crook’s piece (link may not work at some later date, because of the way they over-write his columns at National Journal) to Mankiw’s.
I don’t want to be in the position of defending America’s health care system. The position I want to take is against demagoguery, whether it comes from politicians or pundits. The demagogues say that we can continue to insulate people from costs using employer-provided health insurance and Medicare, plus insulate more people through “universal coverage,” and afford it all.
You remind the demagogues that Medicare and employer-provided health insurance are both unraveling on the financial end. They say, “Oh, right. We have to cut costs.”
But cutting costs means changing health care as we know it, in order to reduce the extravagant use of medical procedures with high costs and low benefits. That means either drastically reducing individual choice (by having government dictate which procedures can be done) or drastically increasing individual responsibility (my approach). What the demagogues won’t tell you is that they are forcing us down the path of government rationing, when some of us might not like that so much.