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Rationing’s opponents: Happy in their fantasy world


In an article misleadingly called Is Socialized Medicine the Answer?” Arnold Kling lays into Krugman and Wells’ rather good article in The New York Review of Books on how we need a single payer system to ration health care equitably. Kling, who appears to be a bright enough guy, is yet another libertarian who made a fortune in the technology business and has plenty of time to mouth off about new subjects.

Sadly despite all his wealth and education apparently he cannot tell the difference between socialized medicine (where all the providers work for the government) and socialized insurance, where all the people are in one or multiple insurance pools and the government sets prices for private contractors. It’s scarcely worth the bother of correcting him, but let’s just remember that Canada, the UK and Scandinavia basically fall into the first category, and everyone else in Europe and Japan (and Medicare here) fits into the second. (See Ezra Klein’s great synopses on different health care systems if you want to know more). Hint: private medicine is predominant in those systems and even exists in the UK. So no one is going to make a rich kid like Kling wait for his care. He can just by-pass the queue,

Of course it’s the wait — both for care and for shiny new and often unproven technology — that’s what he’s complaining about:

The health care rationing that Krugman and Wells believe is inevitable for the United States takes place today in other countries.

And if we ignore the fact that there’s basically no evidence of the rationing he fears in France, Germany, Japan, Switzerland, Holland, etc, etc, etc, I’m quite happy to concede the point. Rationing is inevitable, unless Kling really thinks that we should be spending $100,000 a year keeping 97 year-olds who’s bodies are done alive with a crappy quality of life. And beyond rationing, rationalization is also, if not inevitable, strongly desirable, but that requires actually knowing something about health care economics. Kling might start paying attention to the Dartmouth guys who last week explained that some academic medical centers use 350% more physicians than the Mayo Clinic to perform exactly the same care. But I wouldn’t want Kling to have to go to that much trouble. Let him be happy rebutting all those evil rationing foreigners.

But the slight problem with Kling’s thesis is the unspoken part. “They ration there but we don’t here”.  And it’s echoed by legions of Canada-bashers all across the op-ed pages. Unfortunately it’s pure crap.

I won’t layer on rubbish from the Institute of Medicine, or Health Affairs or other lefty academics to make my point, although I could. Instead I’ll suggest that Kling re-visit a series from that bastion of the hard left called The Wall Street Journal.

In 2003 the WSJ printed a long and excellent series about rationing health care. And, yes, it featured how Canadian hospitals have nurses who’s job it is to allocate treatment such as expensive surgeries based on need, likely outcomes and cost-effectiveness. It even showed that somewhat similar activity was happening at a public hospital in Philadelphia. But the most distressing article for Kling would be the one that showed explicit rationing of care for the uninsured and poor at Univ Texas Med Center, Galveston.

UTMB, as this state-supported hospital is known, has developed a detailed playbook to help determine exactly who gets treated and who doesn’t. Its rules require that patients undergo financial screening before they can be admitted and that virtually everybody pay a fee before seeing a doctor. For patients who are poor or uninsured, the rules restrict or proscribe the use of certain drugs and treatments. Some procedures are barred outright — such as hyperbaric oxygen treatments, which are widely used at other hospitals to help wounds heal. The system empowers certain decision makers, such as Dr. Richardson, to make exceptions to the rules, but usually within a specific budget. Unlike most hospitals, UTMB is also blunt about its need to limit some services on financial grounds. “We are rationing,” says John Stobo, UTMB’s 62-year-old president and chief executive.

So yup it happens here too, and instead of doing it by some defensible way — like looking at the cost-benefit analysis for a population — that an economist ought to commend, we do it on the basis of whether or not you can afford it. And in the US that is  largely based on whether or not you have insurance, which is largely based on whether or not you have a good job, which is largely based on whether you had a good education, which is largely a factor of how well you chose your parents. Well I guess there are economists and satirists who think that type of market selection is OK for health care as well as everything else, but let’s not include them in polite conversation.

Kling’s solution in his forthcoming book is to let everyone pay for everything out of pocket including moving Medicare that way. Beyond the fact that he’s living in political fantasy land if he thinks that Medicare is ever going down that route given the power of the senior lobby and the desperation of the near-senior baby boomers wanting to get into it, he’s clearly much more interested in us going to Galveston, Texas than to Canada. And as health care gets more expensive and fewer and fewer employers pay less and less for it, that’s where more of us are going anyway.

But who said that an economist should care about rational resource allocation? Especially one who lives at the ExxonMobile lobbying shop that is Tech Central Station. I’m just amazed that the Cato kids have taken him in. I thought that they were more sensible than that.

Share  Posted by Matt Holt at 1:29 PM | Permalink

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