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Meanwhile since we spent yesterday

Oct
31
2007

Meanwhile since we spent yesterday talking about intellectual leger de main from Manhattan (from which David Gratzer is bravely not backing down!), the Wall Street Journal just ran perhaps the biggest piece of intellectual rubbish seen in some time based on a study by fraudster economist Benjamin Zycher who also hangs his hat at Manhattan. Now of course there’s the actual evidence from both other countries and the recent reports from Lewin (a group that actually does real research and doesn’t just make stuff up to suit its agenda as its business depends on it being perceived as unbiased) that shows that single payer health care would be cheaper. But why worry about the truth. Zycher just throws in random irrelevancies to claim that that’s not true. And you can read his stuff in detail at Manhattan.

And the biggest piece of BS he throws in is that collecting taxes is a drag on the economy as are taxes themselves. It’s probably tough for Zycher to explain why the economy grew faster in the three decades after WW2 when taxes were much higher than they do now, but let’s not take him to task over those little issues, when Paul Krugman is doing it so well.

Instead let’s put in something to his equation that he missed out. If you have an employer based health care system, you need HR people to spend time on health benefits. I know this, as I’m married to one such HR person. Let’s extrapolate from my wife’s company. There are roughly 1.5 FTEs looking after the health benefits of roughly 300 people. That means 0.5% of the workforce is dealing with administrative costs that would not be there in the case of a government based system.

Last time I checked there were 110 odd million Americans in the workforce, which means roughly 500,00 people doing HR health adminstration. So lets do what Zycher does and make stuff up. Let’s say the average loaded salary for those people is $75K, which gets us to about $37 billion in salaries. (I’m not going to throw in the cost to employers of non-HR employees dealing with their own health plans but I could—it’s considerable).

So where is that number in Zycher’s brilliant analysis. After all, there aren’t people doing that job in Canada, are there? I fail to see it in his anlysis there, but he does announce that even with savings from single payer covering some of the uninsured, the difference would still leave a shortfall of $21 billion. Well hang on I just found nearly double that difference for him.

Now of course I’m just making this stuff up back of the envelope. And I’m not even a proponent of single payer. The major difference is that I don’t get funded by Mellon-Scaife et al to sit in an “Institute” doing this stuff all day, and don’t have a direct line to the op-ed column in major newspaper.

But at least when I see crap masquerading as “truth” I can call it out.

Share  Posted by Matt Holt at 7:32 PM | Permalink

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