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Taking Out The Trash-Talk

Nov
13
2007

I’m not too worried that a Republican will actually win the White House in 2008. But I am worried that efforts by what I confidently believe will be a Democratically controlled White House to reform the U.S. health care system will founder on the free-marketeers devotion to faulty statistics, unsound analysis and, well, lying.

It’s not a new problem. But it’s one that’s increasingly difficult to combat.

Want a good example of the high-minded nature of the debate? A few weeks ago, Republican presidential hopeful Rudy Giuliani started running commercials in New Hampshire claiming that British men who got prostate cancer were, metaphorically, being summarily shot by firing squads. The low survival rate of those Brits was proof that the evil that is socialized medicine – if brought to these fair shores by careless Democrats – would mean an equivalent end for us.

Now, Giuliani been roundly criticized for his data manipulation. Even the British government got involved this time, explaining that the data he was using was wrong. But the Canadian free-marketeer advising Giuliani – the guy who supplied the soundbite statistics, David Gratzer – is bravely not backing down!

Clearly, we haven’t heard the last of this sort of garbage.

Another example? While the Giuliani Data Debate was being waged, the Wall Street Journal ran perhaps the biggest piece of intellectual rubbish seen in some time based on a study by economist Benjamin Zycher who, like David Gratzer, also hangs his hat at the conservative Manhattan Institute.

The claim the WSJ advanced is that single payer health care (i.e. where the government pays all the bills as with Medicare or in Canada) would be more expensive overall than the current system.

Now of course there’s the actual evidence from both other countries and the recent reports from The Lewin Group (pdf) that show that single payer health care would be cheaper. You might note that Lewin is a consulting group in business – not dipping a random toe into politics – to give unbiased advice and counsel. By contrast – and this is where the trouble starts – Zycher just throws in random irrelevancies that muddy the debate, arguing that the savings from single payer are not enough to cover the uninsured, and that a difference of $21 billion would have to be found by the taxpayer to cover everyone – despite savings from lower administrative costs.

Perhaps the biggest irrelevancy that Zycher uses to make his numbers work is his claim that both taxes and their collection are a drag on the economy. With that logic, it’s probably tough for Zycher to explain why the economy grew faster in the first three decades after WWII when federal taxes of all sorts were much higher than it has since the 1980s, but let’s not take him to task over those little issues.

Instead let’s put in something he’s missed – a real cost to the economy – into his equation.

The U.S. has an employer-based health care system. Employers therefore need human resource (HR) administrators to manage corporate health benefits. One small company I know well (because my wife is their HR administrator) has roughly 1.5 full-time employees looking after the health benefits of around 300 people. That means 0.5% of the workforce is dealing with administrative costs that would not exist if there were a government-managed system. Last time I checked there were 110 odd million Americans in the workforce, which means back of the envelope 500,000 Americans are doing health administration for employers.

So now I’m going to do what Zycher does and start throwing around the data to see what sticks to re-enforce my already finely crafted argument. Let’s say the average loaded salary for those people is $75,000. That gets us to about $37 billion in salaries.

Remember Zycher’s shortfall of $21 billion? Well hang on, I just found nearly double that difference for him <again, context>. So where is that $37 billion number in Zycher’s brilliant analysis? After all, there aren’t people doing that job in Canada, are there? It’s not there of course.

I’m making this stuff up back of the envelope to demonstrate a point not about single payer systems – which I don’t advocate – but about the argument over health care reforms. Unlike many of those who will attack the plans that are put forward, I don’t get funded by the great right-wing conspiracy and sit in an “Institute” doing this stuff all day long.

Unfortunately, when – as it currently seems likely – Sen. Hillary Rodham Clinton gets into the White House, you can expect a barrage of the kind of “studies” coming out that Giuliani, Gratzer and Zycher favor. Which will then be passed along direct to the body politic and the mass media.

And that’s why we have to call them out as utter nonsense now.

Share  Posted by Matt Holt at 8:29 AM | Permalink

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