Tag Archives: Paul Krugman

Privatize #Medicare? The success of Medicare Advantage (Part C)

Health care economist John C. Goodman writes:

Paul Ryan proposed a private health insurance alternative to Medicare for future retirees, liberal critics pounced. It’s another scheme to undermine health care for the elderly by “privatizing” and “voucher-izing” the program, they said.

Yet, almost one third of seniors are already in private health insurance plans. They are called Medicare Part C, or Medicare Advantage, plans. And you would be hard pressed to find any Democratic office holder who wants to abolish them. The reason? Seniors choose to be in these plans because they like them better than traditional Medicare.

Read more: Let’s Privatize Medicare – John C. Goodman.

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The Veterans Health Administration Really Does Offer ‘Lessons’ in ‘Socialized Medicine’ #VHA

From Reason:

How could a bloated government bureaucracy achieve such low-cost success? As we found out recently, it’s by quietly sticking veterans on a waiting list and putting off their treatment for months-sometimes until the patients are far too dead to need much in the way of expensive care. Which is to say, calling it a “success” is stretching the meaning of the word beyond recognition. And, while the White House insists it learned from press reports about the secret waiting lists, Press Secretary Jay Carney acknowledges that the administration long knew about “the backlog and disability claims” that have accumulated in the VHA.

The article begins:

Just a couple of years ago, Paul Krugman pointed to the Veterans Health Administration (VHA) as a “huge policy success story, which offers important lessons for future health reform.” He gloated, “yes, this is ‘socialized medicine.'”

Read more: The Veterans Health Administration Really Does Offer ‘Lessons’ in ‘Socialized Medicine’ – Hit & Run : Reason.com.

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Krugman Flunks Health Econ 101

John C. Goodman writes:

It’s painful to read Paul Krugman when he writes about health care. Makes you wonder how he ever won the Nobel Prize. Previously, he made the absurd claim that in repealing health reform Mitt Romney would allow “tens of thousands” of people to die. In his latest venture into the field, about which he knows embarrassingly little, he has this to say …

Read more: Krugman Flunks Health Econ 101 | John Goodman’s Health Policy Blog | NCPA.org.

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Paul Krugman’s space aliens won’t create jobs, repealing health control law will

This article was printed in the Boulder Daily Camera on September 10, 2011 in response to this question:

What do you think will help decrease unemployment and underemployment? What role do you think the government can, or should, play in encouraging job growth?

Space aliens attack!  Nobel laureate economist Paul Krugman says we need scientists to “fake an alien threat.”   “A massive buildup to counter” the threat, real or not, would end the economic slump “in eighteen months,” he said. Dr. Krugman unwittingly shows how loony Keynesian economic “stimulus” schemes are.

As an EconStories rap explains: “If every worker was staffed in the army and fleet, we’d have full employment and nothing to eat. Jobs are a means, not the ends in themselves. People work to live better, to put food on the shelves. Real growth means production of what people demand. That’s entrepreneurship not your central plan.”

Repealing parts or all of last year’s health control law [HR 3590] would encourage real growth. One-third of small business owners sited the law’s requirements as the greatest or second greatest “obstacle to hiring more employees,” reports a recent U.S. Chamber of Commerce survey. Three of four business owners “somewhat agreed” that the law “makes it harder … to hire more employees.”

For example, the law compels employers to buy insurance for full-time employees.  In response, half of surveyed employers said they would “change their workforce strategy so that fewer employees work 30 hours or more a week,” reports Mercer consultants.

Is it merely coincidence that private-sector jobs growth stalled after health “reform” passed?  Economist James Sherk shows that in the fifteen months before “reform,” average monthly job growth exceeded 67,000 jobs. Since then, it has plummeted to around 6,500 jobs per month. Don’t blame alien abductions.

* * *
Thanks to Grace-Marie Turner for her article: Repealing Health Care Legislation Will Create Jobs, which led me to the health care bill references above.

Related, via FIRM, The Hill reports:

The medical device industry says it could lose 10 percent of its U.S. workforce because of a tax created by healthcare reform.

The Advanced Medical Technology Association (AdvaMed) released a report Wednesday that says device-makers might ship 43,000 jobs overseas once the tax takes effect in 2013.

Read more: Device-makers say tax will cost 43,000 US jobs.

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Debunking claims touting Medicare’s low admin costs & ability to keep prices low

John Goodman & Thomas Savings write:

The Physicians for a National Health Program, for example, claims that Medicare has lower administrative costs than private insurance and is able to use its monopsony (single-buyer) power to suppress provider fees. The group, which is resistant to managed care, favors “Medicare for all” and endorses a bill to do just that by John Conyers.

Paul Krugman, writing in The New York Times, also argues this way. He points to a chart (see Figure I) which seems to show that Medicare per capita spending is growing at a slower rate than private insurance. Krugman, along with others, touts the slower rate growth in the Canadian health care system (also called “Medicare”). In recent editorials, both Krugman and Robert Reich have joined the call for Medicare for everyone.

Are these unconventional critics right?

No.  Read the whole post: Is Medicare More Efficient than the Private Sector? | John Goodman’s Health Policy Blog | NCPA.org.

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Hey, Paul Krugman, patients should be consumers, not helpless pawns in an authoritarian politically-controlled health care system you support

Benjamin Domenech has an excellent response, as an open letter, to Paul Krugman’s recent column and blog post titled, “Patients are not consumers.” Some excerpts

Your column and blog contain a ludicrous and incorrect depiction of health care needs in America, painting a picture where visits with a medical professional are always preceded by a call to 911 and a trip on a blaring ambulance – which is the experience for approximately zero Americans, anywhere. I would be eager to learn of any of your research showing otherwise.

A simple glance at a cost breakdown of the American health care system eradicates your fanciful depiction. According to the U.S. Department of Health and Human Services and the Agency for Healthcare Research and Quality, as much as 75 percent of health care costs in the United States are due to chronic conditions. …

Your incorrect view of the nation’s health care reality is, in fact, one of the chief reasons for problems with the current system, which was originally designed in the 1930s to cover catastrophic events, not chronic conditions, predictable treatments, and long-term care. …

There is some irony in your mistake and in his, in that the government-managed coverage systems you favor are perhaps at their worst in providing responses to the life-threatening illnesses you apparently think all of us are faced with on a daily basis. …

via Consumer Power Report #269: A Letter to Paul Krugman – by Benjamin Domenech – Consumer Power Report.

See also this breakdown of medical spending on different types of treatment.

Are patients consumers?  In 2006, CBS News reported:

Like millions of Americans, Gary Garcia is shopping online, CBS News correspondent Wyatt Andrews reports. But he’s not on eBay or Amazon.com. Garcia needs a new heart valve, and he’s shopping for surgery.

Using a Web site called Health Grades.com, Garcia learns which nearby hospital is the best at heart surgery — and then, to his amazement, he gets an estimated breakdown of the costs. He gets the list price for his operation, the discounted price his insurance will pay and his estimated co-payment.

Check out the video, too.  Vimo.com provides similar information.  There’s also MediBid.com. Its site says:

Patients can find a doctor, family physician, chiropractor, dermatologist, surgeon, dentist, or any other medical specialist on MediBid.  The process is simple; patients register as “Seekers” and post a secure, private request for medical care for anything from acupuncture to total knee replacement surgery or stem cell therapy for cancer. … More than a medical directory, MediBid is a resource where medical consumers can find a doctor, then actively seek bids for the care they need. It gives physicians a direct connection to their patients.

And don’t forget about medical tourism, and North American Surgery, Inc., which offers US-only medical tourism. Is Krugman aware of this?

Krugman claims that “‘Consumer-based’ medicine has been a bust everywhere it has been tried,” but provides no evidence for this.  Has he looked at the successes of employers such as Land O’Lakes, Wendy’s, and Manitowoc County, Wisconsin?  Or how about the results of a study by the The American Academy of Actuaries: Emerging Data on Consumer-Driven Health Plans, which includes cost savings, containment, proper & preventive care, and evidence-based care.

Krugman also wrotes:

Medicare Advantage was supposed to save money; it ended up costing substantially more than traditional Medicare.

Not so fast.  A Pacific Research Institute study states:

“In a very narrow sense, Medicare Advantage plans cost more per beneficiary than traditional Medicare,” said [study author John R.] Graham. Medicare Advantage increases the total costs of Medicare by about $12 billion a year, or about 2 percent. However, because traditional Medicare (a government monopoly) does not pay providers enough to cover their costs, they shift costs to the privately insured. This imposes a “hidden tax” on privately insured Americans that accounts for $49 billion a year: four times greater than the narrowly defined extra costs of Medicare Advantage.

Krugman states: “America has the most “consumer-driven” health care system in the advanced world.”   Really?  One might measure this by how much patients spend on medical care “out of pocket,” that is paying directly with their own money rather than with cash.  At the Health Affairs blog, Thomas Miller and Rohit Parulkar write:

U.S. OOP share of health spending, as of the last comparative figures available from the OECD in 2008 (12.1 percent), was below that of Germany, Canada, and the weighted average of all reporting members, respectively.

Krugman also states: “It also has by far the highest costs yet provides a quality of care no better than far cheaper systems in other countries.”  Krugman provides no citations for evidence to this claim.  For a well-references discussion of the data, see:

  1. Health Care Reform: Do Other Countries Have the Answers?, by by John C. Goodman, Linda Gorman, Devon Herrick, and Robert M. Sade.
  2. Myth Two in “The Top Ten Myths of American Health Care: A Citizen’s Guide”, by Sally Pipes (purchase, or view PDF for free)

Stepping back from these details, ask yourself: So what if Americans spend too much on medical care?  Do you care if Americans spend too much on car repair?  No, because they are spending their own money, or, having paid car insurance premiums with their own money & made a claim, they are spending money from an insurance company. It’s a private matter, & no one else’s business.  Health care should be the same.  “Spending too much” is only an issue because of government policies that force us to pay for other people’s medical care.  (I think I’m paraphrasing Arnold Kling, here.)

Krugman concludes: “The idea that all this can be reduced to money — that doctors are just “providers” selling services to health care “consumers” — is, well, sickening.”  Krugman has also spoken well of “Medicare for all” and single-payer health care. But wait, back in 1999 the BBC reported that under England’s National Health System,

Up to 500 heart patients die each year while they wait for potentially life-saving surgery. … NHS patients are often put on a waiting list because of other pressures to health service resources. Only an “enormous injection” of cash could change the situation.

In 2008 a Daily Telegraph headline read: Patients ‘should not expect NHS to save their life if it costs too much’.

Shocking – under a single-payer system, people’s lives are just reduced to money!

See also “Diagnosing Krugman,” by Will Wilkinson. He writes:

[L]let’s examine Mr Krugman’s implicit premises. … whatever is [supposedly] crass and profane about patients exchanging money directly for doctors’ services is avoided if the patient-doctor relationship is brought within the matrix of politics. This seems odd to me …

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It’s Not Health Care ‘Reform’; It’s Exploitation

Pajamas Media has published my article on health care exploitation. It begins:

Scratch a health care “reformer” and you’re likely to find a health care exploiter. As ObamaCare’s provisions and taxes begin and resistance builds through lawsuits and state-level measures, it’s important to see the exploitative motives driving increased political control of your medical care. Health control advocates won’t stop with ObamaCare (HR 3590). “Once we kick through this door, there’ll be more legislation to follow,” said House Speaker Nancy Pelosi.

Whether health control supporters demand that all policies include certain benefits or that everyone must buy government-approved insurance or something like “Medicare for all,” the policies don’t follow from the alleged justifications for them. But they do follow from one motive: charity at gunpoint. That is, forcing you to finance other people’s medical care. This is exploitation.  It’s about time freedom advocates reclaim this term often misused by the left, as so-called health care “reform” is a clear case of exploitation.

Read the whole article: It’s Not Health Care ‘Reform’; It’s Exploitation.

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