Economists’ Advice to Obama on Health Care: Ignore Economics
I must have slept through my Econ 101 course that day…the day when the professor and the textbook explained that you get efficient production…by…creating a government commission to discover the best techniques and then ordering all the workers to follow the government’s direction.
But no…I went back and checked a few introductory econ books: Samuelson, Gwartney and Stroup, Mankiw, and Krugman. And this idea is actually not in any of them! Readers, help me out. Where can I learn more about this unorthodox approach to efficiency? In a textbook on sociology? Psychology? Astrology?
Anyway, this is what 23 economists, including two Nobel Prize winners (and our good friend Uwe Reinhardt!), are advising President Obama to do in a recent letter. New York Times story here.
Also, see the post below.
“Trust Me”
Say it ain’t so Uwe!
I’m not surprised. Plus there are a lot of economists there who don’t know anything about health care.
I seem to remember reading something about this in “Das Kapital: Kritik der politischen Ökonomie.”
But I thought that book was now regarded as ancient history, rather than valid economic theory.
Good heavens! Did I sign such a letter? What must I have been thinking — or drinking, or smoking?
I would never, even in my most drunken stupor or most exquisite high, argue that, say, a U.S. Marine Corps platton is a match for a bunch of heroes from the privately owned, for-profit Blackwater (or whatever it is called now), which is efficiently managed, as the Marines are not.
It’s why Marines are such losers, guys!
Think about it. They are a purely socialist organization. All their productive assets — M-4s, SAWs, LAVs, tanks and cannon, etc — are owned by the government, and the Marines themselves are government employees without stock options or bonuses.
Furthermore, in the Corps officers eat last, which is a purely socialist gesture by an effete elite towards folks with lower socio-economic standing. I know that during the invasion in my son’s platoon the officers gave their flak jackets to the enlisted men, because there was a shortage of flak jackets. Can any one see an efficient corporate executive do that for lower rank employees? It would not be efficient.
No wonder we are not winning in Afghanistan. Bring home the Marines, and send in AIG or Lehman Bros. (what’s left of it).
So, I am sorry I signed that letter John. Really sorry.
Best wishes to y’all,
Uwe
The reason Erik Prince started Blackwater is that he figured he could do a lot of what the government was doing–training and development–better and cheaper. The military apparently agrees that private sector can do a lots of stuff better and cheaper, that is why it uses so many contractors.
Like the Marine officers, there are lots of private sector business execs who put their people first during this recession, took pay cuts to do it.
What I love about the letter is that its signatories say they will pay doctors for delivering better care even though they can’t define or measure it.
Are we sure this letter is about health care and not anthropogenic global warming?
If it makes you all feel better, at NCPA functions, I always eat last.
Presumably Linda would prefer to abolish the Marines, if they really are more inefficient in combat than Blackwater.
I wonder why she did not have the temerity to say that.
Who said anything about combat? Plus, a lot of the Blackwater people likely are former Marines. Have you seen the Blackwater employment application?
There are good reasons why a monopoly on certain kinds of force seems to serve nation states well. Still, nation states with good combat forces seem to promote internal competition between different branches of their services. The best forces are known for their emphasis on meritocracy, not socialism.
In fact, meritocracies do not seem to be a distinguishing feature of socialist countries. And socialism is not a distinguishing feature of either an excellent militaries or an exemplary health care system.
It would be interesting to have a list of the specific technical details about health care that are such that one could reasonably expect that a state monopoly over the provision of care could be expected to increase efficiency, broadly understood.
[…] as previously explained, their recommendations have no connection to any economic principles taught in any economics textbook. They should be thought of as “wishful thinking,” rather than […]
Academicians and so called health care economists have little to contribute to the discussion or debate, and certainly not to helping find prescriptions to fix what is wrong with the health care system – their ideas are never original, and the data they are so fond of graphing certainly don’t demonstrate anything new. They get press because the media is so stupid. Talk to actuaries if you want the real scoop. Yes, that’s a plug.
Reform? Of course, but intelligent reform, not reform for reform’s sake, merely for the sake of “making history.” The proposals continue to patch symptoms without attempting to address the cause – the need is for a rational and relatively free market for setting health care prices. One of the most frustrating things is this continued idea that an Independent Medicare Commission will have any impact on true, real prices in health care when the stated purpose is to simply control the Medicare (and Medicaid) budget. If they are successful, they will have, indeed, controlled the level of a BUDGET, and have had no impact on the prices of health care services other than to make them GO UP by continually and illegitimately ratcheting down what those programs pay providers. But, they will have performed their political duty of controlling that budget, by golly, and what’s more important than that?