Quote of the Day by John Kerry, and Other Links
Quote of the day: “Spying on allies is not unusual,” John Kerry.
Who pays for contraceptives if a faith-based employer won’t? You do. That’s “you” as in “taxpayer.”
Tag: "Health Care Costs"
Jul 01, 2013 | 12 comments | by John Goodman
Jun 28, 2013 | 8 comments | by John Goodman
The Case for Legalizing Drugs
Prohibition of drugs has not been effective at eradicating their use. As the global drug trade continues to thrive, developing countries pay most of the price. The cost to them not only includes law enforcement, but the violence and corruption associated with the drug trade, which undermines economic development and keeps millions in poverty. A better use of resources would be to treat drugs as a health problem, and legalize and regulate the use and sale of drugs. That would probably make richer countries better, or at least no worse, off, and improve the lot of developing countries.
The U.S. spends more than $40 billion each year on drug prohibition. But that is just the explicit cost. The implicit cost: increased violence, otherwise productive citizens in prison, and perpetual poverty, both at home and, especially, abroad. Countries mired by the violence and corruption associated with the drug trade might otherwise be viable trading partners, with the money spent on drug interdiction better spent on other means. According to the World Bank, at least three-fourths of expenditures on drugs in the U.S. goes toward apprehending and punishing dealers and users; treatment expenditures account for, at most, a mere one-sixth of the total. That’s in spite of evidence that treatment programs are more effective and economical than interdiction.
Jun 28, 2013 | 19 comments | by John Goodman
Why Are The President’s Priorities the Opposite of the People Who Elected Him?
This January, as President Obama began his second term, the Pew Research Center asked Americans to list their policy priorities for 2013. Huge majorities cited jobs and the economy; sizable majorities cited health care costs and entitlement reform; more modest majorities cited fighting poverty and reforming the tax code. Down at the bottom of the list, with less than 40 percent support in each case, were gun control, immigration and climate change.
Yet six months later, the public’s non-priorities look like the entirety of the White House’s second-term agenda.
Source: Ross Douthat.
Jun 27, 2013 | 10 comments | by John Goodman
Jun 27, 2013 | 11 comments | by John Goodman
So This is What a Ponzi Scheme Looks Like
The unfunded liability in Medicare, the trustees tell us, is $34 trillion over the next 75 years. Looking indefinitely into the future, the unfunded liability is $43 trillion — almost three times the size of today’s economy. Based on more plausible assumptions, such as those reflected in the “alternative” scenario for Medicare produced by the Congressional Budget Office in June 2012, the long-term shortfall is more than $100 trillion.
From an editorial by Larry Kotlikoff and me in the Wall Street Journal today.
Jun 25, 2013 | 14 comments | by John Goodman
Privatizing Primary Care in Britain
The problem:
Two thirds of the U.K.’s National Health Service patients have to wait more than 48 hours for a doctor’s appointment and few slots are available outside regular work week hours.
The solution:
A private doctor’s surgery…is attracting thousands of patients who have given up on the [NHS]. Open seven days a week, usually until 11pm, the clinic gives half-hour appointments, which is three times longer than usual. Despite charging £70 ($109) a visit, it already has almost 6,000 Britons on its books. Customers are welcomed into the spotless and modern center by friendly receptionists whose motto is to “put patients first.” (Daily Policy Digest/Daily Mail)
Jun 21, 2013 | 11 comments | by John Goodman
Malpractice Law vs. ACOs
One thing almost all economists seem to know instinctively is that there is a tradeoff between spending on health and safely and other uses of money. Because of this, it would never make sense to make something “as safe as possible.” Because of diminishing returns, there will always be a point where the marginal increase in safety is not worth the sacrifice of other goods and services that could be purchased with the same money.
This is not the way ordinary people think, however. Or judges. Or juries. Or the voting public. To most economists, the way ordinary people think is not thinking at all. But let’s not let that observation cause us to make other mistakes.
An article in JAMA summarizes the problems Accountable Care Organizations (ACOs) are going to have this way:
[W]hether ACOs or not, health systems are exposed to institutional liability related to medical malpractice. How big of a divergence is ACO liability from the existing forms of institutional liability common to health systems? The key difference is the introduction of a new dimension of medical malpractice liability that goes hand in hand with the cost containment charge: the claim that the ACO’s actions or policies prioritized cost savings over patient safety, contributing to the plaintiff’s harm.
This caused Aaron Carroll to say, “Stuff like this makes me despair for cost containment at all.” Agree. But remember that the incentives of the ACOs will be perverse. As I explained in Priceless and in other venues, managed competition encourages health plans to over-provide to the healthy and under-provide to the sick. So their decisions are unlikely ever to be optimal.
What I never see from Aaron or Austin or any other bloggers at the Incidental Economist is how they would deal with these perverse incentives. And don’t (as the JAMA article did) tell us evidence-based medicine will be a safe harbor. That way out is unreliable and it doesn’t have any mechanism for insuring the appropriate tradeoffs will be made.
Jun 20, 2013 | 11 comments | by John Goodman
Health Wonk Review
The latest edition of the Health Wonk Review is up. “Rhetorical Question Edition” at Wing of Zock covers such topics as such costs, insurance, policy, money, and more.
Jun 20, 2013 | 10 comments | by John Goodman
