To Control Health Care Costs, Spend More Money

Alex Tabarrok has an excellent post today at Marginal Revolution on why we shouldn't spend a lot more money on such infrastructure projects as roads and bridges. (But a smart electric grid system might be worthwhile.)

By contrast, Jon Gruber, writing in the New York Times, says the best fiscal stimulus is spending more money insuring the uninsured. How much more? "Perhaps $100 billion a year or more." Confused? Try this:

In the long term, the greatest fiscal threat facing this nation is the growth in the costs of health care…

Yet cost control would be easier in an environment of universal coverage.

Go figure.

Comments (5)

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  1. Joe S. says:

    Let’s see. Patients pay 13 cents out of each dollar of health care spending out of their own pockets. So they should be spending on care until it’s worth 13 cents on the dollar, at the margin. And Gruber wants to spend how much more?

  2. Thadeus says:

    This reinforces a long held view of mine — one that I share with Dr. Goodman. When people start thinking about health policy their IQs fall about 15 points.

  3. Bruce says:

    Gruber’s thesis is pure hogwash. In no way are the uninsured keeping the government from controlling costs for everyone else.

  4. Ken says:

    Tabarrok’s post is worth reading. Apparently, infrastruture spending is a boondoggle. So says Peter Orzsag at the CBO.

  5. Dan Smith says:

    I’ve been poring over the Gruber article, trying to do the math, and I’m stumped. We expand the number of people eligible for health insurance paid for by a third party, increase the number of health care workers but somehow spend less on health care in toto. Must be something in the air in Cambridge that permits that kind of mathmatical wizardry. But what really got my attention was the proposal to replace those inefficient primary care doctors with physician extenders gleaned from the ranks of the unemployed. Now there’s a thought: my new PCP will be 12 months removed from the GM assembly line where he used to attach windshield wipers to Hummers.