It's a Big Country

Cato's Michael Tanner warns that Democratic health care proposals "would radically increase government control over one seventh of the US economy, would increase taxes, destroy jobs, and slow economic growth, and most importantly would lead to worse health care for millions of Americans." A lot to chew over there. I see no particular reason to think these plans would destroy jobs or slow economic growth, but those would be good reasons to oppose a health care plan.

"Worse health care for millions of Americans," on the other hand, genuinely might be a price worth paying. After all, a proposal that have eight million Americans worse health care, improved health care for 120 million Americans, left 160 million Americans with about the same health care, and saved everyone some money would be a fantastic health care plan. One could also warn in ponderous tones that would lead to "worse health care for millions of Americans." It's a big country!

The "jobs" issue is one that I think doesn't get pursued enough. There seems to me to be decent evidence that labor market flexibility leads to employment growth. It also seems clear that America's health care system generates substantial labor market rigidities as people with medical histories need to maintain a seamless web of insured-ness in order to remain insurable. There economic costs here seem potentially quite large, but obviously you'd need some really smart people to take a look at it.

Comments

Re: A lot to chew over there. I see no particular reason to think these plans would destroy jobs or slow economic growth, but those would be good reasons to oppose a health care plan.

The "destroy jobs" part is absurd: our current eployer-funded system is what kills jobs, and the Right even admits it when they are touting HSAs and the like. It should be staringly obvious that if you take that burden off employers hiring will increase.

Posted by JonF | July 10, 2007 12:14 PM

Your numbers are screwy. The US is number 1 in the world in the patient satisfaction category. So, what about a health care plan that reduced the quality of care for 200-250 million people and increased it for 50-100 million?

Posted by ostap | July 10, 2007 12:15 PM

Surely some forms of national health care - single payer, notably - would destroy jobs in the health care sector.

But that's probably a feature rather than a bug.

Posted by John | July 10, 2007 12:24 PM

Of course, we should have totalitarian, big government healthcare. Why, it's your right!
And while you're at it, why not a guaranteed job at a guaranteed salary? Isn't that also your right?
Let's not stop there on our way to a workers' paradise....Let's mandate 10 weeks vacation for every employee and a minimum wage of $35. God knows they could use it.

Power to the people!!!!

Posted by Fred Jones | July 10, 2007 12:31 PM

ostap, i have no idea how people measure "patient satisfaction," but i have a very clear idea of how to measure "health outcomes," where despite spending massively more as a percentage of gdp than any other country, we are nowhere near number 1.

but unlike Fred Jones, at least you're trying.

Posted by howard | July 10, 2007 12:35 PM

howard, I hate to tell you this, but ostap isn't listening. And as for Fred Jones...well, the less said the better.

But FWIW, the reason I post comments is not to argue with trolls, but to get non-bullshit information out there. So good on ya!

Posted by Captain Goto | July 10, 2007 12:43 PM

The "patient satisfaction" talking point just makes me giggle at this point. What better way to come across like a used-car salesman than to boast about all the "satisfied customers"?

Posted by Steve | July 10, 2007 12:43 PM

There is absolutly no reason why institution of a national health insurance system would result in worse care for anyone. This is typical obstructionist BS.

Posted by Virginia | July 10, 2007 1:05 PM

The beauty of "patient satisfaction" as a metric is that it screens most of the uninsured out of the data set.

Posted by Dave L | July 10, 2007 1:06 PM

I think Matt may be getting at an interesting point. Because workers need to keep their jobs to have insurance for themselves and their families, it would seem that they are a lot less likely to leave their employment to take on entrepreneurial, self-employment risks. Without this, there's less innovation and a corresponding inability of this country to compete in the global market.

Posted by frobisher | July 10, 2007 1:15 PM

Regarding comment number 3 by John "Surely some forms of national health care - single payer, notably - would destroy jobs in the health care sector." I agree with his "feature, not a bug" comment, but would suggest that if it's insurance industry jobs he's talking about, they really aren't in the health care sector - which is part of the current problem.

Posted by BlueStreak | July 10, 2007 1:33 PM

frobisher,

Sounds good, in theory, but in reality the U.S. has the highest percentage of entrepreneurs among any first world country -- and most of those countries with far smaller proportions of entrepreneurs have some form of nationalized health care. I doubt worries about losing access to employer-funded health insurance stop a lot of entrepreneurs.

Some entrepreneurs who are laid off (not a small category) start businesses while being covered by COBRA; others are covered by a spouse's health insurace; still others work part-time at Starbucks for the health insurance; and finally some young entrepreneurs take a calculated risk and go without health insurance until they can get it set up at their new companies.

Posted by Fred | July 10, 2007 1:41 PM

frobisher:

Also, another point to consider is to what extent our partially for-profit health care system encourages entrepreneurship in the health care field. Plenty of start-up companies have been founded to develop new drugs, medical equipment, etc.; many surgeons and hospitals have developed and advertise new procedures as well.

Posted by Fred | July 10, 2007 1:45 PM

If providing healthcare for all Americans will dramaticall damage the US economy, doen't that imply that the US economy relies on there being millions of uninsured?

Why the fuck should I give a shit about an economy that requires I be uninsured?

Posted by Tom | July 10, 2007 2:13 PM

Fred,

Those are good points. However, just because the U.S. has the highest percentage of entrepreneurship doesn't mean that it couldn't be higher. And you may have your doubts about the lack of health insurance being a barrier to entrepreneurship, but I simply don't know.

Also, about COBRA, the no longer employed entrepreneur pays the entire premium. Combined with the loss of income, the burden of premiums that amount to several hundred dollars monthly appears to me to be a significant hurdle.

The partially for-profit health care system may indeed encourage entrepreneurship. However, if the incentive for innovation and risk taking is generated by significant inefficiencies (the administration of health care, for example), is this desirable?

Posted by frobisher | July 10, 2007 2:18 PM

I left the following comment over at Washington Monthly (which is linking to this post), but it was deleted. Thankfully, it applies here and throughout the "progressive" blogosphere as well (except hopefully MattY won't delete it).

~~~
It's odd how those who promote UHC tend to either ignore or handwave away ImmigrationRelated issues, as if the MexicanGovernment wouldn't throw a week-long party if it ever passes.

[Note: WM has a habit of deleting or editing comments without notice, so this comment may differ from what I posted.]
~~~

Posted by TLB | July 10, 2007 2:44 PM

There is absolutly no reason why institution of a national health insurance system would result in worse care for anyone.

Of course there is. It is obviously plausible that "a national health insurance system" would result in worse care by producing shortages and waiting lists, as it does in countries that already have such systems.

Posted by Mixner | July 10, 2007 3:37 PM

The beauty of "patient satisfaction" as a metric is that it screens most of the uninsured out of the data set.

No it doesn't. Most of the uninsured are patients too. "No insurance" does not mean "no health care," and the absence of insurance is typically a short-term condition of a few months anyway.

Posted by Mixner | July 10, 2007 3:43 PM

One of the reasons companies don't want to hire people is because they take on their medical care, so universal health care would make it easier for companies to hire people. It would make it easier for small businesses to grow, because they wouldn't be at a health insurance disadvantage against big companies. Lastly, American auto companies wouldn't be stuck with the enormous liability of retiree health care, so you'd save some American jobs right there.

Posted by American Citizen | July 10, 2007 3:44 PM

mixner, what makes you think that for most people without health insurance, we're talking about a few month condition?

and on what basis can you possibly claim that there are no shortages and waiting lists in the current mixed American health-care insurance system?

my sister dropped dead of a heart attack a month ago; one of my first reactions was to attempt to schedule a stress test. Even though i belong to a generally satisfactory (to return to an earlier point) HMO, the first opening was in 6 weeks.

Posted by howard | July 10, 2007 4:00 PM

howard,

mixner, what makes you think that for most people without health insurance, we're talking about a few month condition?

Government statistics.

and on what basis can you possibly claim that there are no shortages and waiting lists in the current mixed American health-care insurance system?

I didn't claim that. There are far worse shortages and waiting lists in countries with "national health insurance systems."

Posted by Mixner | July 10, 2007 4:04 PM

perhaps, mixner, you could show us those government statistics.

and perhaps you could show us how you know there are worse shortages and waiting lists in countries with "national health insurance systems." after all, if all is so beautiful with the american system, why aren't our health outcomes better?

Posted by howard | July 10, 2007 4:06 PM

One of the reasons companies don't want to hire people is because they take on their medical care, so universal health care would make it easier for companies to hire people.

Given the low unemployment rate in the U.S. compared to most countries with universal health care, this doesn't seem to be a very strong argument for emulating them. Whatever adverse effects on employment arise from the direct health care cost burden on employers, it seems likely that they are outweighed by other effects arising from the absence of universal health care (lower taxes, for example) that serve to stimulate employment.

Posted by Mixner | July 10, 2007 4:11 PM

mixner, while we wait for your government statistics, perhaps you could explain why, if the cost of health-care coverage isn't a burden to employers, we keep seeing the percentage of jobs with health-care insurance as a fringe benefit declining and the out of pockets increasing?

and if you use not unemployment rates calculated on different standards with changing definitions but rather the ratio of jobs to job-age population, the gap isn't nearly as large between the US economy and those economies as you suggest.

if, after all, lower taxes were serving to stimulate emloyment, why did we average some 300K new jobs per month in the last expansion compared to roughly 1/3 that in this expansion, given that taxes have been lowered compared to those that obtained in the '90s.

and, of course, in no other advanced democracy does anyone have to live with the fear of a medical-cost induced bankruptcy, which doesn't show up in gdp (but then again, the reason that "we the people" formed the united states wasn't to achieve the highest gdp imaginable but "to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare" and those sorts of things.

and that's before we turn to types of jobs: i'm all for creative destruction, but as any US auto executive will tell you, we are losing jobs in that industry primarily (not exclusively) because of the cost advantage that foreign car manufacturers have on health insurance. in the place of those jobs, we are doing a grand job creating lower wage, benefit-free service jobs (like in bars and restaurants).

Posted by howard | July 10, 2007 4:24 PM

"No insurance" does not mean "no health care," and the absence of insurance is typically a short-term condition of a few months anyway.

Mixner continues with the con-job of conflating heathcare with healthcare funding and billing. Is Mixner convinced that absent the billions in profits made by Big Insurance, doctors would turn into quacks?

On Matt's point, and following howard, the US is good at creating jobs for the manufacturers of collection jars to collect change for those who accrue massive healthcare bills.

Why the fuck should I give a shit about an economy that requires I be uninsured?

Precisely. It's an economy that implicitly tells people to know their place, and reduces healthcare to 'a calculated gamble'. Welcome to Vegas.

Posted by pseudonymous in nc | July 10, 2007 5:33 PM

Also, just think of the number of entrepreneurs who'll lose jobs in the foreclosure property speculation business if people no longer turn in the keys to their homes because of medical bills! Or the number of quacks who shill supplements on infomercials who'd be put out of work if you didn't have to worry about seeing a doctor!

Posted by pseudonymous in nc | July 10, 2007 5:35 PM

Re: The US is number 1 in the world in the patient satisfaction category.

Which has about as much to do with health insurance as if you concluded that people who say they like their cars also adore their auto insurer.

Re: Surely some forms of national health care - single payer, notably - would destroy jobs in the health care sector.

How? People will still need healthcare. In fact, with everyone covered there will be more demand.

Re: It is obviously plausible that "a national health insurance system" would result in worse care by producing shortages and waiting lists, as it does in countries that already have such systems.

There are shortages and waiting lists already in case you just landed from the Planet zOz.

Re: Whatever adverse effects on employment arise from the direct health care cost burden on employers, it seems likely that they are outweighed by other effects arising from the absence of universal health care (lower taxes, for example) that serve to stimulate employment.

Good grief, are you math illiterate? The US healthcare system costs MORE per capita than other systems do!

Posted by Jonf | July 10, 2007 7:33 PM

Re: Surely some forms of national health care - single payer, notably - would destroy jobs in the health care sector.

How? People will still need healthcare. In fact, with everyone covered there will be more demand.

A lot fewer paper pushers would be employed-- I think someone already pointed out that they're only marginally in the health care sector anyway-- which IMO is all for the better, since they're frequently insufferable anyway.

Posted by latts | July 10, 2007 7:46 PM

I think that there is a seriuos issue about the US healthcare system that is not being addressed. As costs rise it becomes more and more attractive to outsource health care. It is far cheaper to fly to India for a hip replacement than to have it done in the US. With today's technology remote diagnostics are a real possibility and actually a reality. All you need is a nurse practioner and a satellite link to get quality health care. Talk about job loss in the US. The health industry is driven by profit and this appears to be a logical outcome. This obviouly does not impact emergency care to the same degree but I wouldn't invest in a medical degree in the US.

Posted by Seth Chamberlain | July 10, 2007 8:53 PM

There are shortages and waiting lists already in case you just landed from the Planet zOz.

I don't know about *shortages* but you probably would see some fairly reasonable extension of the time you spend on a waiting list for elected surgery. You bring in the currently uninsured and yeah, something will have to give there.

Posted by Ed Marshall | July 10, 2007 8:58 PM

Says Mixner:

"Of course there is. It is obviously plausible that 'a national health insurance system" would result in worse care by producing shortages and waiting lists, as it does in countries that already have such systems.'

And, in response to an earlier question: "mixner, what makes you think that for most people without health insurance, we're talking about a few month condition?" Mixner replies:

"Government statistics."

Mixner, if you want credibility, substantiate your claims. Which statistics, published where, by whom? You're talking about shortages and waiting lists: where, who says, where's the link, what study are you referring to?

You're the king of unsourced claims and "truthy" sounding (but unsupported factually) allegations. can you substantiate those claims? We're waiting...

Posted by dougR | July 10, 2007 9:29 PM

dougR, as the person who posed the question to mixner, i actually spent a little bit of time hunting around to see what he might possibly mean, and i couldn't come up with anything.

which is no surprise, since logically speaking, it makes no sense. there are said to be, give or take 40+M without health insurance. if we are to believe that for most of them of them, this is a few-month occurence, then we'd have to believe that over the course of a year, somewhere between 80M and 120M (if a few meant six or four months) went without health insurance for some period of time.

which, frankly, would be even worse than what we know to be true, but precisely because the numbers are so large, we can be pretty damn sure it isn't.

Posted by howard | July 10, 2007 10:06 PM

Yeah, Howard, I'm actually curious if these kinds of claims have any statistical basis at all, or if they're built on one of those trick formulations like "When Bill Gates walks into a crowded bar, the mean net worth in the bar shoots up to eight skillion dollars per person."

However, I'm sure Mixner is about to clear it all up for us with some factual citations. He wouldn't just pull this stuff out of his kahootie...would he?

Posted by dougR | July 10, 2007 10:36 PM

Well, I had a post with citations and all, but Matthew has some kind of filter turned on and it told me that my comment was waiting for approval. I don't feel like typing the whole thing again. Maybe it'll show up tomorrow.

Posted by Mixner | July 11, 2007 12:39 AM

Given the low unemployment rate in the U.S. compared to most countries with universal health care, this doesn't seem to be a very strong argument for emulating them.

US unemployment rate 2006: 4.8%
Australian unemployment rate 2006: 4.9%
Ireland unemployment rate 2006: 4.3%
UK unemployment rate 2006: 2.9%

All statistics (bar the Ireland one) from the CIA World Factbook. Oh - and Ireland has lower taxes than the US. And Australia has the lowest government debt of any western nation.

Posted by slightly_peeved | July 11, 2007 3:30 AM

Somebody now quickly post the unemployment rates of France and Germany.

Posted by Fred Jones | July 11, 2007 7:40 AM

Early on, (a) Fred claimed that the US has the highest entrepreneurship rate of any developed country

- well actually no

This is a bit dated but it is clear that the US actually has one of the lowest rates of self-employment of any OECD country, and lower than France or Sweden, for example.

http://www.oecd.org/dataoecd/10/44/2079593.pdf

Posted by Disinterested Observer | July 11, 2007 9:23 AM

I'm glad disinterested observer posted the link to that OECD data because it's exactly the kind of thing that shows reality is 180 degrees from what free-market obsessives, like the Freds, think it is. The percentage of the population in Canada that is self-employed is double that of the USA. Having assured health coverage frees up the entreprenurial instead of discouraging them.

Posted by SteveH | July 11, 2007 10:19 AM

"This is a bit dated but it is clear that the US actually has one of the lowest rates of self-employment of any OECD country, and lower than France or Sweden, for example."

Yeah, but some of that is grey economy effects: look at the self-employment rate in Italy (>20%).

However, I'm sure Fred will be along right now to argue that the lower rate of self-employment in the U.S. is a function of how happy U.S. employees are with their lot.

Posted by Sock Puppet of the Great Satan | July 11, 2007 10:22 AM