Arnold Kling and Scott Sumner both advocate a return to decentralization and federalism-based policies. I particularily like this paragraph from Kling:
I would like to see more experiments and more variety. Instead of having a big national contest over what health care system, why not try single-payer in one part of the country and radical deregulation in another? Switzerland, which is about the size of Maryland, has different health care systems in each of its 20-odd cantons, which are about the size of Maryland counties. Surely it must be possible to try different health care approaches in Texas and Massachusetts.
I do not see what is unreasonable about this. One may say that this would lead to potentially devastating situations in states that took a more decentralized approach, but even if this were true, those peoples could move to a state that offered a more centralized approach if they felt that would benefit them.
Also, Sumner implies that comparing the United States to smaller, far less diverse and complex countries like Denmark and Switzerland is a mistake. I think it is safe to say that it gets exponentially more difficult to centrally plan for a country as it gets larger. Thus, the argument that the US should centrally plan health care because smaller countries do it effectively is a backwards statement. We shouldn't centrally plan precisely because these smaller, less complex nations are competent at it.
UPDATE: Here is Reason's Peter Suderman's take on Kling's post:
I'm obviously wary of socializing medical payment, even at the state or local level. But given the opportunity to see single payer compete against a genuinely deregulated market, I'm pretty sure I'd bite. And I suspect a lot of single payer supporters would too. But that sort of political competition isn't in the cards. Instead we're stuck with a broken, compromised system in which neither side gets what they want: On one hand, the government controls nearly half of all medical spending, but failures get blamed on the free market. On the other hand, those who want to sweep away the current system and socialize medical insurance get stuck with messy legislative compromises larded with handouts for special interests. You could make the Beltway centrist's case that this is a good thing—that political systems shouldn't cater to extremes. But in this instance, we've got a system that's catering to almost no one [emphasis mine -ed.] And in the meantime, we're stifling innovation and experimentation on both ends of the political spectrum.
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Not that this is at all relevant..... but, http://arnoldkling.com/pix/ohevet.mov
ReplyDeleteOn a more relevant note, Switzerland does not have "single-payer in one part of the country and radical deregulation in another." I understand that Kling is not directly claiming that, but that's the subtext and it's downright deceitful! Switzerland has federal policy that reaches far beyond the proposals in the American Senate and House (for starters a universal mandate; http://en.wikipedia.org/wiki/Healthcare_in_Switzerland). Another example of a country with broad healthcare mandates from the Federal Gov. that leaves the specifics to the state/province is Canada.... We've talked about this before and free market zealots aren't a fan of our neighbors to the north and their cheaper better healthcare. The key here is you can't enact a policy that only works on a large scale state by state. Free rider problems abound, not to mention statistical and probabilistic realities of insurance.
I will agree that compromise hasn't yielded much, but I think that's because American's right wing is to the right of any other developed country in the world, which drags the center... off center.
Kling's point is that competition, in all spheres, reveals the best solutions in the fastest time. Government is not exempt to this truth. Applied to government, this idea used to be called federalism. Unfortunately, judging from Obama's SOTU and the Democrats in Congress reaction to it, liberals seem to want to eschew such language from our vocabulary.
ReplyDeleteOn Canada, simply saying it is "better" (whatever that means) doesn't make it so. You need to convince me. I've heard this claim for about two years now (the amount of time I've been following health care debate closely) and have yet to be convinced.
Secondly, as I mentioned, I'm not sure I see the benefits in comparing the United States to a country that has 1/10 the population and a far more homogenous people.
Finally, please elaborate on the free-rider contention. As far I'm concerned, the biggest problem in our current system is the three party subsidization system currently in place. If that isn't a free-rider issue, I don't know what is.
If you're not convinced that Canada's health care system is better you're not looking.
ReplyDeleteI agree we don't know how the geography, population, and culture of American would mesh with the social-democratic model. However, Canada is not a homogenous population at all. There are vast differences between different regions (just ask Torontoians what they think about BC, Quebec, or Ottowa). You can choose to ignore the facts about Canadian health care or explain them away through National differences, but they are still facts.
As to the free rider problem I mentioned, you are correct that our current system only enforces free riding, however a system that garauntees healthcare regardless of prexisting conditions (I'm not actually sure if you are personally for this, but the vast majority of Americans are and it's the one thing Republicans and Democrats seem to agree on) will ensure that people wait until they are sick to take advantage of health care unless there are incentives to sign on when they are healthy.
Finally a free for all, state by state system would encourage a race to the bottom of deregulated health care. If I can get cheaper health care in NY than MD I'll buy it without knowing the true value. Most people (and many docotors) are not well informed on statistical public health risk probabilities and what procedures, tests, or treatments provide more value than they cost. I'm not saying the Government should be the final arbiter that decides what is good for me, but the market is certianly not well equiped.
You are again avoiding the question. As David Kujan once commanded Verbal Kint, "Convince me." Make a seperate post of it if you'd like. But simply saying, "The facts are there and if you don't see them you're an idiot!" doesn't advance our discussion very much. Your making quite the claim. So defend it with the facts you speak of and the analysis you are capable of.
ReplyDeletePersonally, I wouldn't be able to make such a case as I lack the knowledge. What I do know is the free market is by far the best institution we have to relay information, coordinate transactions, and foster competition. This works for everything from the production of toasters and iPhones to the provision of accounting services. Why the rules are suspended for the health care market is a question I have yet to hear a legitimate answer to.
I don't know what your point is about free-riding and the denial of preexisting conditions. I made the point about the so-called "death spiral" three months ago in a seperate post (yes, even before Krugman!). It's just another example of the fundamental subsidization problems that are the biggest issue with the current system.
I find your final paragraph very strange. You think a less regulated market will obscure the true value of the final product? If you actually believe this you really need to read some more Mises and Hayek.
Race to the bottom is a loaded, ideological term. I think what you are looking for is "competition". Competition, not subsidization and increased regulation, is exactly what this market needs. That will clear up the murky price problem and allow consumers and suppliers to determine what is best for themselves. Just look at the Lasik eye surgery and Allied Health Care markets. Or for that matter the market for food, computers and vehicles.
Vehicles and food are heavily regulated industries becuase they pose health risks to the public. Lasik is notorious for not disclosing information to the customers and causing litigious aftermath.
ReplyDeleteI certainly didn't mean to call names and I'm not saying you're and idiot by any means. If you want to find out about Canada's health care system there is plenty of information. You just simply aren't digging for it. I'll try to come up with some of the books or articles I've read, but I contest that the burden of learning is mine more than anybody elses.
Sidebar...
The goal isn't to say, well you didn't show me so it must not be true. The goal is to understand the picture. That takes real digging into the data, not just rehashing blogs (Not an attack on you personally Will, I talk about krugman's or Brad Delong's views a lot). Back from the philosophical sidebar...
While no single set of data is exempt from flaws the whole picture is pretty clear. The social democratic model of health care produces better (or at least as good) health care at a cheaper cost and surveys show that citizens are often happier with their level of care.
My point about the free rider problem is when states implement various types of healthcare some will inevitably do it incorrectly and then throw up thier hands in desperation saying health care reform can't be done. Just because it wasn't done right doesn't mean it can't be done.
That being said, I'm certainly not a health care economist, and this is a whole field of study that people get their phd's in so the jury is still out on much of it. However, by most metrics our system gets the really poor bang for the buck. If you want to make the argument that less regulation would improve that, be my guest, but there is little emprical evidence and the theory seems shaky. It gets even shakier when the argument is made that deregulation would be EVEN better than other country's models that we can see stack up well against our current system. Just saying "competition works" doesn't make it so. Consumers don't have perfect information, demand curves are steap, and there are enourmous natural monopoly barriers. To just say "free markets have at it" is assuming the can opener.
Fair enough.
ReplyDeleteI love this guy
ReplyDelete