Sunday, March 21, 2010

Bring on the Death Panels

Obama's Health Care package passes 219-212.

You know, despite all the talk we get about guns, foreign policy, and abortion, Health Care remains one of the largest value divides between Canada and the United States. Because the "leftist" and "socialist" Health Care bill the US passed doesn't even come remotely close to the "two tier" Health Care system the Liberals accused Stockwell Day of secretly wanting a decade ago.

So it's a step in the right direction, but it just illustrates the large differences between the two countries.

23 Comments:

  • It does, but not necessarily in a way that flatters Canada.

    It's revealing that the Democrats looked at the British, German, and Japanese healthcare systems as models to learn from, but not the Canadian one.

    The reality is that Canada has a pretty way-out system, not just by US standards, but by the standards of the entire industrialized world.

    By Blogger JJ, at 11:39 PM  

  • How do you like them apples Republicans!! Iggy should take the ideas from his Montreal conference and quickly blend them into a strong platform to sell Canadians, so we can once again see this type of progressive change here in Canada.

    By Anonymous Anonymous, at 12:42 AM  

  • There are 32 million people without health coverage in the US.

    Almost the entire population of Canada.

    I love it when the US republicans harp on about their christianity, ethic, morals and family values.

    Is it moral to deny health coverage to a person who needs it, but can not afford it?

    In my books the standard by which you should judge a country is by how it's poorest citizens are treated.

    US republicans should practice whay they preach.

    My hat is off to Mr. Obama, he has suceeded in doing something no other US president has suceeded at doing.

    I am happy for those 32 million who have no coverage, but will now be getting coverage.

    President Obama, is more moral, and ethical than those faux christian crackpot republicans, can ever hope to be.

    I wish we had Obama here, that is someone you can really believe in.

    By Anonymous Anonymous, at 1:07 AM  

  • ... and this bill will RAISE deficits by $562billion over 10 years.

    It will leave 21million Americans uninsured.

    It will weaken Medicare, and will weaken Social Security.

    It does little to fix some of the major problems facing private medical insurance.

    I think the whole pre-existing conditions thing is appalling, to be clear. However, the solution is not to add restrictions to an already ineffective private insurance industry. The solution is to improve the competition between insurance companies, make insurance plans tax deductable, make insurance plans protable between employers, and allow health insurance to be purchased across state lines. Add in tort reform while we are at it.

    Then, to deal with the evils of profit driven industry, you establish a public option which is intended to deal with the genuinely disadvantaged. Some people just cannot afford the health care they need, due to morally arbitrary factors like accidents of birth. Those people deserve the benefits of publically provided health care.

    The solution proposed in the US today is a hopeless compromise between these two extremes, and happens to get the worst of both worlds. They are adding a layer of bureaucracy to an already broken system, does anyone really expect this bill to help?

    By Anonymous Anonymous, at 1:56 AM  

  • The fact that something got passed is a miracle in itself.

    Obama made mistakes though by even trying to get Rethuglicans in on this with him.

    For once in a life time, Obama had a wonderful opportunity with Democrat majorities in the house and the senate. He really didn't need to tap dance with the GOP. Why he did that is beyond any logical thinking. After all, when The GOP are in power under those same circumstances, they would never have extended the same courtesy to the Democrat minority.

    No, he should have concentrated more on the conservadems; eventually they would have gone along with it; they too, have careers they would like to hang on to. Then it should have been rammed through congress; public option and all.

    Anonymous @12:42Am It's revealing that the Democrats looked at the British, German, and Japanese healthcare systems as models to learn from, but not the Canadian one.

    Funny, former presidents of CMA like Robert Ouellet claim to have gone to explore Netherlands, Belgium and other European nations for health care ideas. Waste of a trip though...further expansion here won't resemble anything in Europe, it will be the American nightmare. We're bound by NAFTA and a PM who loves all things Americana conservative.

    By Anonymous ck, at 6:38 AM  

  • It's revealing that the Democrats looked at the British, German, and Japanese healthcare systems as models to learn from, but not the Canadian one.

    That's only fair since they all modeled their financial systems on the American one. I guess we were pretty "out there" on that issue too.

    By Blogger Greg, at 8:38 AM  

  • This comment has been removed by the author.

    By Blogger Robert Vollman, at 10:31 AM  

  • ... and this bill will RAISE deficits by $562billion over 10 years.

    Still seems like a better investment than, say, oh, I don't know, maybe the war in Iraq?

    By Blogger Jacques Beau Vert, at 12:36 PM  

  • Obama made mistakes though by even trying to get Rethuglicans in

    really didn't need to tap dance with the GOP.

    when The GOP .... would never have extended the same courtesy to the Democrat minority.



    Hi CK,

    I think anyone paying any serious attention to Obama's campaign message (ie. "Change", bi-partisanship, an end to Washington bickering) would see why it would be important to him to put forth this effort -- despite the lack of same effort on the opposite side.*

    Martin Luthor King had a mind to behave better than the other side, like Gandhi and Anne Frank, or Professor X.

    I'm certainly not claiming Obama is Anne Frank, but calling Republicans "Rethuglicans" illustrates just more of the same problem that Obama once had Hope to Change. Where is name-calling getting us?

    (Don't get me wrong... I'm often perplexed by contemporary Republicans myself, CK... Nixon supported a health care system more "socialist" than Obama's...)

    By Blogger Jacques Beau Vert, at 12:42 PM  

  • YES to 2-TIER HEALTHCARE!!!!


    We already have it -- why not keep the money in Canada, rather than sending it to India or the USA? Let's keep public healthcare for those who need or want public insurance and service, and allow private care for those who want it. They're already getting it - what's the problem with leftists and private healthcare? Plus it would lessen the burden our public system is taxed with.

    Stockwell Day for Minister of Health, I say... but only if he makes good on the Liberals' fear-mongering.

    By Blogger Jacques Beau Vert, at 12:45 PM  

  • Dan, if I may go O/T for a moment


    To Reduce Partisanship

    American, but I think it's valuable here, too

    By Blogger Jacques Beau Vert, at 1:12 PM  

  • This comment has been removed by the author.

    By Blogger Jacob, at 6:33 PM  

  • "... and this bill will RAISE deficits by $562billion over 10 years.

    Still seems like a better investment than, say, oh, I don't know, maybe the war in Iraq?"
    For the record the bill will actually CUT the deficit by $130 billion over that period. While it sounds counterintuitive that something can cost over half a billion dollars over 10 years can cut the deficit it's not. Sometimes you have to spend money to save money – think about buying a new machine for your factory that let's you be more productive.

    Over 20 years the bill will cut the deficit by over a trillion dollars.

    By Blogger Jacob, at 6:39 PM  

  • It's not terribly counter-intertuitive... I'm NOT an economist but I'm optimistic this will save the USA money in the long run.

    Maybe they'll even figure out a better system than ours, which we can then adopt. :)

    By Blogger Jacques Beau Vert, at 7:51 PM  

  • All politicians are going to confiscate the money of the fortunate/successful and give it to someone else in order to increase their power and secure their jobs.

    Since you can't stop people's property from being confiscated, at least you can feel good that the stolen money is now going to pharmaceutical and health-related companies, which has a chance of being useful to you some day.

    By Blogger Robert Vollman, at 10:10 AM  

  • A few things, firstly this brings the US system very close to Canada's in terms of the percentage of healthcare dollars that come from the government (which, even before the bill was about 50% in the US and about 75% in Canada). That goes to show that the real differences aren't so much about government-private, but in terms of how you implement a government or private system.

    As to the fiscal question, a few points. Firstly, the CBO projections assumed that increases in marginal tax rates used to pay for the bill will have zero effect on economic growth. That isn't a plausible assumption.

    Secondly, governments have limited politically easy sources of revenue or cost-savings with which to do things like reduce the deficit. This bill is deficit-neutral (in theory), but it is only deficit-neutral by eating up most of those easy fixes. Given that America's budgetary path is already unsustainable, that is certainly a bad thing.

    Either of those might be forgivable if this bill could make real headway on reducing the growth in healthcare costs. While mandates will reduce the adverse selection problem of insurance, and exchanges are interesting, other aspects of the reform (like getting rid of preexisting conditions) will result in higher health-care costs.

    There is still the problem of defensive medicine, aided by the information asymmetry between patients and doctors. Patients don't know if they need a given operation and have to trust doctors - who may be all too happy to milk more money out of their gullible victims.

    But by adopting a more Canada-like healthcare system shouldn't Americans get Canada-like healthcare costs? No. In Canada the government both pays for healthcare and sets the prices. The result of that is an under-supply of healthcare, and less innovation but also lower costs.

    You also have to remember that Obama's healthcare reform means little change for most Americans, who get healthcare coverage from their employer. The government is not uninvolved in that process, by the way.

    Employers get a subsidy to provide healthcare to their workers. It is a horrible system that has people stuck in jobs just to maintain health benefits. It also means that health insurance companies don't have to be responsive to individual consumers, since employers are the ones they sell to.

    Coverage is not complete either - you have co-pays and deductibles, and sometimes limits on total coverage which is why many middle class people WITH insurance end up going broke if they get sick.

    America needs to do one of two things. Either they should adopt a single payer system, or they should abolish medicaid, medicare and the employer subsidy and redirect the funds towards individual healthcare savings accounts. To get economies of scale, buying pools can be formed. They could also subsidize specific things less likely to be provided by a private market, like preventive care.

    By Blogger hosertohoosier, at 10:13 AM  

  • Either of those might be forgivable if this bill could make real headway on reducing the growth in healthcare costs.

    I admit you're talking out of my league here... but I know you're a pretty sharp person. If this bill doesn't stop costs from rising, it's going to be pretty gloomy.

    By Blogger Jacques Beau Vert, at 11:48 AM  

  • Obama should have just kept it simple from the start. Promise a public option to cover every American.

    Sell that simple message early and often, then ram it through within the first 100 days. By dithering he let the Republicans turn opinion against the bill.

    By Anonymous Deb, at 1:23 PM  

  • This Bill provides coverage for millions of Americans by making it illegal for Americans to not buy health insurance.

    The unintended consequences of this Bill are difficult to predict, but it seems clear that Big Pharma will not be doing nearly as much development of new life-saving technology in the years to come as they have in the past.

    By Blogger Paul, at 5:13 PM  

  • "I admit you're talking out of my league here... but I know you're a pretty sharp person. If this bill doesn't stop costs from rising, it's going to be pretty gloomy."

    Empirically, five factors are big, statistically significant drivers of costs:
    1. National income
    2. System utilization
    3. The share of the population aged 65+
    4. Supplier-induced demand
    5. Intensity of care

    Healthcare reform will (in theory) not affect 1, it will raise 2, it will not impact 3, and it doesn't change 4 or 5.

    How does our system limit costs? Because the government is a single payer (a monopsony) it effectively sets the supply of healthcare by setting the price of fee for service operations, and by deciding how much to spend on healthcare.

    You can't get something for nothing. If you want to seriously tackle prices in the US you need to decrease how much people use the system, decrease how much healthcare is available and/or decrease the quality of care.

    The best you can say about Romney's reforms in Massachusetts is that they did not alter the trends in cost growth. However, because the government now subsidizes a larger share of healthcare spending there, taxpayers are on the hook - tied into a system that was already producing runaway costs.

    And the US still has to pay for the doctor fix, and deal with a medicare and social security system that is going to be insolvent unless dramatic changes are made. These expectations assume other things too, like that interest rates paid on the debt will remain low, or that the US can borrow indefinitely without losing AAA status or without being replaced as the international reserve currency (when that happens the US will no longer be able to borrow indefinitely).

    Mankiw makes a rhetorically effective analogy - suppose you have a friend that regularly spends more than they make, sending them on a path to bankruptcy. That friend then informs you that they have made some reductions in spending and increases in income - in order to cover a trip to Hawaii. Are they any less screwed fiscally?

    The CBO projects (with somewhat rosy assumptions) that the bill will reduce the deficit by 143 billion in 2010-2019. That sounds impressive, but is only 14.3 billion a year (and you have to remember that it is being paid for by 800 billion in cuts or tax hikes elsewhere). This is peanuts next to a 2009 deficit of over a trillion, or against an expectation of steadily rising (because of rising interest payments) deficits of 700 billion or so (once the economy has recovered and stimulus spending has expired).

    The impact on insurance coverage is smaller than you'd think too. The number of uninsured people in 2010 is 40 million, projected to fall to 35 million by 2019. The reconciliation bill gets
    that down to 23 million.

    By Blogger hosertohoosier, at 5:16 PM  

  • it seems clear that Big Pharma will not be doing nearly as much development of new life-saving technology in the years to come as they have in the past

    I don't see the "clarity" here... but Paul, I'm sure you do, and that's the important thing!

    By Blogger Jacques Beau Vert, at 10:54 PM  

  • Reading that twice, I admit to you it's hard to wrap my head around - although I did learn a fantastic new word (monopsony).

    Not to quibble with the Hawaii analogy (which I totally get, and take the point you/Mankiw are making), a vacation seems frivolous compared to helping families (and individuals) cover out-of-league costs. I read often about bankruptcies caused by medical needs - won't fewer bankruptcies lead to a stronger economy? I also read sometimes the POV that healthcare costs are one (just one) factor in American companies moving overseas for cheaper labour. Any thoughts?

    By Blogger Jacques Beau Vert, at 11:02 PM  

  • "I also read sometimes the POV that healthcare costs are one (just one) factor in American companies moving overseas for cheaper labour."

    Firstly, healthcare reform doesn't reduce the healthcare costs paid by companies. In fact, it may increase costs, and it definitely increases taxes. Most Americans will still get healthcare through their employer under Obama's plan.

    (the article below includes some employers that are particularly unhappy with the bill).
    http://online.wsj.com/article/SB10001424052748703312504575141642402986422.html?mod=WSJ_hpp_sections_opinion

    Secondly, the idea that the US has suffered because of companies "shipping jobs overseas" is utterly fallacious. The jobs that get done overseas are jobs that no Americans want to do, involving obsolete and declining industries.

    Unemployment in the US has stayed in the range of 4-6% since the mid 90's - the same period that featured most of the outsourcing. Yes, unemployment is a lot higher now, but is that because lots of jobs went overseas? No. It is because those jobs disappeared as a result of the recession.

    Most of the time, the US economy is robust enough that it can easily employ the people who lose their jobs as a result of factory closings. This has the advantage, moreover, of moving people into industries that are not likely to decline over time. The "world is flat" logic of Thomas Friedman is only correct for low-tech industries. If you work in a high tech sector, you are safe because the developing world lacks the infrastructure to produce high tech products.

    Americans benefit from FDI in two ways. Profits from American-owned factories get remitted to US corporations. Secondly, consumers get much cheaper products than they would otherwise get. In the recipient countries, workers get jobs that pay high wages (relative to other available jobs). In addition, FDI produces spillover effects. Typically foreign companies are more advanced than domestic ones. They bring with them technical know-how that benefits productivity in other sectors. Indeed, were it not for foreign investment, Canada would be an utter backwater (Canadian companies spend very little on innovation).

    FDI and free trade are probably the only two free lunches in economics - situations where almost everybody wins (and where the few losers are transitional, and can easily be compensated with the gains).

    The reason that everybody does not love them is that the benefits are diffuse, while the costs are concentrated. So labour unions here, or inefficient companies abroad, can do a better job of organizing against FDI/free trade, and getting their point across than the millions of people who benefit.

    In other words, if I gave everybody in Canada a dollar, but it would cost 1000 people 10 dollars, those 1000 people would be more likely to lobby effectively - although the policy is clearly a good one for the nation.

    By Blogger hosertohoosier, at 2:54 PM  

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