Friday, March 17, 2006

Lies My Op-Ed Columnist Told Me...

Today, Michael Kinsley attempts a takedown of Paul Krugman and Robin Wells' brilliant piece in last week’s New York Review of Books—specifically, a takedown against single-payer.

The results are a rather sad mix of ignorance, lies, and idiocy as he suggests that the choices for healthcare reform are status quo with tweaks vs. rationing under single payer. Nothing could be further from the truth.

Beginning with the idiocy, it appears that Kinsley subscribes to a view of health insurance as a bet: individuals bet on the odds that they will get sick and need $X amount of healthcare, and insurers bet the same amount of money that they will not. When people end up being sicker than the insurer expected, the insurer loses and the people win.

This totally bizarre way of looking at health insurance leads Kinsley to worry about a “problem” that no one with any sense cares about—that under single payer, some people will pay into the system and never get sick, while other people will pay into the system and be really sick. That is, single payer sets up an irrational system where if people stay healthy, they “lose” the bet, and if they get sick, they “win” the bet.

Getting cancer and needing chemotherapy is winning a bet? Perhaps I’m in the minority, but if I’d paid a tolerable amount of my salary into a health care system, never had to worry about paying medical bills for myself or my family, and then got hit and killed by a bus when I was 90, I really doubt my dying thought would be “darn it, I really got screwed because I paid into health care my whole life but never needed a triple heart bypass.”

This kind of thinking is why Kinsley agrees with Krugman that Bush’s health care savings accounts are bad but Kinsley only understands half of the argument. Kingsley correctly agrees that HSAs mistakenly focus on the pennywise spending and the issue in the healthcare system is that we’re pound foolish. But he fails to point out that they’re also a bad idea for several othe reasons, paramount among them the fact that they make health insurance really cheap for healthy people, and really expensive for people who actually need healthcare. Sadly, as we will see later, he considers this aspect a feature, not a bug.

It’s the next paragraph where he starts spinning. I don't know what's more insulting: that he's spinning, or that he's doing it so badly. Kinsley argues that Krugman and Wells are being misleading when they lay out the “complexity and administrative costs of the current fragmented [healthcare] system.” He suggests that the computer industry would look equally lousy if presented this way.

But it’s Kinsley who’s being misleading when he says “even the most competitive industry can seem wasteful and inefficient when described on paper.” He never mentions that, unlike the very competitive American computer industry, the American health care system is not at all competitive globally. America spends way more to take care of fewer people, and there's no evidence we get any more for our money. If Kinsley claimed the American auto industry looked inefficient on paper but might still be really competitive, he’d be laughed at. He deserves to be laughed at here.

Kinsley further argues that although Krugman and Wells point out that healthcare spending is skewed (the 80/20 rule), other forms of insurance are like that, and that’s not what makes health insurance unique. Kinsley claims they don’t explain why health insurance should be different from any other form of insurance—why we should allow people to use it as a “subsidy” rather than as a stop-loss based on their health risk. And to give the devil his due, at a certain level he’s right. Krugman and Wells don’t explain why health insurance isn’t like car insurance. Because it’s perfectly obvious why they’re different.

Health care isn’t like car repair, so it’s not surprising that a system that works well for cars has been working very poorly for people. The economic approach that Kinsley wants us to take—winning or losing the insurance bet—is completely wrong. For most people, health insurance simply isn’t about insuring against losses. Health insurance doesn’t guarantee you will have $30,000 to fix your old car or buy a shiny new car if you accidentally smash up your old one.

That’s because health insurance is about guaranteeing access to care. Its primary value is that it’s a subsidy, not a stop-loss or a replacement for a lost investment like a house or car. Most of us aren’t billionaires and know full well that if our kid got cancer, we couldn’t afford to pay the medical bills. The reason we buy health insurance is to make sure that if our kid gets cancer, she can get chemo. Period, full stop.

Finally and perhaps most disgustingly, Kinsley brings up the bogeyman of rationing and says that Krugman and Wells “duck the issue.” But they don’t. In fact, they say what Kinsley won’t admit, that our current rationing system—rationing by health status and ability to pay—is not only immoral, but also leads to colossal inefficiencies. They say that if we had the system every other country has, we might be able to avoid rationing altogether, although they are honest enough to admit that we may still need to ration. They do put a silver lining on it by saying that we could at least ration more rationally, but they have the honesty that Kinsley lacks and admit we may not be able to get rid of rationing.

It’s Kinsley who ducks the issue of rationing by pretending it doesn’t exist today, and by implicitly advocating for a solution that would lead to more rationing by health care status. Kinsley almost casually waves away the problem of charging people higher premiums if they're more likely to get sick by saying, “[a]dverse selection is only a problem to the extent that insurance is not really insurance but rather a subsidy.”


This, of course, ignores the fact that health insurance is only necessary to the extent that it’s a subsidy. He pretends that people are choose not to buy insurance because they do not value it enough, when the real reason that most people don’t buy insurance is that the exact opposite—because they’re sick, it’s too valuable and so they can’t afford it.

And so it’s in his closing paragraphs that Kinsley becomes the most odious. He says, “If you're not as hopeful as Krugman and Wells about being able to avoid rationing, you face this question: Should people be allowed to opt out of rationing if they can afford it?...Better-off or better-insured people could be told, individually or as a group: Give up your health care subsidy and you may opt out of any rationing-type restrictions that the system imposes.”


Guess what? That’s the system we have now. No one has to buy insurance. No one has to decide to accept the subsidy. And our system is still full of rationing. Most people without health insurance aren't rich folks choosing to forego a subsidy, they're the working poor—too “rich” for Medicaid, but unable to afford insurance. There are millions of sick people who can't afford insurance, and who don’t get medical care as a result. Sure, there's a handful of irresponsible twenty-somethings in there, too. So what?

Michael Kinsley is a deceitful, desperate defender of the status quo. His “free market rulz!” ideology has blinded him to the fact that American healthcare is failing on all fronts—fairness, quality, and cost. He thinks our healthcare system mostly works great, and the way to fix what ails it is to make insurance cheaper for people when they don’t need it, and more expensive for them when they do.

Krugman and Wells say we’ve got to admit that an “every man for himself” approach has failed in healthcare, and it’s bankrupting us financially and morally. They suggest that the solution lies in abandoning ideology and instead learning from the proven success of other healthcare systems. And the first thing we need to realize is that all successful healthcare systems guarantee treatment to sick people when they need it.

5 Comments:

Anonymous Trapier K. Michael said...

Wanna know what I think? Go read this letter I just submitted to the Washington Post editors...

http://marketplace.md/community/blogs/hayekmd/archive/2006/03/17/1706.aspx

3:45 PM

 
Blogger aimai said...

Wow, what a great, great post. I've understood some of what you are arguing in a visceral way but you nailed it by perfectly articulating the issue of the "bet." I put this post up next to the one I read recently (over at digby? maybe) on "skin in the game"--sorry if it was ezra's site. Both keepers.

aimai

4:45 PM

 
Blogger opit said...

I linked from Ezra's, so you're up front. It does seem if proper focus would be on "not re-inventing the wheel" when selecting options by simply seeing what operating system best meets subjective criteria for best results. The current discussions seem too fragmented to be compelling.

12:46 PM

 
Anonymous paul said...

The "winning the bet" notion goes along with the old "moral hazard" idea that insured people have to be restrained somehow from consuming more health care than they really need. There might be universes in which that's a serious issue, but the US today isn't one of them.

(Apparently RAND has found that copayments, which are supposed to be a way of suppressing overuse, in fact tend to promote very expensive underuse when people who are sick avoid care or don't take their drugs because the copayment makes it impossible. One problem is that the suppressive effect of copayments varies wildly from person to person. I'm willing to pay $30 to be sure my kid doesn't have bronchitis, but probably not willing to pay the same amount to make sure I don't, even though the economic impact of my illness might be greater.)

11:51 AM

 
Blogger mr roses said...

Hey, your exactly-on-point rejoinder to Norquist at TPM brought me here. You don't disappoint -- added your feed to my Netvibes. Thanks.

7:25 PM

 

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