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Saturday, November 03, 2007

Mankiw: Beyond Those Health Care Numbers

Greg Mankiw does his best to belittle the health care problem and sweep it under the rug:

Beyond those health care numbers, by N. Gregory Mankiw, Economic View, New York Times: Here are three true but misleading facts about health care that politicians and pundits in the United States love to use to frighten the public.

The United States has lower life expectancy and higher infant mortality than Canada, which has national health insurance. The differences are indeed significant. Life expectancy at birth is 2.6 years greater for Canadian men than for American men. Among women, Canadians outlive Americans by 2.3 years. Infant mortality in the United States is 6.8 per 1,000 live births, compared with only 5.3 in Canada.

These facts are often taken as evidence for the inadequacy of the U.S. health system. But a recent study by June and Dave O'Neill, economists at Baruch College, from whom these numbers come, shows that the difference in health outcomes has more to do with broader social forces.

For example, Americans are more likely than Canadians to die by accident or by homicide. For men in their 20s, mortality rates are more than 50 percent higher in the United States than in Canada, but the O'Neills show that accidents and homicides account for most of that gap. Maybe these differences have lessons for traffic laws and gun control, but they teach nothing about the U.S. system of health care.

Americans are also more likely to be obese, leading to heart disease and other medical problems. ... Research by the Harvard economists David Cutler, Ed Glaeser and Jesse Shapiro concludes that the growing obesity problem in the United States is largely attributable to its ability to supply high-calorie foods inexpensively.

Infant mortality rates also reflect broader social trends, including the prevalence of infants with low birth weight, which is correlated with teenage motherhood. Whatever its merits, a Canadian-style system of national health insurance is unlikely to change the sexual mores of American youths.

Some 47 million Americans do not have health insurance. This number from the Census Bureau is often cited as evidence that the health system is failing for many families. Yet ... the figure exaggerates the magnitude of the problem.

To start with, the 47 million includes about 10 million residents who are not U.S. citizens. Many are illegal immigrants. Even with national health insurance, they would probably not be covered.

The number also fails to take full account of Medicaid, the government's health program for the poor. For instance, it includes millions of the poor who are eligible for Medicaid but have not yet applied. These individuals ... could apply if they ever needed significant medical care. They are uninsured in name only.

The 47 million also includes many who could buy insurance but have not done so. The census reports that 18 million of the uninsured have an annual income of more than $50,000, which puts them in the top half of the income distribution. About a quarter of the uninsured have been offered employer-provided insurance but declined coverage.

Health costs are eating up an ever increasing share of Americans' incomes. ... But increasing expenditures could just as well be a symptom of success. The reason Americans spend more than their grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes. Medical science has consistently found new ways to extend and improve lives. Wonderful as they are, they do not come cheap.

Fortunately, incomes are growing, and it makes sense to spend this growing prosperity on better health. The rationality of this phenomenon is stressed in a recent article by the economists Charles Jones of the University of California and Robert Hall of Stanford. They ask, "As we grow older and richer, which is more valuable: a third car, yet another television, more clothing - or an extra year of life?"

Those looking at reform plans should be careful not to be fooled by statistics into thinking that problems are worse than they really are.

It's interesting and telling that he chooses to, for the most part, take a snapshot of a dynamic problem - where will the system be 10 or 20 years from now? - and use that snapshot rather than the expected pressures coming in the future to make his argument (and, while talking about misleading comparisons, he only considers the U.S. in relation to a single alternative, Canada, rather than to a broad array of alternatives that would give a fuller picture). He should also know that life expectancy from birth, which he is using in his arguments about different death rates for infants and the young, is not the only or even the best way to make life expectancy comparisons (as opposed, to say, the life expectancy at age 30, age 40, etc., i.e. given that you've already made it through the infant and young adult years). On obesity, it's correlated with being poor. Why might that be the case? Yeah, I know, they just don't have Greg's self-control. If they did, they'd be skinny and rich, just like him! I was surprised, too, at Greg's implication that Canadians are too backward to be able to "supply high-calorie foods inexpensively" like we can which is why they have less of a problem with obesity. And some of the arguments like blaming infant mortality on lack of morals rather than lack of access to health care - a key problem for the group he is targeting with his Malthusian moralizing - is a bit, um, surprising.

Anyway, you get the picture, it's bad morals (guns, births, eating too much, etc.), illegal aliens, people who make bad choices and don't buy insurance (more moralizing). Our people just aren't as moral as Canadians - we have too many people in certain groups so we look bad in comparison. It's not the failure of the system to deliver health care to these groups, nope, it's all those immoral people in the groups.

I assume the point in arguing that there is no problem is to undercut the case for reform. He wimps out and doesn't actually take a position on whether reform is needed or not, but why write this column if you are trying to encourage the process to move forward?

Why might he want to pretend there is no problem? Here's one answer from Clive Crook:

Why Democrats are winning on health care, by Clive Crook: This is from my latest column for National Journal...

The politics of the issue has moved a long way in the Democrats' favor. Public opinion has shifted, the polls say, in favor of universal coverage as a goal. Worries over the rising cost and availability of health insurance are a big part of the wider trend of rising economic anxiety. Americans' desire to see this problem fixed is greater now than it was in the early 1990s, when Hillary Rodham Clinton's previous health reform proposal was shot down.

At the same time, the Democrats -- and, above all, Clinton herself -- have radically altered their approach to the issue. Look at the way she pitches her plan on her campaign website. If you are happy with your existing health insurance arrangements, she insists, nothing will change. After the "Hillarycare" fiasco, that reassurance is crucial.

The Democrats' schemes all envisage an expanded government role -- as they must, if universal coverage is to be achieved -- but they are not single-payer "socialized medicine" plans. Moreover, that fact is obvious. The Republicans' insistence that these schemes amount to socialized medicine is implausible and smacks of desperation. The voters are not buying it. ...

Since the "socialized medicine" scare isn't working, I expect we'll see lots more columns trying to stop the movement toward universal coverage by minimizing the problem, and through other tactics.

Update: Brad DeLong adds more from Clive Crook:

Clive Crook on Health Care Reform, by Brad DeLong: He writes:

WEALTH OF NATIONS: Democrats Are Winning On Health Care (11/02/2007): Republican plans are cheaper... only because they are so much less ambitious.... None of these ideas -- not even McCain's, the best of the bunch -- frontally addresses the belief that the system is broken and, as a high national priority, needs far-reaching reform.

Do Americans really believe that reform is needed? They do, I think -- and if they do not, they should.... Lack of insurance is no longer partly a matter of choice (as in the case of the young and fit...), or else a problem only for the poor. Economic insecurity is on the rise for most Americans, not just for a static minority of poor people. People change jobs more often than they used to, whether they like it or not. And in the United States, when you change jobs you worry about your health insurance.

What if your next employer offers no coverage? What if a pre-existing condition makes an individual policy too expensive or altogether unavailable? The guarantee of universal coverage is something that almost all Americans, including those covered at present, would value and be willing to pay something for. And they know that every other rich country in the world provides it. As long as reform does not put them at an immediate disadvantage -- either by forcing them off plans they are happy with, or by pushing up their own taxes -- it is something they will vote for. The Democrats are offering reassurance on both points (more plausibly on the first than the second). They are on to something.

Update: See Dean Baker's "Further Behind Those Health Care Numbers." He explains why the 45 million uninsured figure may understate of the true problem, and he also looks at other statistics in more detail.

One more Update: Brad DeLong follows up with more questions on the numbers presented in the article (and he also has some questions about numbers that were not presented).

    Posted by on Saturday, November 3, 2007 at 12:42 PM in Economics, Health Care | Permalink  TrackBack (0)  Comments (98)


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