Friday, October 21, 2005

Here are some interesting posts on the general insanity of America's health policy.

Let's start with this one, briefly summarized here, as follows:

For the relatively modest cost of about $25 billion annually, the U.S. Gov could finance the same volume of drug research currently done under the aegis of private companies, and by virtue of that expenditure, be able to place all discoveries in the public domain, thereby reducing the price of drugs for consumers to zilch. All the discussion about the necessity of patents (with prohibitively high prices and short supply) being essential incentives for research is a giant pile of avian doo-doo.

The summary is inaccurate. It neglects to mention, as the longer post does, that doing this would save most of the $125 billion that the government currently spends on drug benefits, resulting in a nearly net $100 billion saving, as just about all drugs (save for the very, very rare cases which are genuinely tricky to manufacture) go generic. It also neglects to mention the many perverse incentives the patent system sets up:

  • Researching "copycat" drugs
  • Monetary incentives to fraud in research
  • Prioritizing the annoyances of the rich over the desperate needs of the poor, because, like, they have more money.

It's worth noting that the last of these is just the market working the way the market is supposed to work. The freshman economics canard is that a free market guarantees you an optimal allocation of resources. What it really gives you is what's called "Pareto optimality" --- that is, that there's no trade you could arrange that makes both parties better off. (Because, duh, if it's a free market, the parties would make that trade). But Pareto optimality is sometimes a far cry from social justice.

For more on how our political rhetoric around these issues is as screwed up as the health care system itself, look here, as George Will echoes the conventional wisdom:

Miller bluntly says that the social contract written after 1945 is being -- must be -- repealed because, given globalization, unskilled manual labor cannot be paid $65 an hour, with the cost passed on to consumers. "When you buy a Hyundai you get a satellite radio as your option, but if you buy a Chevrolet you get social welfare as an option. Long term, the customer is going to desert you if you try to price for your social-welfare costs."

The main social welfare you get with your Chevy is, of course, the workers' health care. And so Matt Yglesias flays the bow-tied SOB, after surveying how major car exporters do things:

In every major car-making country, auto workers get health care. The difference is that in every major car-making country besides the United States there's a systematic government policy in place trying to make sure that everyone gets health care. This is good policy. Those other countries feature better health outcomes and lower per capita expenditures than does the USA. They also have more competitive car industries than we have.

America's private sector welfare state is, indeed, breaking down. But our public sector one isn't breaking down. It's being bankrupted as a matter of deliberate public policy by officials who want to wreck it in order to better afford tax cuts for extremely wealthy individuals. This is also destroying our car industry and it's all very outrageous. But to pretend that nefarious "globalization" is responsible for it all is absurd. Universal health care is a staple of much more trade-dependent countries than the United States. Nothing is stopping us from doing it except the George Wills of the world.

And a political culture dominated by the groupthink of well-heeled, blindered acolytes of The God That Sucked.


Anonymous Blue Cross of California said...

Universal health care would be a great aspect to our health care system and help many with coverage.

7:25 PM  

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