Saturday, June 9, 2007

And now a significantly less snarky post about Prof DeLong's Plan

The plan is here if you haven't seen it. Aside from disagreements over how much health paternalism the government sound engage in to keep down costs (Brad favors A LOT), the funding scheme also raises some issues.

First off, 20% of your income can be a lot of money depending on your situation. This doesn't matter that much for people who do have insurance who will recoup most of the cost of their previous insurance plans. However, this will be a major drain on the liquidity of those who don't currently have insurance who will have to fork over 20% of their current income up front. Three quarters of this (15% of total) goes into a HSA, but for someone who is unlikely to need much non-emergency care (young males) or will be mostly covered by the free preventative care (young females), this money is effectively tied up until the next tax rebate.

For most people who have insurance, it will be a step down in coverage. This may actually drive savings by making costs more transparent to the consumers, but on the other hand, it means that there will still be an unsatisfied demand for insurance due to risk adversity (15% of most people's income is a lot for them), so unless it is outlawed, the demand for some private insurance will still be out there. I'd also like to point out that insurance companies are probably more efficient drivers of cost suppression than individuals, since assessing medical necessity requires specialized knowledge and they both have a financial incentive.

Finally, health care spending, the distribution of which is neatly displayed in Figure 1 here is dominated by the top quintile, which accounts for 80% of spending. Accounting for a mere 3.4% of costs, the bottom 50% would mostly be using just the preventative care and will have a bunch of money pointlessly locked up in an HSA. On the other hand, the top 5%, where 49.2% of the costs lie, will tend to be well past the maximum out of pocket. The area where the least cost-effective interventions lie is also where government rationing is going to be the dominant factor, which you may take in whatever direction your presumably strong preexisting opinion of the efficiency of government health care rationing guides you. This is also unlikely to be covered by the 5% of income allocated for both it and the free preventative care (aside: Free preventative care isn't that expensive and probably isn't a horrible idea if you're going single payer. Of course, insurance companies tend to cover it well too, so there's nothing special about single payer here either.), so we'd be on the hook for some general budget tax increases on top of the 5-20% extra on income.

Friday, June 8, 2007

If you want a picture of the future, imagine a barefoot doctor examining your prostate--for ever.

The first two prongs of Brad DeLong's health care plan (a 20% tax on income to fund the thing, a tax rebate if expenses are less than 15%; the rest covered and is funded by the extra money from the program, or the general budget, or unicorns) don't make any less sense than most other funding methods for single player plans. On the other hand, I'm having a hard time describing the third prong without getting Godwin's law thrown at me...

Sin Taxes: on Tobacco, Gorgonzola, Three-Liter Bottles of Liquid High-Fructose Corn Syrup, Tanning Clinics (Melanoma), et cetera: Sin taxes (and, perhaps, someday general revenues) pay for an army of barefoot doctors and nurses and mobile treatment vans roaming the country and knocking on doors: Let me examine your prostate. Mind if I check your refrigerator and tell you how to eat healthier? Have you exercised today? I'm a Pilates instructor, and we could do a session now? Are you up on your immunizations? Anybody here have a fever and need antibiotics? Come on out to the van and I'll clean your teeth." The idea is to make the preventive care cheaper-than-free, to insure that nothing with a high long-run benefit/cost ratio gets left undone because people would rather get a bigger check the next April to use to buy an HDTV.

I know!

'Smith!' screamed the shrewish voice from the telescreen. '6079 Smith W.! Yes, you! Bend lower, please! You can do better than that. You're not trying. Lower, please! That's better, comrade. Now stand at ease, the whole squad, and watch me.'

The fourth prong is a relatively inoffensive increase in public health research funding.

h/t MR.

Tuesday, June 5, 2007

Republican Debate Replay Remarks

-I feel sorry for Tommy Thompson. I don't think he's very bad as Republicans go and no worse than the top tier candidates, but he absolutely dies in these debates. The majority of his time was spent clarifying which Thompson he is, and he's the one that's declared.

-Tancredo is at least realistic about Iraq. Still unrealistic about immigration though.

-Sen. Brownback wants to work with labor unions in Iran. I'd make a crack about Republicans supporting labor unions, but I don't really care for labor unions any more than I do Republicans.

-Romney has awesome hair. I don't think he should be president, but if he loses, he may want to look into playing a president on TV.

-Ron Paul is becoming increasingly effective at presidential politics. Chances remain negligible that he'll win the nomination, but he's getting better at presenting his ideas in a way that is attractive to non-libertarian disaffected Republicans.