Health Care: The Big Picture

Paul Krugman and Robin Wells have a long review piece in the NYRB correcting some common misperceptions of the U.S. health care system. They provide good empirical evidence that we both spend more than comparable countries and get worse results overall. Our system is “is unique in denying necessary care to people who lack insurance and can’t pay cash.”

When I talk about such chronic underperformance, I’m often “reminded” that while the U.S. may have an infant mortality rate that’s higher than Cuba’s, it’s still the best place for someone with insurance to get sick. Krugman and Wells chip away at this notion as well, pointing out that:

The frequent claim that the United States pays high medical prices to avoid long waiting lists for care also fails to hold up in the face of the evidence: there are long waiting lists for elective surgery in some non-US systems, but not all, and the procedures for which these waiting lists exist account for only 3 percent of US health care spending

Also, anyone who’s visited an ER lately has experienced the “spillover effects” of 41 million uninsured: endless waits as bad coughs and chronic pain that should have been treated in a doctor’s office get routed to providers of last resort. Sadly, policymakers who might be exposed to this demoralizing spectacle tend to circumvent the normal triage procedures. Economic apartheid distorts their perception of reality.

So what to do? Krugman and Wells recommend Democrats “go for broke” and propose a “single payer” plan, but there are some problems with that…


First, precisely because of the enormous administrative costs they point out, there are powerful constituencies behind the status quo. We can all remember “Harry and Louise,” but the problem goes deeper than that. For example, there are over 50,000 medical coders in the United States, whose main job is to translate the morass of codes for various medical procedures for computer systems that accept or deny payment. Multiply that number times the endless steps toward approaching, applying for, deciding on, getting, and getting reimbursement for health care, and you’ve got a sense of the extraordinary political opposition any “streamlining” measures are going to encounter.

Second, while Krugman and Wells skirt the “rationing” issue in their piece, this is a fundamental obstacle to government driven reform. Any entity that “runs” a health care system is going to have to make very difficulty, politically unpopular decisions at times. The better a planner can diffuse responsibility for those decisions, the more likely the plan is to succeed.

Admittedly, in the face of serious economic reversals in the U.S., political opposition to single payer may evaporate as the majority starts identifying more with the plight of the poor than the endless opportunities of the wealthy characters who dominate national life. But in the meantime, both Jacob Hacker and my colleague John Jacobi have suggested better solutions than “go for broke” single payer: namely, more incrementalist efforts to add coverage categories to existing public programs. Both Democrats and Republicans (like Mitt Romney) are starting to recognize the power of this approach to tame the manifold inefficiencies and injustices of the current system.

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