Krugman Challenge Day 2 (I heart Krugman edition)

Today we’ll take another stab at the logic of Paul Krugman’s column (Times Select). Once again, the Krugman Challenge is an attempt to examine whether Paul Krugman commits fewer egregious logical sins than some of his colleagues. We are looking strictly speaking for commission of traditional logical fallacies, though considering along the way how his arguments work and whether they are made adequately explicit.

Krugman offers an argument for universal health care on two grounds:

>If we had a universal system — Medicare for everyone — there would be no more horror stories like those reported by The Los Angeles Times. And we’d almost certainly spend less on health care than we do now.

The first of these grounds is his concern for the majority of the column. The story from the L.A. Times provides some details of cases where people have purchased individual insurance, become sick, and then found their insurance company revoking coverage for various technical reasons. Krugman cites only 1 case and then asserts:

>This trend helps explain something that has been puzzling me: why is the health insurance industry growing rapidly, even as it covers fewer Americans?

Of course, Krugman has only cited one anecdote with a reference to the LA Times article on Sunday.

The original article claims that these cancellations–or at least the complaints and lawsuits that issue from them–have been suffered by people with individual insurance plans (of which there are 2 million in California) rather than group plans.

So is there evidence of a “trend” that can explain (or help explain) the rapid growth of the health industry? Well that’s hard for me to judge based on the data before me, and I will have to leave that to someone with access to relevant data. But it seems reasonable to take, in this case, the evidence of a series of lawsuits including depositions that show (“But an employee said in a deposition last year that a special department considers as many as 1,500 cases for cancellation each week in California alone. A consumer lawyer who saw Blue Cross’ cancellation tally sheets described the department as a rescission factory,” and coupled with regulators interest in these practices to suggest the existence of a “trend” (even though none of this evidence is directly cited in the article, the reference to its source seems more than adequate).

Can this trend provide explanation of the growth of the industry? Krugman doesn’t give us any particulars. However, immediately after this he talks about the growth of the industry as measured by employment, dazzling the reader with a series of statistics whose relevance to the question seems tenuous.
>Health care is poised to become America’s largest industry. Employment in manufacturing, which once dominated the
economy, has fallen 18 percent since 2000, to 14.2 million.

To which he adds:

>Yet even as health care becomes the core of the American economy, our system of paying for health care remains sick, and is getting sicker.

The sickness of health care is reflected in the decline of employment based coverage forcing either people to remain uninsured or seeking individual insurance. This coupled with the trend of jettisoning costly coverage where possible results in a trend towards only the healthiest and wealthiest having good insurance.

We will leave his comparison of the inefficiency of private health providers and the efficiency of government systems for another time when he offers a fuller argument for it.

So, how should we assess his argument? Once again Krugman avoids any glaringly fallacious argumentation. His argument is under-developed, but not in an obviously flawed way. There is a little bit of fuzziness connecting the “trend” of revoking coverage and the claim that it “helps explain” the growth of the industry. We have no real sense of the magnitude of the effects of this trend, or whether there are better explanations for the growth (such as providing increased services (as evidenced by increased employment?) to increased markets?). But, if the companies are interested in jettisoning costs (in some cases illegitimately) we must assume with Krugman that they are doing this as a result of “market pressures.” And so it must have some effect on their profitabiliy.

Nevertheless, since Krugman’s conclusion is that a public health care system would avoid cases like the one’s reported in the LA Times and cost less money, the part of his argument supporting the first claim seems adequately defended. (These cases are caused by the profit motive. In a public system profit motive is absent. Therefore these cases wouldn’t occur.)

Seems we will be returning for Krugman Challenge, Day 3!

One thought on “Krugman Challenge Day 2 (I heart Krugman edition)”

  1. You probably ought to stress that *you* think Krugman passes the initial smell test. This does not mean (1) that Krugman is right that we need universal health care; (2) all arguments to the contrary are by our lights wrong; (3) there isn’t seem grievous error of fact somewhere in Krugman’s statistics.

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