You’re on your own

It wasn't long ago that George Will called Obama's very catchy "you're on your own" line (from his acceptance speech) a straw man of the (discredited) Republican philosophy of government.  So I was struck when I read this encomium to being on one's own (creepy lines in bold).

When Medicare was created in 1965, America's median age was 28.4; now it is 36.6. The elderly are more numerous, and medicine is more broadly competent than was then anticipated. Leavitt says that Medicare's "big three" hospital procedure expenses today are hip and knee replacements and cardiovascular operations with stents, which were not on medicine's menu in 1965.

After being elected to three terms as Utah's governor, but before coming to HHS, Leavitt headed the Environmental Protection Agency. He came to consider it a public health agency because the surge in Americans' longevity in the last third of the 20th century correlated with cleaner air and fewer waterborne diseases. Longevity is, however, expensive, and demography is compounding the problem.

In the 43 years since America decided that health care for the elderly would be paid for by people still working, the ratio of workers to seniors has steadily declined. And the number of seniors living long enough to have five or more chronic conditions — 23 percent of Medicare beneficiaries — has increased. Many of those conditions could be prevented or managed by better decisions about eating, exercising and smoking. The 20 percent of Americans who still smoke are a much larger percentage of the 23 percent who consume 67 percent of Medicare spending. Furthermore, nearly 30 percent of Medicare spending pays for care in the final year of patients' lives.

If only we could find some kind of completely tone-deaf market analogy for how medicare should work:

Suppose, says Leavitt, buying a car were like getting a knee operation. The dealer would say he does not know the final cumulative price, so just select a car and begin using it. Then a blizzard of bills would begin to arrive — from the chassis manufacturer, the steering-wheel manufacturer, the seat and paint manufacturers. The dealership would charge for the time the car spent there, and a separate charge would cover the salesperson's time.

Leavitt says that until health-care recipients of common procedures can get, upfront, prices they can understand and compare, there will be little accountability or discipline in the system: "In the auto industry, if the steering-wheel maker charges an exorbitant price, the car company finds a more competitive supplier. In health care, if the medical equipment supplier charges an exorbitant price, none of the other medical participants care."

The auto industry?  The one with the huge bailout?  Anyway, back to the ice floe:

Rather than ruining the new year by dwelling on Medicare's unfunded liabilities of about $34 trillion (over a 75-year span), ruin it with this fact: In the next 50 years, Medicaid, the program for the poor — broadly, sometimes very broadly defined — could become a bigger threat than Medicare to the nation's prosperity.

This is partly because of the cost of long-term care for the indigent elderly, some of whom shed assets to meet Medicaid's eligibility standard — sometimes as high as income under 200 percent of the federal poverty level. And many states, eager to expand the ranks of the dependent with the help of federal Medicaid money, use "income disregards" to make poverty an elastic concept. For example, they say: A person who gets a raise that eliminates his eligibility can disregard the portion of his income that pays for housing or transportation.

Governments with powerful political incentives to behave this way will play an increasingly large role in health care. As is said, if you think health care is expensive now, just wait until it is free.

Indigent elderly, since you're a threat to our nation's prosperity, "you're on your own."

4 thoughts on “You’re on your own”

  1. I really don’t understand what you’re getting at.  I’m new to the site.  (I’m messing around with google trying to come up with a word for paean with a more negative sycophantic connotation, and got your site by chance.–BTW, if you could suggest one, it would be well appreciated)  Anyway, that Health Care costs are rising furiously is beyond dispute; that Medicare will not be able to fund itself fairly shortly w/o severe tax increases or service cuts is also beyond dispute; and that the claims the sick and elderly can make on the resources of the well and the working-age seems uncontroversial.  It seems uncontroversial as well that state-managed health-care contains inherent dangers of the government not economizing on services, since they don’t consume them directly and don’t pay the cost directly, and perhaps even deliberately spending wastefully because of politics a-la the no-bid military contracts.   Put two-and-two-and-two together, and it is obvious that decisions have to be made regarding how much care to give and what is to be the limit on cost.

    That’s the thing about health-care.  It is the thing which lends itself most to emotional appeals to sympathy for the old and sick, while simultaneously being the field in which emotions have to be most held in check.  You could easily spend the entire GNP helping the sick.  Hard decisions have to be made about when to say: “this much”.  (Hard political decisions have to be made about curbing patents and encouraging generics also.)

    I have no real use for George Will, but to some extent, it is likely that private resources have to be devoted to one’s own health in order to have an effective system.  Again, I’m a new reader, so you might be in that crowd that thinks all social/economic problems are the result of greedy rich people not paying enough taxes and that more progressive redistribution will solve everything, and that economic arguments such as the ones I made are smokescreens to favor the rich, in which case, well…

  2. Hi Pauly, generally, the conversation here tends to focus on errors in logic rather than on the evidence a writer musters (after all, one’s evidence may be fine, but one’s reasoning may still be completely botched). It might be worth reading over the blog’s  helpful reminder of distinction between truth and validity:
    While you will probably find the discussion liberal-ish, maybe 3 to 1 liberals around these parts, this post wasn’t about spring boarding off Will’s ideas in order to propose progressive solution; rather, it is an attempt to show several logically bad things Will does:
    1) Calls the charcterization of Republican philosophy as “you’re on your own” a straw man. It’s not a straw man if you catch ’em making those kinds of arguments…
    2) Proposes healthcare be handled more like our massive failure of an auto industry (a puzzling weak analogy).

    Then we argue about whether this or that is or isn’t a straw man, weak analogy, etc. 🙂

  3. I think you have mischaracterised Will’s comparison with the auto industry. He is simply using the purchasing of a car as an example of purchasing any private good in a free-ish market. His choice of cars as an example is unfortunate, but it has no bearing on his argument. He could just as easily have said “computer” instead of “car”. And the computing industry is in no need of a bailout. So it seems to me that bringing up the auto bailout is either a red herring or a straw man. Is this correct?

    Secondly, even if his argument were something along the lines of “The healthcare industry should be managed more like the auto industry specifically”, is it really valid to argue, “The auto industry needs a bailout, therefore the healthcare system shouldn’t be managed that way” without any other evidence?

    Thirdly, where in these passages does Will advocate a “you’re on your own” policy? It seems to me that he simply criticises the current state of affairs. Surely there could exist a middle way?

  4. Hi Jerome.  Thanks for the thoughtful comments. 

    1.  I would insist in this case the car-buying analogy is rather out of place.  In the first place, as the bailout and all of that has shown us, cars are hardly good examples of pure market products (or anything even close to that).  Second, and more obviously, the dealer cannot really tell you the final cost of the car, because the cost of using it–which is why you buy it–can vary greatly: gas, insurance, maintenance, and so on, are necessary and essential costs the dealer cannot tell you up front. 

    2.  A factual point: Market-delivered health care has resulted in our paying more for health care than any other country while at the same time getting less.   I only say this because it is not obviously the case that private systems produce more and more efficient results.  I would also argue (but I didn’t in the post) that health care shouldn’t work this way, as undoubtedly the market will decide too many people unworthy risks, etc.   In any case, I didn’t mean to suggest the specific inference you suggest I made.

    3.   Will suggests that the market delivery system (without federal interventions) is preferable–that, in any case, is also his longstanding view of such matters.  That there are inefficiencies in medicare and medicaid does not suggest, I would argue, some kind of global failure of government-run or managed health care–as Will suggests.  It suggests at best, as you rightly point out, the failure of one particular form of delivery. I would suspect there are many many middle ways we could find.  None of them, of course, would qualify on Will’s view, where if the government is involved, it’s ipso facto bad.

    Once again thanks for the comment.

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