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Wednesday, August 23, 2006

Universal Health Care by Mickey Kaus

Slate.com's Mickey Kaus has an interesting post concerning universal health care and receives some interesting replies to his proposal.   Here is a brief excerpt:

Matthew Yglesias takes issue with my suggestion that a "decent" national health care system, added on top of our current Social Security system, will require a "larger tax burden than citizens are willing to bear." He argues:

The U.S. government currently spends a phenomenal sum of money on health care by world standards ... [W]hen you're talking about universal health care you're not really talking about increasing the aggregate resources poured into American health care. There's already tons of money being spent on it. You're talking about redistributing the spending somewhat from richer to less-rich people and altering the path through which the money flows.

I'm not a health care expert, but it seems to me:

1) If we want a system that reinforces social equality--everyone in the same waiting room-- that means we need basically the bottom 90% to use the same system. The hardest (i.e. impossible) way to do this is by forcing the affluent to get less care than they are willing to pay for ("redistributing the spending somewhat from richer to less-rich people," as Yglesias tactfully puts it.) The easiest way to do that is to offer subsidized universal care good enough so that the vast majority of the affluent will be content to use it. In other words, you can't just "insure" the poor with bare-bones HMO treatment. This will be expensive.

2) Medical technology will offer more and more complex and costly ways to treat illness. Some of these treatments will work. We want to offer them to everyone, with a minimum of rationing--again, in a system that most of the affluent will also sign up for. The alternative seems to be a system in which the upper middle class lives (because they can afford fancy treatments) and the working poor die. Avoiding this will be expensive.

3) We will still want to encourage future medical research and technological advance--or at least we want to retard it as little as possible. That's why I'm skeptical of some plans for realizing huge cost savings. For example, the government could undoubtedly use its monopsony power to lower the price it pays for drugs--maybe lower the price to something approaching the marginal cost of producing additional pills. It's not at all clear, however, that this is the price we should want to pay, because it does little to fund research and development costs of developing both the existing drug and new drugs. See Michael Kinsley's analysis here. Paying medical providers enough to fund future advances will be very expensive.

It is an interesting debate!

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