17 Nov 2009

Tyler Cowen on Health Care: So Close, Yet So Far Away

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I knock Tyler Cowen a lot far not being “hardcore” enough on the free market. So I do want to say I’ve been very impressed by how much he’s sticking his neck out in opposing ObamaCare (or PelosiCare or whatever slur you want to use).

And yet, poor Tyler can’t bring himself to just say, “Get the government out of it!” Now if he doesn’t think that’s really the answer, OK, fair enough. Yet I can’t help but think he does believe that’s the answer, and has decided it’s not politically feasible. So instead he recommends things like this instead of the pending legislation:

1. Construct a path for federalizing Medicaid and put it on a sounder financial footing; call that the “second stimulus” while you’re at it….

2. Take some of the money spent on subsidizing the mandate and put it in Medicaid….

2b. Make any “Medicare to Medicaid” $$ trade-offs you can, while recognizing this may end up being zero for political reasons.

3. Boost subsidies to medical R&D by more than the Obama plan will do….

4. Make an all-out attempt to limit deaths by hospital infection and the simple failure of doctors to wash their hands and perform other medically obvious procedures.

5. Make an all-out attempt, working with state and local governments (recall, since the Feds are picking up the Medicaid tab they have temporary leverage here), to ease the spread of low-cost, walk-in health care clinics, run on a WalMart sort of basis.

6. Make an all-out attempt, comparable to the moon landing effort if need be, to introduce price transparency for medical services….

7. Preserve current HSAs. The Obama plan will tank them, yet HSAs, while sometimes overrated, do boost spending discipline….

8. Invest more in pandemic preparation….

9. Establish the principle that future extensions of coverage, as done through government, will be for catastrophic care only.

10. Enforce current laws against fraudulent rescission. If these cases are so clear cut and so obviously in the wrong, let’s act on it. We can strengthen the legal penalties if need be.

11. Realize that you cannot tack “universal coverage”…onto the current sprawling mess of a system, so look for all other means of saving lives in other, more cost-effective ways. If you wish, as a kind of default position, opt for universal coverage if the elderly agree to give up Medicare….

As always, go to the full post to see the nuances and context, but the above IS what Tyler recommended in his role as an economist shouting advice from the sidelines, not as a DC staffer or a voting Senator.

Here’s my comment:

Tyler (if you’re still reading this far), not that you wake up in the morning trying to earn my approval, but I find your list odd. It seems as if you’re saying, “Whoa whoa whoa! The proposed big government plan will not work as advertised and will make us all worse off.” (I agree, and I applaud you for having the courage to say so.)

But then you are mostly saying, “If I were central planner, this is what I’d do instead.”

I don’t disagree that your proposals are better, but do you really think Pelosi et al. have an intellectual disagreement with you about the cost-effectiveness of doctors washing their hands?

In other words, I think this is all hopeless if we keep trying to get the central planners to “do the efficient thing.” We know the system is designed so that they won’t do the efficient thing. I realize you don’t want to sound like a knee jerk libertarian, but some of us are knee jerk libertarians with good reason…

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