Two multi-paragraph posts today. This portends a week or two of prolific output. I'm sure brad and M are with me when I say "FUUUUCCKKKKK." I really need to find a new way to screw off at work.
Let's see what Megan's ass has to say about Medicare today. I'm sure it's lovely.
Medicare's Mythical Administrative Cost Savings
The title of this post is going to make some of my readers very angry. Medicare has lots of administrative cost savings, they will say. This may be so. But I mean mythical in another sense: there's ultimately no way to prove or disprove these amazing savings. The problem is indeterminate.
Angry? Not so much. I feel more a sense of pity. This is basically Megan's every-post about something she doesn't like. It's old hat. It's like getting angry over the need to brush your teeth. We're used to her stupid shit by now.
Jon Cohn, who I respect greatly, spends a lot of time on the money and time that insurance companies put into denying claims. This is undoubtedly true. But I have two caveats. First, some of that effort is a good thing: without it, there would be fraud.
I know, right. Whenever I'm in lab I constantly skip doing experiments to avoid having done experiments that didn't work. It's a great, efficient, time saving maneuver.
No, not the automatic denials so many insurers are fond of, and I'm not defending. But Medicare should probably spend a lot more effort rooting out excessive billing. And I don't know what percentage of claims denial consists of refusing to line the pockets of doctors and labs.
Medicare should totally spend more time doing something Megan doesn't know how much time it spends doing. Remember, when presented with the Hobson's choice of catching fraud or making sure sick people get the care they need, it's all about catching the fraudsters. It's far more important to punish the guilty rather than not punish the innocent. That's the
opposite of the foundation of our whole legal system!
But the more important point is that I doubt this is the majority of their administrative costs, or even the difference between their administrative costs and Medicare's.
Oh, she doubts something. I'm sure she has a good reason for that.
I'm not trying to justify the bullshit automatic claims denial, but that's not actually a very costly process: a hospital submits a bill, they deny it, you yell at them. Nor is refusing to cover people with pre-existing conditions, or any of the other multifarious complaints of single-payer advocates.
Actually, it is costly to pay someone to answer calls from irate customers whose dialysis claim was rejected despite their lack of functioning kidneys. It also costs the customer and or doctor money to make the call. Finally, it costs the insurance provider money when they finally pay the fucking claim that they improperly rejected in the first palce. Other than those costs, though, it's totally costless.
As to the mention of pre-existing conidtions. Brilliant. See, you can't say that private health insurance costs more and doesn't cover people cause obviously it costs nothing to the people who aren't covered. Nyah!
Rather, private insurers have costs that Medicare doesn't have within the agency. Private insurers bill. Medicare does too, but the IRS has its own budget--hell, its own courts--which don't show up on Medicare's balance sheet.
Anyone who can tell me where the "rather" came from, what the fact that insurance companies "bill" matters, or what the fuck the IRS has to do with anything gets free health insurance that doesn't cover any pre-existing or post-existing conditions.
My guess would be that these explicit costs are still lower than Medicare's. But then there are implicit costs to government fiat that markets don't have. As Tyler Cowen points out, taxation has deadweight losses, and Medicare is a tax on employment, which is something we are particularly anxious not to suppress right now.
Guessing, huh? Well, heh, at least she admits it.
Also, dead weight loss is the argument against everything and it's totally awesome. Unlike medicare savings, it can totally be proven either way.
The final point is that while people commonly think of administrative costs as "wasted", in fact, they are an important part of the market system.
Well, yeah, if your goal is to be an asshole and not pay for people's health insurance, she's right as cancer.
As Alex Tabarrok points out, and I have myself from time to time (o_O ~ed), many of the arguments in favor of national health care are literally socialist. And no, I am not using that term to apply to "anyone who is in favor of redistribution" or "government programs". But consider the following common arguments:
Cover your nose people, here comes a very shitty list.
* National health care will be cheaper because we will reduce administrative overhead
* National health care will reduce wasteful competition in the form of me-too drugs
* National health care will reduce wasteful competition in the form of advertising and other marketing expenses
* National health care will allow us to rationally distribute care to where it does the most good rather than the current messy, wasteful hodge-podge
* National health care will use resources for production instead of profits
* National health care will achieve economies of scale in purchasing and record-keeping
* People will not overuse free goods because there are hard limits to desired consumption
Anyone who can figure out how the first three items are socialist gets a free copy of "Liberal Fascism." Anyone who can figure out why economies of scale at Walmart are capitalism deluxe but economies of scale for health care are evil socialism gets a free lunch with Megan McArdle. Anyone who can explain what the fuck the last point even means gets a free psychiatric evaluation.
Anyone who can explain to Megan that the liberal's goal is much less about "streamlining health care" and much more about "sick people not dying on the street" gets to be fucking president. of the earth. forever.
But why were they discredited? That list looks really, really good on paper, even to my jaded libertarian eyes. A lot of the answer lies in the reason that we don't like monopolies--even though that list is just as true of monopolies as it is of the government.
Right. That's why the liberal idea of having the government
pay for health care control all service provision and product development is so silly. God, I'm glad Megan's around.
My critics will want me to explain why, then, Europe can do it cheaper. The answer is threefold. First, most European nations have better governance than we do--the American political system is a Public Choice disaster. Second, they pay people less money in a way that's hard to replicate here (and even if it wasn't, would be a one time savings that wouldn't check the rate of growth). Third, we're still driving quite a bit of product innovation. Our messy, organic, wasteful, unfair, irrational system allows experimentation, and they cherry pick the best results. If we stopped doing this, their system would stop looking so good.
First, maybe if idiots like our muse would stop voting for people like, oh say, George W Bush, to pick a random example, we might get some decent governance. Second, oh, it's hard to replicate. Well, that explains why several countries in Europe have all replicated it. I guess Europe is a country, now. I thought that that kind of thing only happened in Africa. Canada is also apparently in Europe now. Third, there are in fact new products made in Europe, you stupid, American exceptionalist piece of shit.
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