Betsy McCaughey’s Voodoo Health Economics
Betsy McCaughey’s Voodoo Health Economics
Betsy McCaughey’s new editorial in the Wall Street Journal argues that the President’s recent Council of Economic Advisers report — which found that slowing health care spending by 1.5 percentage points (from 6 percent a year to 4.5 percent) would create “as many as 500,000 jobs a year” and increase “annual income for the average family of four by $2,600” — is simply “untrue”:
On Monday President Barack Obama’s Council of Economic Advisers released a report called “The Economic Case for Health Care Reform.” The report argues that Americans must curb their consumption of medical care in order to avoid soaring federal deficits, unsustainable burdens on family budgets, and damage to the economy. All of these claims are untrue.
McCaughey argues that efforts to lower health care spending would expose “the nation to medical scarcity,” resulting in “a European-like system where medical care is limited.” She deliberately confuses slowing the growth of health care spending with slashing existing spending. As a result, she’s able to claim that “you may be able to keep your health plan — as politicians have promised — but you’ll find a lower standard of care when you need it.”
But this argument isn’t about Americans not receiving care when they need it, it’s about improving our value of care. More services do not necessarily translate into better health care. In fact, they often produce worse outcomes. A recent Business Roundtable study found that compared to France, Germany, Japan, and the United Kingdom, U.S. workers and employers receive 23 percent less value from our health care system than the citizens of these other nations.
We pay for volume and not value; quantity and not quality and McCaughey is trying to conflate the Democrats’ efforts to increase system efficiency with cuts in needed medical services. Simplifying medical forms or doing a better job managing chronic diseases (thus negating the need for more expansive treatments down the road), however, is not the same as denying treatment for a heart attack. In fact, every other major industry has long abandoned the use of paper records or performing numerous unnecessary or duplicated services.
McCaughey buries the distinction and attempts to diminish the severity of the health care crisis. Health care costs are not skyrocketing, families are not burdened by growing premiums, and “cutting annual increases in health-care spending by 1.5% a year” will endanger jobs, she argues. For most families, things are getting better, not worse. “Food and energy together have taken up a declining share of Americans’ spending each year since 1960… [allowing Americans] to spend more on health care.” Never mind the gap between wage and premium growth, the growing number of uninsured, or the increasing number of medically-related bankruptcies.
Since health care costs are increasing at a lower rate in 2007 than in 1980, they are of no concern to the nation’s financial stability. In fact, Medicare’s increasing spending can be fixed by “asking wealthy seniors to pay more or inching the eligibility age upward two months a year until it reaches age 70 in 2043″ — a proposal which, in reality, would save little money, since the young elderly are healthier than older and disabled Medicare beneficiaries.
5 Responses to “Betsy McCaughey’s Voodoo Health Economics”
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Insurance is not medical care. Physician supply, especially primary care doctors is already constrained. Hospital bed capacity is driven more by nurse staffing than physical facilities.
Health care reform’s devil is in the details. The worry is physicians will retire early. A huge number are 58 years or older. The other question is the impact of reform on nonprofit community hospitals. How many will stay open, especially if a new tax burden is laid on financially stressed institutions?
Covering more people is important, so is paying attention to supply and demand in provider markets. Confound the two isn’t helpful.
The rest of the post is scatter shot. The report has several assumptions that are not reality at the present moment. One, it projects everyone in America will be covered. Senator Max Baucus said no illegals will get coverage. The leaves 9-12 million uninsureds at the get go.
Second, the study mentions President Obama’s budget with a down payment for reform. His measures did not pass in the budget bill, so there currently is no down payment.
June 5th, 2009 at 4:41 pmAs a result, she’s able to claim that “you may be able to keep your health plan — as politicians have promised — but you’ll find a lower standard of care when you need it.”
Well, of course. The accurate claim, “you may be able to keep your health plan, but you’ll find it costs less” is obviously a non-starter when you’re trying to argue against the change. (I use “accurate” to mean “based on the original claim” – I have no real idea of whether the original claim is itself true-to-reality.)
June 5th, 2009 at 8:24 pmThis woman has spent most of her career battling those pesky poor people and people of color. She seems to be deeply disturbed that might want just treatment or access to the same circles she slithers around in.
June 6th, 2009 at 8:07 amSadly, very sadly, young Betsy is a relative of mine. I can not possibly believe, given her genes, that she really is a stupid as she demonstrates so often. On the plus side, her genes are imbued with concern for health care and service; but on the down, she is a blathering idiot. One can only suppose she is merely a greedy puppet of the insurance industries.
June 7th, 2009 at 9:50 pmBetsy McCaughey’s WSJ editorial was a superficial, simplistic analysis, fraught with false and facile logic and factual inaccuracy.
A few facts re rising health care costs which have escaped Mrs McCaughey: The US spent $2 trillion on health care in ‘06 – 3 times the $714 billion spent in 1990, and 8 times the $253 billion spent in 1980 – while health care spending in ‘06 grew by only 6.7%, it still outpaced inflation & wage growth. 2008 spending was approx $2.4 trillion, 17% of US GDP, and is projected to exceed $3 trillion by 2012. The US spends six times more per capita on the administration of the health care system than its peer Western European nations.
Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period. Health insurance expenses are the fastest growing P&L issue for employers.
National surveys have revealed that the primary reason people are uninsured is the high cost of health insurance coverage. A recent Harvard University study found that 50 percent of all bankruptcy filings were partly the result of medical expenses. About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs.
McCaughey claims two-thirds of health care cost increases are due to life-saving innovation and technology, while the cost-efficiency of prevention exists only in the minds of politicians. Worse still, 80% of preventive measures actually increase medical costs. Has nobody told McCaughey that 70% of US healthcare spending is on chronic diseases, like diabetes and asthma, yet half of these diseases are linked to PREVENTABLE problems like smoking, obesity & physical inactivity? That an alarming almost half of Americans are very overweight or obese, at a much higher risk for heart attacks, strokes, diabetes, arthritis and some cancers. Obesity and obesity-related conditions result in $62.7 billion in doctors’ visits and $39.3 billion in lost workdays each year. Type 2 diabetes, has the highest contribution with an estimated $98 billion per year in health care costs because of its links with other health issues such as coronary artery diseases, renal diseases, hyperlipidemia and stroke.
Since McCaughey is on the payroll of Cantel Medical Corp., she may prefer the promotion of disease-related care and expense rather than preventive, pre-emptive lifestyle changes and health education. Spending in the US for prescription drugs was $216.7 billion in 2006, more than 5 times the $40.3 billion spent in 1990. Although Rx drug spending has been a relatively small proportion of national health care spending (10% in 2006, compared to 31% for hospitals and 21% for physician services), it has been one of the fastest growing components, until recently growing at double-digit rates compared to single-digit rates for hospital and physician services. US drugs cost American consumers 30% more than in Canada or Europe.
Mrs. McCaughey, you may have a 90% chance of surviving that heart attack. Thereafter, you’ll be swallowing down costly drugs for the heart disease, plus those to treat the side effects of the former, and you’ll probably die of heart disease anyway. Despite all the innovation and technology, heart disease is still the #1 killer of Americans. A little prevention might go a long way….
June 10th, 2009 at 4:03 am