Sunday, January 19, 2014

The Big Question: Is there an alternative to Obamacare?

A health policy discussion with Booth colleagues Matthew Gentzkow and Matthew Notowidigdo.

The original is here at the Booth / Capital Ideas website. The other "big ideas" videos are really good.

My views expressed here are summed up a bit more eloquently in a recent WSJ Oped, here, and a longer essay "After the ACA" available here. More on health economics and insurance, including how individual insurance can protect against preexisting conditions on my webpage here, and by clicking the "health economics" link to the right.


  1. Why does there even need to be some grand, national solution to healthcare like Obamacare or whatever alternative the Republicans offer? Isn't this something that is better left to the states to tailor to their own needs? Massachusetts came up with Romneycare, Vermont is moving toward a single-payer system, Texas tweaked their malpractice laws, etc. We have 50 unique states; why not let them all experiment and see what works best. If Romneycare is so great, then other states, responding to their residents' needs and wishes, can implement similar plans themselves. Or they can develop plans that reflect the needs, culture, and wants of their own citizens.

    While making this argument, some people have argued that in fact Obamacare does encourage states to experiment, but I find that to be balderdash. Yes, states had some leeway in terms of setting up their exchanges and Medicaid expansion, but overall Obamacare is a one-size-fits-all, top-down solution coming from Washington and its legions of so-called experts, as if those experts are somehow smarter than the experts states could recruit on their own. Look at how well the national Department of Education and Common Core has improved our nation's schools! Clearly Washington can fix healthcare, too!

    The Founding Fathers gave us the 10th Amendment for a reason, and they seem to be much wiser than our current leaders.

  2. After watching this segment, one gets the feeling that there is strong consensus among economists about at least one very important thing: the fact that employer-provided insurance is a terribly inefficient system with terrible consequences for the health care economy and, in many cases, tragic consequences for individuals that develop pre-existing conditions and then lose their jobs. However, it has also consistently been shown that the vast majority of Americans of all political views are very protective of their employer-provided plans and strongly oppose systems that would essentially take them away. Hence, the dysfunctional solution introduced by Obamacare and the hand wringing by those who originally supported socialized health insurance as well as those who wanted to see a solution based on individual health insurance. The political dynamics during the Obamacare debate showed that fear about their employer-provided insurance being taken away was the main reason many voters became strong opponents of Obamacare. It was also an issue immediately taken up by Republicans to attack the Democrats: one of the Republicans' most effective sound bytes was "Obamacare will take away your employer-provided health insurance." Finally, there is no question that the voting public's strong protectiveness of their employer-provided health insurance was the biggest reason why anything close to single payer health care was immediately taken off the table during the 2009 debate on health care in the Democratic Party.

    So the big question is: whatever direction we as a country decide to go in on health care, how would it ever be politically feasible to pass any bill (whatever political side of the aisle it comes from) that would get rid of the current employer-provided system. We have already seen how Republican politicians bashed Democrat politicians over even the slightest possibility that they would do just that, and there is no reason to think that Democrat politicians would not do the same in response to any Republican plan that would involve any changes to the employer-provided system. How can we ever expect getting rid of employer-provided health care to become politically feasible in America?

  3. Enlightening discussion, with some great counter arguments to some of the usual fallacies (health care is special, people can't decide for themselves, etc).

    A couple items that got a slight pass that I would not let go:

    o "Better outcomes" in other countries. Yes I caught the cancer counter, but life expectancy is left standing in these debates too often. A quick reminder that i) life expectancy is based on many things having *nothing* to do with the medical care system, and ii) we're only talking about 2-3 yrs difference between the US and the top of the longevity list (Japan last I looked). If we keep these in mind and look at the non-medical issues (US has a high homicide rate, high traffic fatalities, high obesity, gene pool) then life-span is a distraction from those outcomes which *are* about medical care, in particular cancer survival rates, for which the US has the best in the world, dramatically so in some comparative cases (breast cancer in the UK)

    o Economics of other health care systems in general. Are not many aspects the Swiss, Dutch, and, say, Singaporean systems more free market than the US? That is, the default argument seems to be that there's the US crony system versus the rest of the world which is all either government run (NHS) or single payer seems to be straw man. I studied the issue half a dozen years ago, perhaps I'm out of date now, but it seemed to some were moving not towards but away from socialized medicine.

  4. it’s hard for a man to understand something when his salary depends on his not understanding it

  5. Excellent! I hope Chicago Tonight has you on again soon. (It would be extra great if they would let it be just you and the moderator, without some pro-Obamacare person constantly interrupting to make sure people don't understand what you are saying.)


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