Category Archives: General

More Health Care Equals Better Health. Wanna Bet?


You are 80 years old and have two years to live.  Which hospital would you prefer, Bellvue (large NYC public hospital) or Columbia-Presbyterian (NYC academic private hospital)? 

I assume that most who know these hospitals would jump at Columbia-Presbyterian.  I think that is a safe assumption, but…(you knew it was coming)

I was listening to the Brian Lehrer show on WNYC (NPR) and was fortunate enough to listen to an interview discussing Consumer Reports findings (based on Dartmouth Atlas of Health Care 2008) in which consumer reports says that, especially at end of life (data comes from Medicare), more aggressive health care leads to worse outcomes.  Too many pricks, tests, procedures, hospital acquired infections, extensive recoveries, pharmaceutical mix-ups, etc.  Exposure to more health care can be bad for you. Sometimes conservative health care is better.  Sometimes the primary care physician is better than the specialist.  Sometimes the neighborhood hospital is better than the state-of-the-art hospital.  Bigger is not always better – a lesson Americans are slow to grasp.  SUV’s are not necessarily better than compact cars.  The 6,000 square foot mansion is not necessarily better than the 1,000 square foot apartment. The truth is that the private hospitals have perverse incentives to do more – to the point of harm.  The public hospitals might have incentives to do less.  Both extremes can be to the detriment of the patient.

Most health economics and policy makers grant that health care resources have diminishing returns the more you receive.  Meaning the first few interventions will have dramatic effects, but each additional resource used will have less and less impact until the care actually becomes harmful. Some patients reach that point in some of our hospitals. 

Overuse reaches the point where some states, hospitals, cities use 3x more health care resources than others with unmeasurable effects.  Why?  Because more is not always better, just richer. Health care needs to be smarter. Cars need to be smarter. We need to be smarter. However, getting back to the quiz…

With all that said I would still choose Columbia-Presbyterian, however, I would ask the questions to determine if the care proposed is really going to be good for me.   



As the Democratic nominating process extends into the spring the debate on health care policies has intensified. Health care was front and center at the Ohio and Texas debates thanks to Clinton’s persistence.  During these debates, and elsewhere on the campaign trail, both candidates have made claims and allegations against the others health care policy. Despite the media’s portrayal of the campaigns the debates have been relatively well- mannered and issue oriented.  I hope it remains that way.  However, each has made claims, and I hope to evaluate some of these claims as truths, stretched-truths, partial-truths, or complete falsehoods.

Clinton: Obama’s plan will leave 15 million people without health insurance.

That number comes from a MIT economics professor who stands by the fact that Obama’s plan will not cover everybody, but has distanced himself from the 15 million number – an educated guess.  The truth is neither of the plans provide enough detail to come up with concrete numbers. Clinton has taken a small step backward on this.  She now says things like, “15 million or so.”  The truth is that Obama’s plan is likely to cover less than Clinton’s, but using the 15 million stat is a bit of a stretch.

Stretched-truth, partial-truth

Obama: My plan will provide universal health care 

Clinton: My plan will provide universal health care

Not really.  Obama’s plan will leave people out.  So will Clinton’s.  Only a single payer system will truly include  every single American.  Clinton’s mandate will coerce more people to buy health care, but unless the penalty for not getting insurance is high some will choose to still not get insurance.

Stretched-truth (maybe a falsehood)

That leads to…

Obama: Clinton’s plan will force people to buy insurance that they cannot afford.

In a sense Obama is correct.  Clinton will create strong disincentives to not have health insurance.  Crazy double negative, but the most accurate phrasing.  We don’t know the extent of the disincentives, but they will be there. The question is what is affordable. Both Clinton and Obama will have tax credits based on income that should make insurance “affordable,” but Washington’s sense of affordable may be different than your sense of affordable.  What do people value?  Under Clinton’s plan the government will tell you how to value health insurance.  There are very good reasons for a mandate, but Obama is technically correct in his assertion. Her plan, unlike Obama’s, will force people to buy insurance who would not otherwise – good or bad. 


Obama: My plan will lower health care premiums more than any other candidates’ plans.

His re-insurance scheme should lower costs more than Clinton’s. Clinton will lower costs by getting more people (healthy people) into the insurance pools, but I think the Obama’s re-insurance scheme will be more effective in lowering costs. Both plans lack the details to be sure of this claim, but all in all, I think Obama is correct on this count.


I invite you to throw out other claims made by our candidates with or without an analysis of the truth behind these claims.  We can discuss how true the candidates are being as they discuss U.S health care.

Environment and Health

I’ve been good.  I’ve been good and disciplined.  I’ve been good and disciplined about keeping this blog purely about U.S. health care.  Well, as a Christmas present to myself I’m going to take a slight detour and bring in another passion of mine –  environmentalism.  More specifically – global warming and energy overconsumption. I believe that our health care system is going to be stressed by new diseases in the coming years – maybe 5 years, maybe 20 years, but it is coming.  Some of these diseases are going to be due to the over use of antibiotics in humans and livestock and others due to global warming or other factors beyond my understanding.  In regards to global warming – Italy has seen its first introduction to tropical diseases. As the earth warms diseases that thrived in tropical climates are migrating.  Check it out here.   Could the U.S. see similar diseases in coming years?  I have no idea, but it seems entirely plausible if west nile is any indication.  If I had my way we would be drastic – cut CO2 emissions unilaterally to pre-1990 levels (or further) and prepare for any possible disease introductions. 

“Patients Without Borders”

The New York Times Magazine published a moving pictorial with an accompanying short article depicting one response to the lack of health care access in our country. In Wise County, Virginia a group called RAM, Remote Area Medical, set up a three day medical camp – following the District Fair in July – under tents and in animal stalls to provide free health care. In the past RAM has established similar camps in developing countries. The response to what the on-line slide show called, “Third World Clinic, First World Country” is overwhelming. Over three days 2,500 people were treated with several hundred people still waiting to be seen when the camp closed shop. The health care problems in the U.S. are probably no worse than in some of the rural areas where poverty is rampant and access to medical professionals is limited.

Please take a look at this article and the accompanying pictures. They are strikingly sad.

Further Discussions…

A big reservation that many express over the size of the uninsurance problem in the U.S. is that often quoted 47 million figure. The argument is that the 47 million number includes a lot of people that some do not believe should be included – namely illegal immigrants, those that have money, and those that qualify, but are not enrolled in Medicaid. So the last post and the comments that followed addressed these issues, but I have one more argument to throw out there. I have to give credit to Paul Krugman for the numbers, but the argument goes like this. There are 47 million people who are uninsured, but that number is not static. Meaning that at any given time there are 47 million people (minus whoever you don’t think should be included) uninsured, but the people who make up that 47 million is constantly changing. Here is the number that Krugman introduced me to: One in every three Americans under the age 65 (non-Medicare) were uninsured at some point in either 2006 or 2007. That’s a large number. I’m sure it can be explained away or deconstructed, but it points to a truth that the number of Americans who are put at risk (financially or health-wise) is much larger than 47 million.

A Response to Mankiw

I first must poke fun at myself just a bit. I have not had any good critical comments on this site lately, and I guess I am missing the thrill of a good debate. So I have created for myself somewhat of a false debate here. Yes, I’m inventing an adversary, and I have chosen for myself a well-recognized, distinguished Harvard economist. I’m a bit out-gunned, but lucky for me he probably won’t respond.

So let’s get down to it…

Mankiw’s first statement regarding infant mortality and life expectancy is a valid one up to a point. The U.S. has a high homicide rate, and I (and you) will just have to trust him on the life expectancy thing (but I would like to see more of the research as I would have guessed that homicide and accidents could only account for a portion of the life expectancy discrepancy). The infant mortality rate is a troubling measure, but a good one as well. It is troubling for reasons that he mentions, but it is a good measure because this one measure captures many qualities of a health care system. It speaks to prenatal care (my guess is that Canada does this better), nursing, technology usage, doctors’ expertise, etc. So his point about high teenage pregnancy rates is true, but it is also true that the U.S. could improve our infant mortality rate numbers by providing universal prenatal care without obstacles. Canada does that.

His second statement was that the often quoted 47 million uninsured number over exaggerates the problem. I would say that it probably does, but not to the extent that Mankiw claims. Looking at the inverse numbers that Mankiw refers to, the U.S. Census Bureau states that there are over 33 million U.S. citizens without health insurance. And the percent of U.S citizens without health insurance grew from 12.8% in 2005 to 13.2% in 2006. So baseline-we have a problem and it is growing.

Second, of the 10 million that are not U.S. citizens the U.S. Census Bureau does not distinguish between legal and illegal. Legality is a big difference to many, but further, Mankiw assumes that illegal immigrants should not have health insurance of any form. That is a different policy debate, but it should not be assumed that we as a country are not better off by not providing care for illegal immigrants.

Third, he argues that 18 million (closer to 16 million actually) of the uninsured have household incomes over $50,000 so they of course can afford insurance. Well, let’s do some math. Let’s say a family of three makes just over $50,000/year (well, be generous – no tax burden). They spend $12,000 on housing leaving them with $38,000. A family policy in NY State in the individual market can run up to and over $24,000 (Aetna Health – $2,444/month in August 2007). So they have $14,000 left for everything else. Is that affordable?

Lastly, just because someone could have insurance and does not for whatever reason, does not mean that there are no longer negative effects on society as a whole. So if a person qualifies for Medicaid but is not enrolled that decision will still have negative consequences on society. Or if a person is young and chooses that the costs outweigh the benefit that decision will still have negative consequences for society. Or if an illegal immigrant cannot get health care it will still have negative effects on society. We cannot ignore the negative consequences to society as a whole from having 47 million people uninsured.

Mankiw’s third argument about the rising health care costs not really being a problem has validity, but he misses a huge point. Yes, we have wealth and we have tremendous health care technology advances that drive health care costs upward and upward. Spending more and more money on health care is not by itself the problem – “it is a symptom of success.” The problem is if you want to insure the 47 million uninsured (and growing). The rising health costs now present a formidable challenge. It takes over $6,000 to provide health care to each person. The more costs go up the more redistribution of wealth is needed, and the more politically unrealistic universal health care becomes. So if we as a nation are fine with a large number of people being without health insurance then the growing costs are not actually a problem, but when your employer drops your coverage then you will see a problem.

Mankiw’s Words

I came across this opinion piece in the business section of the New York Times by N. Gregory Mankiw. Mankiw is a professor of economics at Harvard, adviser to Mitt Romney, a former adviser to President George Bush, and the author of one of my economics textbooks. What follows here is the actual piece as published by the New York Times. I will comment in a later post to keep this at a readable length, but I invite any initial comments now.

“With the health care system at the center of the political debate, a lot of scary claims are being thrown around. The dangerous ones are not those that are false; watchdogs in the news media are quick to debunk them. Rather, the dangerous ones are those that are true but don’t mean what people think they mean.

Here are three of the true but misleading statements about health care that politicians and pundits love to use to frighten the public:

STATEMENT 1: The United States has lower life expectancy and higher infant mortality than Canada, which has national health insurance.

The differences between the neighbors are indeed significant. Life expectancy at birth is 2.6 years greater for Canadian men than for American men, and 2.3 years greater for Canadian women than American women. Infant mortality in the United States is 6.8 per 1,000 live births, versus 5.3 in Canada.

These facts are often taken as evidence for the inadequacy of the American health system. But a recent study by June and Dave O’Neill, economists at Baruch College, from which these numbers come, shows that the difference in health outcomes has more to do with broader social forces.

For example, Americans are more likely than Canadians to die by accident or by homicide. For men in their 20s, mortality rates are more than 50 percent higher in the United States than in Canada, but the O’Neills show that accidents and homicides account for most of that gap. Maybe these differences have lessons for traffic laws and gun control, but they teach us nothing about our system of health care.

Americans are also more likely to be obese, leading to heart disease and other medical problems. Among Americans, 31 percent of men and 33 percent of women have a body mass index of at least 30, a definition of obesity, versus 17 percent of men and 19 percent of women in Canada. Japan, which has the longest life expectancy among major nations, has obesity rates of about 3 percent.

The causes of American obesity are not fully understood, but they involve lifestyle choices we make every day, as well as our system of food delivery. Research by the Harvard economists David Cutler, Ed Glaeser and Jesse Shapiro concludes that America’s growing obesity problem is largely attributable to our economy’s ability to supply high-calorie foods cheaply. Lower prices increase food consumption, sometimes beyond the point of optimal health.

Infant mortality rates also reflect broader social trends, including the prevalence of infants with low birth weight. The health system in the United States gives low birth-weight babies slightly better survival chances than does Canada’s, but the more pronounced difference is the frequency of these cases. In the United States, 7.5 percent of babies are born weighing less than 2,500 grams (about 5.5 pounds), compared with 5.7 percent in Canada. In both nations, these infants have more than 10 times the mortality rate of larger babies. Low birth weights are in turn correlated with teenage motherhood. (One theory is that a teenage mother is still growing and thus competing with the fetus for nutrients.) The rate of teenage motherhood, according to the O’Neill study, is almost three times higher in the United States than it is in Canada.

Whatever its merits, a Canadian-style system of national health insurance is unlikely to change the sexual mores of American youth

The bottom line is that many statistics on health outcomes say little about our system of health care.

STATEMENT 2: Some 47 million Americans do not have health insurance.

This number from the Census Bureau is often cited as evidence that the health system is failing for many American families. Yet by masking tremendous heterogeneity in personal circumstances, the figure exaggerates the magnitude of the problem.

To start with, the 47 million includes about 10 million residents who are not American citizens. Many are illegal immigrants. Even if we had national health insurance, they would probably not be covered.

The number also fails to take full account of Medicaid, the government’s health program for the poor. For instance, it counts millions of the poor who are eligible for Medicaid but have not yet applied. These individuals, who are healthier, on average, than those who are enrolled, could always apply if they ever needed significant medical care. They are uninsured in name only.

The 47 million also includes many who could buy insurance but haven’t. The Census Bureau reports that 18 million of the uninsured have annual household income of more than $50,000, which puts them in the top half of the income distribution. About a quarter of the uninsured have been offered employer-provided insurance but declined coverage.

Of course, millions of Americans have trouble getting health insurance. But they number far less than 47 million, and they make up only a few percent of the population of 300 million.

Any reform should carefully focus on this group to avoid disrupting the vast majority for whom the system is working. We do not nationalize an industry simply because a small percentage of the work force is unemployed. Similarly, we should be wary of sweeping reforms of our health system if they are motivated by the fact that a small percentage of the population is uninsured.

STATEMENT 3: Health costs are eating up an ever increasing share of American incomes.

In 1950, about 5 percent of United States national income was spent on health care, including both private and public health spending. Today the share is about 16 percent. Many pundits regard the increasing cost as evidence that the system is too expensive.

But increasing expenditures could just as well be a symptom of success. The reason that we spend more than our grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes. Science has consistently found new ways to extend and improve our lives. Wonderful as they are, they do not come cheap.

Fortunately, our incomes are growing, and it makes sense to spend this growing prosperity on better health. The rationality of this phenomenon is stressed in a recent article by the economists Charles I. Jones of the University of California, Berkeley, and Robert E. Hall of Stanford. They ask, “As we grow older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”

Mr. Hall and Mr. Jones forecast that the share of income devoted to health care will top 30 percent by 2050. But in their model, this is not a problem: It is the modern form of progress.

Even if the rise in health care spending turns out to be less than they forecast, it is important to get reform right. Our health care system is not perfect, but it has been a major source of advances in our standard of living, and it will be a large share of the economy we bequeath to our children.

As we look at reform plans, we should be careful not to be fooled by statistics into thinking that the problems we face are worse than they really are.”