Nightcap

  1. White saviors abroad – social doctors at home? Tine Hanrieder, Duck of Minerva
  2. The case against Woodrow Wilson Philip Conway, et al, Disorder of Things
  3. Tragedy, statecraft, and world order Neville Morley, War on the Rocks
  4. “All leaders are constrained by their underlings” Rick Weber, NOL 

Nightcap

  1. The promise of liberalism in a world of groups Mark Koyama, Areo
  2. Becoming a man William Buckner, Quillette
  3. Choosing your own family Nora Caplan-Bricker, New Republic
  4. Home sweet home (California) Kerry Jackson, City Journal

Nightcap

  1. After Federalist No. 10 Greg Weiner, National Affairs
  2. Photos of the Paris “Yellow Vest” Riots Alan Taylor, the Atlantic
  3. A century of HIV Thomas McDow, Origins
  4. The long, entwined history of America First and the American dream Kevin Kruse, the Nation

Nightcap

  1. A libertarian case for postmodernism Candice Holdsworth, Spiked
  2. South Sudan and wealthy LA enclaves have same vaccination rate Olga Khazan, the Atlantic
  3. The rise of Turkey’s new ultranationalism Burak Kadercan, War on the Rocks
  4. Past Masters of the Postmodern Simon Blackburn, Inference

The Real Cost of National Health Care

Around early August 2018, a research paper from the Mercatus Center at George Mason University by Charles Blahous made both the Wall Street Journal and Fox News within two days. It also attracted attention widely in other media. Later, I thought I heard sighs of satisfaction from conservative callers on talk show radio whenever the paper came up.

One figure from the study came and stayed at the surface and was quoted correctly many times (rare occurrence) in the electronic media. The cost of what Senator Sanders proposed with respect to national health care was:

30 trillion US dollars over ten years (actually, 32.6 over thirteen years).

This enormous number elicited pleasure among conservatives because it seemed to underscore the folly of Senator Bernie Sanders’ call for universal healthcare. It meant implicitly, federal, single-payer, government-organized health care. It might be achieved simply by enrolling everyone in Medicare. I thought I could hear snickers of relief among my conservative friends because of the seeming absurdity of the gigantic figure. I believe that’s premature. Large numbers aren’t always all they appear to be.

Let’s divide equally the total estimate over ten years. That’s three trillion dollars per year. It’s also a little more than $10,000 per American man, woman, child, and others, etc.

For the first year of the plan, Sanders’ universal health care amounts to 17.5% of GDP per capita. GDP per capita is a poor but not so bad, really, measure of production. It’s also used to express average gross income. (I think that those who criticize this use of GDP per capita don’t have a substitute to propose that normal human beings understand, or wish to understand.) So it’s 17.5% of GDP/capita. The person who is exactly in the middle of the distribution of American income would have to spend 17.5% of her income on health care, income before taxes and such. That’s a lot of money.

Or, is it?

Let’s imagine economic growth (GDP growth) of 3% per years. It’s optimistic but it’s what conservatives like me think is a realistic target for sustained performance. From 1950 to 1990, GDP per capita growth reached or exceeded 3% for almost all years. It greatly exceeded 3% for several years. I am too lazy to do the arithmetic but I would be bet that the mean annual GDP growth for that forty-year period was well above 3%. So, it’s realistic and probably even modest.

At this 3% growth rate, in the tenth year, the US GDP per capita will be $76.600. At that point, federal universal health care will cost – unless it improves and thus becomes more costly – 13% of GDP per capita. This sounds downright reasonable, especially in view of the rapid aging of the American population.

Now, American conservative enemies of nationalized health care are quick to find instances of dysfunctions of such healthcare delivery systems in other countries. The UK system was the original example and as such, it accumulated mistakes. More recently, we have delighted in Canadian citizens crossing the border for an urgent heart operation their nationalized system could not produce for months: Arrive on Friday evening in a pleasant American resort. Have a good but reasonable dinner. Check in Sat morning. Get the new valve on Monday; back to Canada on Wednesday. At work on the next Monday morning!

The subtext is that many Canadians die because of a shortage of that great free health care: It nice if you can get it, we think. Of course, ragging on the Canadians is both fair and endlessly pleasant. Their unfailing smugness in such matters is like a hunting permit for mental cruelty!

In fact, though, my fellow conservatives don’t seem to make much of an effort to find national health systems that actually work. Sweden has one, Denmark has one; I think Finland has one; I suspect Germany has one. Closer to home, for me, at least, France has one. Now, those who read my blogging know that I am not especially pro-French or pro-France. But I can testify to a fair extent that the French National Healthcare works well. I have used it several times across the past fifty years. I have observed it closely on the occasion of my mother’s slow death.

The French national health system is friendly, almost leisurely, and prompt in giving you appointments including to specialists. It tends to be very thorough to the point of excessive generosity, perhaps. Yes, but you get what you pay for, I can hear you thinking – just like a chronically pessimistic liberal would. Well, actually, Frenchmen live at least three years longer on the average than do American men. And French women live even longer. (About the same as Canadians, incidentally.)

Now, the underlying reasoning is a bit tricky here. I am not stating that French people live longer than Americans because the French national healthcare delivery system is so superior. I am telling you that whatever may be wrong with the French system that escaped my attention is not so bad that it prevents the French from enjoying superior longevity. I don’t want to get here into esoteric considerations of the French lifestyle. And, no, I don’t believe it’s the red wine. The link between drinking red wine daily and cardiac good health is in the same category as Sasquatch: I dearly hope it exists but I am pretty sure it does not. So, I just wish to let you know that I am not crediting French health care out of turn.

The weak side of the French system is that it remunerates doctors rather poorly, from what I hear. I doubt French pediatricians earn $222,000 on the average. (Figure for American pediatricians according to the Wall Street Journal 8/17/18.) But I believe in market processes. France the country has zero trouble finding qualified candidates for its medical schools. (I sure hope none of my current doctors, whom I like without exception, will read this. The wrong pill can so easily happen!)

By the way, I almost forgot to tell you. Total French health care expenditure per person is only about half as high as the American. Rule of thumb: Everything is cheaper in the US than in other developed countries, except health care.

And then, closer to home, there is a government health program that covers (incompletely) about 55 million Americans. It’s not really “universal” even for the age group it targets because one must have contributed to benefit. (Same in France, by the way, at least in principle.) It’s universal in the sense that everyone over 65 who has contributed qualifies. It’s not a charity endeavor. Medicare often slips the minds of critical American conservatives, I suspect, I am guessing, because there are few complaints about it.

That’s unlike the case for another federal health program, for example the Veterans’, which is scandal-ridden and badly run. It’s also unlike Medicaid, which has the reputation of being rife with financial abuse. It’s unlike the federally run Indian Health Service that is on the verge of being closed for systemic incompetence.

I suspect Medicare works well because of a large number of watchful beneficiaries who belong to the age group in which people vote a great deal. My wife and I are both on Medicare. We wish it would cover us 100%, although we are both conservatives, of course! Other than that, we have no complaints at all.

Sorry for the seeming betrayal, fellow conservatives! Is this a call for universal federal health care in America? It’s not, for two reasons. First, every country with a good national health system also has an excellent national civil service, France, in particular. I have no confidence, less than ever in 2018, that the US can achieve the level of civil service quality required. (Less in 2018 because of impressive evidence of corruption in the FBI and in the Justice Department, after the Internal Revenue Service).

Secondly, when small government conservatives (a redundancy, I know) attempt to promote their ideas for good government primarily on the basis of practical considerations, they almost always fail. Ours is a political and a moral posture. We must first present our preferences accordingly rather than appeal to practicality. We should not adopt a system of health delivery that will, in ten years, attribute the management of 13% of our national income to the federal government because it’s not infinitely trustworthy. We cannot encourage the creation of a huge category of new federal serfs (especially of well-paid serfs) who are likely forever to constitute a pro-government party. We cannot, however indirectly, give the government most removed from us, a right of life and death without due process.

That simple. Arguing this position looks like heavy lifting, I know, but look at the alternative.

PS I like George Mason University, a high ranking institution of higher learning that gives a rare home to conservative American scholars, and I like its Mercatus Center that keeps producing high-level research that is also practical.

Midweek Reader: The Drug War, the Opioid Crisis, and the Moral Hazard of Overdose Treatment

Today, I’m reviving an old series I attempted to start last year that never came to fruition: The midweek reader. A micro-blogging series in which I try to link to stories that are related to each other to provide deeper insight into an issue. This week, we’re looking at the relationship between the Opioid Crisis and the drug war, and the academic debate around a controversial paper finding moral hazard in policies that try to increase access to Naloxone.

  • At Harpers Magazine, Brian Gladstone has a fantastic long-form piece looking into how attempts to crack down on opioid addiction by targeting the prescription pain meds have left many patients behind and questioning the mainstream narrative that the rise of opioids was driven primarily by pain prescriptions. A slice:

    Yet even the most basic elements of this disaster remain unclear. For while it’s true that the past three decades saw a staggering upsurge in the prescribing of opioid medication, this trend peaked in 2010 and has been declining since: high-dose prescriptions fell by 41 percent between 2010 and 2015. The question, then, is why overdose deaths continue to skyrocket, rising 37 percent over the same period — and whether restricting access to regulated drugs is actually pushing people toward more lethal, unregulated ones, such as fentanyl, heroin, and carfentanil, a synthetic opioid 10,000 times stronger than morphine.

  • Similarly, at the Cato Institute, Jeffery A. Singer has a good piece exploring the relationship between America’s War on Drugs and the rise of opioid addictions. He concludes:

    Meanwhile, President Trump and most state and local policymakers remain stuck on the misguided notion that the way to stem the overdose rate is to clamp down on the number and dose of opioids that doctors can prescribe to their patients in pain, and to curtail opioid production by the nation’s pharmaceutical manufacturers. And while patients are made to suffer needlessly as doctors, fearing a visit from a DEA agent, are cutting them off from relief, the overdose rate continues to climb.

  • At Voxphilosopher Brendan de Kenessey of Harvard has a piece exploring the philosophy of the self and of rational choice to argue that it’s wrong to treat drug addiction as a moral failure. A slice:

    We tend to view addiction as a moral failure because we are in the grip of a simple but misleading answer to one of the oldest questions of philosophy: Do people always do what they think is best? In other words, do our actions always reflect our beliefs and values? When someone with addiction chooses to take drugs, does this show us what she truly cares about — or might something more complicated be going on?

  • An econometrics working paper by Jennifer L. Doleac of University of Virginia and Anita Mukherjee of the University of Wisconsin released earlier this month, which sparked spirited discussion, investigated the link between opioids and laws increasing access to Naloxone. They found the laws increased measurements of opioid use but did reduce mortality, which they theorize is because Naloxone increases moral hazard for addicts by reducing potential costs of an overdose. However, they conclude:

    Our findings do not necessarily imply that we should stop making Naloxone available to individuals suffering from opioid addiction, or those who are at risk of overdose. They do imply that the public health community should acknowledge and prepare for the behavioral effects we find here. Our results show that broad Naloxone access may be limited in its ability to reduce the epidemic’s death toll because not only does it not address the root causes of addiction, but it may exacerbate them. Looking forward, our results suggest that Naloxone’s effects may depend on the availability of local drug treatment: when treatment is available to people who need help overcoming their addiction, broad Naloxone access results in more beneficial effects. Increasing access to drug treatment, then, might be a necessary complement to Naloxone access in curbing the opioid overdose epidemic.

  •  Alex Gertner, a PhD candidate at UNC-Chaple Hill, published a criticism of Doleac Murkhejee at Vox pointing out that their data linking Naloxone and opioid-related hospital visits are not necessarily due to a casual story involving moral hazard:

    The authors find that naloxone access laws lead to more opioid-related emergency department visits, the premise being that naloxone access laws increase opioid overdoses. But there’s a far more likely explanation: People are generally instructed to seek medical care for overdose after receiving naloxone.

    Overdose is a general term to describe experiencing the toxic effects of drugs. People can overdose, and often do, without either dying or seeking medical attention. If people who would otherwise overdose without medical attention are instead using naloxone and going to emergency rooms, that’s a good thing.

  • The widest-ranging and most thorough critique of Doleac-Murkhejee comes from Frank, Pollack, and Humphries at the Journal of Health Affairs. They argue that the original authors (1) assume too much immediacy in effect of changes in Naloxone laws than is probably warranted (2) ignore a variety of exogenous variables like Medicare expansion. They conclude:

    We believe the best interpretation of Doleac and Mukherjee’s findings is that their main treatment variable—naloxone laws—thus far have had little impact on naloxone use or nonmedical opioid use during the period studied. This disappointing pattern commands attention and follow-up from both public health practitioners and public health researchers.

On the paradox of poverty and good health in Cuba

One of the most interesting (in my opinion) paradox in modern policy debates relates to how Cuba, a very poor country, has been able to generate health outcomes close to the levels observed in rich countries. To be fair, academics have long known that there is only an imperfect relation between material living standards and biological living standards (full disclosure: I am inclined to agree, but with important caveats better discussed in a future post or article, but there is an example). The problem is that Cuba is really an outlier. I mean, according to the WHO statistics, its pretty close to the United States in spite of being far poorer.

In the wake of Castro’s death, I believed it necessary to assess why Cuba is an outlier and creates this apparent paradox. As such, I decided to move some other projects aside for the purposes of understanding Cuban economic history and I have recently finalized the working paper (which I am about to submit) on this paradox (paper here at SSRN).

The working paper, written with physician Gilbert Berdine (a pneumologist from Texas Tech University), makes four key arguments to explain why Cuba is an outlier (that we ought not try to replicate).

The level of health outcomes is overestimated, but the improvements are real

 Incentives matter, even in the construction of statistics and this is why we should be skeptical. Indeed, doctors are working under centrally designed targets of infant mortality that they must achieve and there are penalties if the targets are not reached. As such, physicians respond rationally and they use complex stratagems to reduce their reported levels. This includes the re-categorization of early neonatal deaths as late fetal deaths which deflates the infant mortality rate and the pressuring (sometimes coercing) of mothers with risky pregnancies to abort in order to avoid missing their targets. This overstates the level of health outcomes in Cuba since accounting for reclassification of deaths and a hypothetically low proportions of pressured/coerced abortions reduces Cuban life expectancy by close to two years (see figure below). Nonetheless, the improvements in Cuba since 1959 are real and impressive – this cannot be negated.

Cuba1.png

 

Health Outcomes Result from Coercive Policy 

Many experts believe that we ought to try to achieve the levels of health outcomes generated by Cuba and resist the violations of human rights that are associated with the ruling regime. The problem is that they cannot be separated. It this through the use of coercive policy that the regime is able to allocate more than 10% of its tiny GDP to health care and close to 1% of its population to the task of being a physician. It ought also be mentioned that physicians in Cuba are also mandated to violate patient privacy and report information to the regime. Consequently, Cuban physicians (who are also members of the military) are the first line of internal defense of the regime. The use of extreme coercive measures has the effect of improving health outcomes, but it comes at the price of economic growth. As documented by Werner Troesken, there are always institutional trade-offs in term of health care. Either you adopt policies that promote growth but may hinder the adoption of certain public health measures or you adopt these measures at the price of growth. The difference between the two choices is that economic growth bears fruit in the distant future (i.e. there are palliative health effects of economic growth that take more time to materialize).

Health Outcomes are Accidents of Non-Health Related Policies

As part of the institutional trade-off that make Cubans poorer, there might be some unintended positive health-effects. Indeed, the rationing of some items does limit the ability of the population to consume items deleterious to their health. The restrictions on car ownership and imports (which have Cuba one of the Latin American countries with the lowest rate of car ownership) also reduces mortality from road accidents which,  in countries like Brazil, knock off 0.8 years of life expectancy at birth for men and 0.2 years for women.  The policies that generate these outcomes are macroeconomic policies (which impose strict controls on the economy) unrelated to the Cuban health care system. As such, the poverty caused by Cuban institutions  may also be helping Cuban live longer.

Human Development is not a Basic Needs Measure

The last point in the paper is that human development requires agency.  Since life expectancy at birth is one of the components of the Human Development Indexes (HDI),  Cuba fares very well on that front. The problem is that the philosophy between HDIs is that individual must have the ability to exercise agency. It is not a measure of poverty nor a measure of basic needs, it is a measure meant to capture how well can individual can exercise free will: higher incomes buy you some abilities, health provides you the ability to achieve them and education empowers you.

You cannot judge a country with “unfree” institutions with such a measure. You need to compare it with other countries, especially countries where there are fewer legal barriers to human agency. The problem is that within Latin America, it is hard to find such countries, but what happens when we compare with the four leading countries in terms of economic freedom. What happens to them? Well, not only do they often beat Cuba, but they have actually come from further back and as such they have seen much larger improvements that Cuba did.

This is not to say that these countries are to be imitated, but they are marginal improvements relative to Cuba and because they have freer institutions than Cuba, they have been able to generate more “human development” than Cuba did.

Cuba2.png

Our Conclusion

Our interpretation of Cuban health care provision and health outcomes can be illustrated by an analogy with an orchard. The fruit of positive health outcomes from the “coercive institutional tree” that Cuba has planted can only be picked once, and the tree depletes the soil significantly in terms of human agency and personal freedom. The “human development tree” nurtured in other countries yields more fruit, and it promises to keep yielding fruit in the future. Any praise of Cuba’s health policy should be examined within this broader institutional perspective.