Hypocrisy at Harvard?

An interesting article in yesterday's NY Times.  Some of the economists at Harvard helped design the Affordable Care Act. One result has been an increase in costs of their insurance to Harvard faculty, and many don't like it.  According to some health care economists, Harvard still has a very generous package.  The article quotes a Classics professor, who said the changes are, "...deplorable, deeply regressive, a sign of the corporatization of the university."  Much of the unhappiness is in the humanities faculties.  It is interesting when people who want expanded coverage for the country complain so bitterly when it generates a little higher costs for themselves.

New Disclosure Rules on Employer-Provided Health Care Insurance

An article in today's New York Times outlines a change on the W2 forms we get from our employers for taxable year 2012.  There is a listing of how much the employer paid on the employee's health care coverage for the year.  Many workers are stunned to find out that the health care insurance costs are $12,000 or more.  We know that as health care costs and insurance costs have risen over the last couple of decades that nominal wage increases have slowed down. The employer cares about the total cost of a worker and not just the dollar wages or salaries.  This is also one of the explanations for why middle-class wages have been relatively flat--we are only measuring the wages and not the total coompensation received by the employee.  According to the article, the disclosure is meant to make employees more cost conscious.  I find it hard to believe that that is the reason for the disclosure.  A worker sees that the employer spent $12000 on his medical insurance decides that he should go to the doctor less frequently?  I don't think so. 

Krugman on Stimulus--Again

Krugman's op-ed piece in the Times today argues that the claim that the Obama administration tried a massive stimulus plan and it didn't work is wrong. In fact, the stimulus plan was not large enough and much of the plan was not federal government spending. Instead, it was tax cuts and grants to states to make up for the lost revenues states faced. Much of what he says is true. In posts I did at the time of the stimulus, I argued that much in the stimulus bill was not stimulus. Instead, it was spending on programs that Democrats wanted but didn't put in the regular budget.

Krugman also argues that when people think of Obama as pushing big government, they don't have any massive new programs to point to. Here, it is clear that no matter how smart Krugman is, he doesn't get some basic ideas that people have. Krugman notes that the health care bill hasn't really kicked in yet so there is no new bureaucracy in place yet. True, but people anticipate there will be. People see that the focus of the administration had not been jobs but programs long held dear by Democrats in Congress, especially health care. The stimulus bill, as already pointed out, also included many things that may or may not be good, but could not be considered stimulus spending. People see that, for all the rhetoric from the administration, the focus of the administration was on programs long sought after by Democrats and not economic recovery. Krugman misses the point because he shared the same desire for the programs pursued by the president.

Health Care as Seen by the CEO of the Cleveland Clinic

The March 1 issue of Fortune has an interview with Delos Cosgrove, CEO of the Cleveland Clinic. The clinic is one of the most highly rated medical facilities in the country, and has the highest acuity patients of any hospital in the country. (That is, they have the sickest group of patients.) Dr. Cosgrove offers some interesting comments on health care costs. Like many others, he focuses attention on behavioral patterns--obesity, smoking, and exercise. He argues that the claim that we the quality of health care in the US is not very high is false. He also notes that health care costs will continue to rise, no matter what happens in Congress regarding health care reform. Why? One reason is we have more elderly and we can do more for the elderly today than in the past. He also notes that suffering has gone down. It is a nice counter to so much of what politicians claim about health care and what can be done.

Low Rating for U.S. in Health Care

A column in yesterday's Wall Street Journal discusses the often-used ranking of the U.S. health care system as 37th in the world. Experts know that the ranking system is seriously flawed, yet politicians keep citing it to demonstrate how bad the U.S. system is, and to justify the call for reform. A number of years ago, I organized a conference at Hope College on health care. In the research I did preparing for the conference, I learned that many European countries don't count the births of very premature babies as a live birth. The U.S. does. Since many of the very premature babies die shortly after birth, there will be a difference in the infant mortality rates from this difference. Now, it is unlikely that the difference in definition accounts for all the differences between the U.S. and Switzerland, but it accounts for some. There are numerous other differences in definitions, life-style choices, incidence of smoking, violent crime, and ethnic diversity across countries to make international comparisons difficult. Add to the fact that much of the rest of the world free rides on U.S. spending on research and development, and much of the differences across countries can be explained.

This is not to argue that changes in our system may not be advisable. It is meant to suggest that merely copying what some other countries are doing may not be optimal for the U.S.

Baucus Health Care Plan

The New York Times reports (see here) that Sen. Baucus has issued a health care plan. It is cheaper than the other plans that have been proposed, and the Congressional Budget Office estimates even lower costs, although still over $700 billion. Republicans have blasted the plan over making so many cuts in Medicare to pay for the coverage of the uninsured and other increased or new benefits. Democrats claim that the reductions in the rate of growth of Medicare will be accomplished through greater efficiencies rather than reductions in benefits. I am sure there are inefficiencies in Medicare. But, if reductions in costs could be made through reducing inefficiences, what is stopping the government from doing so?

Is the "Recovery" Obama's 9-11?

Democrats often accused George W. Bush, with some justification, of using September 11 as a reason for any bill he wanted passed by Congress. September 11 was his trump card. It appears President Obama has his own trump card--the recovery. Any bill he wants passed is crucial for economic recovery. In today's papers there are articles about his push for passing health care legislation. (See here for an example.)

The current health care system in the country had nothing to do with the financial crisis that led to the recession. The health care plan may or may not be good for the country, but it has nothing to do with ending the recession. We had growth with the current system and can have growth again with it. It would be nice if policies were argued on their merits rather than by using fallacious arguments.