Sunday, September 22, 2013

How Much Financial Trouble Is the U.S. In?

I’m going to have a different take on this than you may have seen elsewhere.

First, everyone knows we owe a ton of money.

Yawn. Or at least that’s what many people think when they hear this.

But, if you care about social programs and government commitments, a bigger problem may be the extent to which we’ve convinced people they deserve stuff. Lots of stuff …

Let me summarize the questions in this survey, and the median responses. In italics I’ve written some general commentary about what the truth it. The survey was put together by the Harvard School of Public Health, and an article discussing the results was published in the New England Journal of Medicine (a top journal in the medical field). Neither of those is known as a tool of Republicans.

1) People are not following the Medicare spending debate. I believe this.

2) People will vote against someone who proposes cutting Medicare. I believe this.

3) People have a favorable opinion of Medicare. How do they have a favorable view of something they don’t think works very well (see questions further down)? Is this just cognitive dissonance, or something worse?

7) Medicare doesn’t cover most medical costs of seniors. Actually, it covers the vast majority; most people have no idea how much their medical care actually costs (this is similar to students complaining about how much books cost after taxpayers have covered most of their tuition).

8) Most seniors are getting out less than they paid in. This is almost beyond belief: over their working lifetimes, people pay in about 1/3 of what they get out once they become covered seniors.

10) Private insurers are better run than Medicare. Probably so.

11) It’s harder to get an appointment with Medicare. This seems to be true.

12) Care is worse under Medicare. This seems to be true.

13) Doctors are paid less under Medicare. This is true, and the primary reason why some doctors will not even take patients covered by Medicare.

15) People don’t get the care they need from Medicare. Probably true.

16) Medicare already withholds treatments because of cost concerns. This actually seems rather doubtful.

23b) People believe fraud is widespread in Medicare. Fraud is everywhere, but it just isn’t that common. This is a very overrated position.

23d) Hospitals charge too much. Compared to what? If you don’t have a viable alternative, taking this position is pointless.

23e) Medicare funds are being spent on other stuff. There’s no evidence to support this.

23h) Government manages Medicare badly. Perhaps. I think this is probably overrated though: a third of the country works for the government, and they can’t all be inefficient, can they?

23 i and j) Doctors charges are a bigger problem for Medicare than lawsuits. This is interesting, but not for the surface reason. Instead, keep in mind that doctors say that charge a lot because they’re worried about lawsuits.

23 k and l) Pharmaceutical companies charge too much, and encourage prescribing drugs people don’t need. This is so bizarre as to be almost insane. Almost all medical advances of the last 75 years are pharmaceutical. And we’re living longer and healthier lives. This is like blaming your mom’s cooking because you’re overweight, and your dad’s repairs for your inability to fix stuff on your own. Sheesh.

35 and 38) Most people lean Democratic yet call themselves conservatives. WTF? Does this mean they think the Republicans are too liberal?

In sum, people like Medicare but don’t think it works well. They think they deserve care because they’ve already paid for it, when in fact they haven’t. They think there money is being spent on things other than themselves, even though the evidence is weak. And they have a but up their butts about pharmaceutical companies, even though this is the part of modern medical care that we’re sure works the best.

These viewpoints are not a recipe for the problem of Medicare funding being solved any time soon.

Thursday, September 19, 2013

What Is the Obsession with Forcing Help Upon the Poor?

Manu Joseph makes a point I’ve emphasized in class:

Too many people presume that what the poor want from the Internet are the crucial necessities of life. In reality, the enchantment of the Internet is that it’s a lot of fun. And fun, even in poor countries, is a profound human need.

The key word there is “presume”.

I’ve had many students who are RM’s (returned LDS missionaries). They frequently complain in macroeconomics classes about poor people in developing countries who have cellphones and don’t use them to better themselves.

As an positivist economist I try to emphasize that it’s our job to figure out why they find the things so valuable, rather than make normative judgements about how they use them.

Read the whole thing, entitled “Let the Poor Have Fun” in the September 17 issue of The New York Times.