Tyler Cowen's health-care proposals

"Marginal Revolution" is one of my favorite blogs, presenting an economist's perspective on all types of issues. I especially like Tyler Cowen's posts because he seems to share many "Free Democrat" values -- a liberal drive to help the least fortunate members of society, respect for different cultures, and an appreciation for the power of decentralized, voluntary human interaction.

Still, for whatever reason, Cowen does not identify as a Democrat. A recent post is entitled "Tyler Cowen pretends he is a Democrat" and deserves to be read by Free Dems. This post focuses on the issue of health-care reform and what Cowen thinks are reasonable starting-points and proposals to address the Democratic mission of expanding access to basic health care services.

His suggestions consist of:
1) Promote public-interest research through NIH and universities.
2) Simplify the Medicare drug bill.
3) Invest in local public health systems with a focus on prevention.
4) Consider libertarian criticisms of the FDA.
5) Institute prizes for successful vaccines.

If you are interested in politically and financially feasible expansions of the health-care system, take a look.

Among his suggestions, I really think that the focus on prevention should be given the highest priority. For me, prevention is still the best cure. Research indicate that most people get sick because they develop symptoms early does not take any methods for prevention. I would think that this will make things easier for people to cope up with their health problems.

between paying health care "premiums" to an inefficient, bloated system that spends much of their resources trying not to pay for my healthcare, or "taxes" to a universal system that is more efficient, and would allow for more freedom for healthcare consumers, and producers, i will choose the latter. high "premiums" + waste and fraud vs moderate "taxes", plus efficiency and freedom. hmmm... hard decision.

That'd be nice in some alternate reality where it was possible, but in reality it's between paying ever-increasing "premiums" to an inefficient, bloated system trying not to pay for many folks' healthcare vs paying ever-increasing "taxes" to an inefficient, bloated system that threatens to eat the economy unless it eventually ushers in control over the habits of the public or....tries not to pay for many folks' healthcare. Or both.

That's how healthcare works with any buereacracy. The current system attempts to limit costs by limiting service, though the costs just end up propping up the armies of paper-pushers, whereas a universal system would be so expensive that to keep it going would require strict rationing of services and/or attempted government control of variables that determine the likelihood of needing the services. Reason is that in either one, since costs are dispersed no one is ever sure of the price tag until it's too late, and our methods of organization -- attaching these things to employment -- encourage size & complexity.

Healthcare will never be "solved", by its nature there is no "solution" as we've come to expect. In the long run though, any plan that 1) made all costs OBVIOUS, 2) allowed people to form their own groups to get discounts WITHOUT having to be attached to a corporate entity, and 3) actively discouraged buereacracy would be miles better than current coverage or "universal" healthcare. I'm not sure how this would be organized, and it would no doubt cause some disruption in the intermediate term, but hey, sometimes you just have to pull teeth...

The vaccines proposal appealed most to me. Vaccines are one of those inventions that help society much more than they help the inventor--even if the inventor has a patent. Vaccines generarlly work for several years, meaning that the producer does not get repeat customers, and if everything goes well, a vaccine can result in the eradication of the disease, which then causes the vaccine market to collapse. To top it off, individual doses are generally pretty cheap.

The government already uses prizes (such as the DARPA challenges) to encourage innovation. I think this is a situation where such prizes would do immense good and wouldn't require any radical restructuring of existing institutions. I think this issue is outside of any "universal health care" proposal.

While most of Tyler Cowen's critiques of the current health care system are valid, I still see the major problems of the current system being issues of implementation. The major issue with all medical care is the idea of mitigating risk - both in terms of patient treatment and medical R&D.

Tyler is right about R&D, the easiest way to mitigate the cost of R&D would be to provide more public money for groups involved in the process - the problem that policy-makers will have to resolve before they move forward on spending increases is how to reduce the displacement effect on private medical research spending. Dropping millions of public funding will most likely force companies like Merck or Pfizer to spend more on non-lifesaving drug research (Viagra, etc.) and less on the kind of pharmaceutical innovation we are looking for. One suggestion would be to provide public R&D funding to joint private-public ventures or purely private efforts in exchange for the federal government taking a cut of the royalties.

Tyler is also right about the provision of health care - expanding the medicare entitlement is not a viable solution. One way of mitigating the risk of patient treatment would be to restructure the Medicare program away from patient-centricity to hospital-centricity. The idea would be emulate the British health care model to a limited degree - instead of providing a direct entitlement to the poor and elderly, the government would fund public hospitals. These hospitals would be paid annually based on the number of patients who qualify for Medicare that they treat and bonuses would be given for reaching more patients or recieving strong performance reviews. In theory, this would not disrupt the existant private health care system, as individuals who can afford it would most likely prefer the efficiency and broader coverage offered by private programs.

As for the Medicare drug entitlement, it would probably be best to scrap the whole thing rather than try to save it.

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Although I normally read the Washington Post, economist-rockstar Paul Krugman's recent column on the economics of healthcare caught my eye and I think everything should give it a read. He addresses the idea in the same way I have, in the context of risk/benefit analysis and risk-mitigation strategies - but he doesn't really propose a solution other than "use a free-market system."

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Unless someone copy/pastes a long excerpt on their own site, no one's going to look at that Krugman column.

It seems that lots of us have a lot to say on health care issues. Would that be a major issue that Freedom Democrats would want to address in pushing an agenda in 2006?

I'm actually rather apathetic about healt-care; howerver, it seems that no candidate (or organization) could be taken seriously by the Democrats without making proposals to expand medical coverage among the least well-off Americans.

While that is a good idea Logan and it seems like we could come up with some really innovative solutions, but I am afraid that health care is turning into the third rail of politics. That is just my impression, what does everyone else think?

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I am a freedom-lover.

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