Kevin Drum - 2012

Take 2: Does the Free Market Hold Down Healthcare Costs?

| Wed Jan. 11, 2012 9:55 PM EST

A couple of days ago I wrote a post about the cost growth of Medicare compared to the cost growth of private healthcare, along with a bit of speculation for the reason that private healthcare costs have grown faster. The post was a bit rushed, and I'll probably try to expand on it in the future. For now, though, I just want to present a couple of pieces of raw data comparing Medicare costs to private healthcare costs. First, here are the basic BLS figures on overall growth trends, with 1992 indexed to 100:

This tells us that overall costs of private healthcare have grown faster than Medicare, but it doesn't tell us why. It might be demographic, it might be because private insurers cover more procedures, or it might be due to cost growth of specific procedures. The latter is the one I'm most interested in at the moment, so here's a bit of data from a paper by James Robinson earlier this year:

We now know two things:

  • The overall cost of private healthcare has risen faster than Medicare over the past couple of decades.
  • The current price of specific procedures is higher for private insurers than for Medicare.

But here's what we don't know:

  • Has the price of specific procedures gone up faster for private insurers than for Medicare?

Unfortunately, it appears that time series data on specific procedures isn't available, so we don't really know whether private insurers have put as much pressure on providers to keep prices down as Medicare has. It's a good guess that they haven't, but you can't tell for sure from this data. What's worse, even if we assume they haven't done a good job of controlling costs, it's still pretty difficult to say why. These numbers are averages, and they vary by region, by level of competitiveness, by the possibilities for cost shifting, and so forth. More on this later.

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Obama v. Romney Is Going to Be a Tough Race

| Wed Jan. 11, 2012 3:42 PM EST

Yuval Levin over at The Corner;

I know we’re all supposed to think that the primaries are poised to turn out a weak Republican nominee and that President Obama will swoop in this fall and carry the day with some brilliant pincer move that simultaneously dubs the Republican too extreme, too moderate, too boring, and too weird…

I'm not picking on Levin here, but every once in a while I read something like this and I wonder who they're talking about. Is there anyone on Planet Earth who thinks that Obama is just going to waltz to victory in November? Who exactly are these pundits who have apparently been banging the drum about Obama's November cakewalk? Nobody I read, that's for sure. As near as I can tell, it's nearly unanimous conventional wisdom that this is going to be a very close race despite the fact that the Republican field is weak. Hell, Intrade has only intermittently put Obama's chances over 60 percent for the past year, and he's barely been better than an even bet for the past six months.

At the same time, I also happen to think that Levin is being a wee bit too pessimistic when he hauls out a few bits of polling and economic data that, he says, "suggests there is no self-evident path to re-election for the president." I think Obama's record is a little more popular than he thinks, that Republican obstructionism is a fatter target than he admits, and that Mitt Romney has some glaring weaknesses that Team Obama is going to rip into mercilessly. So Obama is hardly a dead duck. But he's not a shoo-in either, and I really don't think anyone over the past year or so has ever suggested he is.

A Rose By Any Other Name

| Wed Jan. 11, 2012 1:59 PM EST

From the Washington Post today:

An Iranian scientist involved in purchasing equipment for the Islamic Republic’s main uranium-enrichment facility was assassinated Wednesday when a magnetic bomb attached to his car exploded in morning rush-hour traffic, Iranian media reported.

....The killing bore strong resemblance to two 2010 attacks on nuclear scientists and came on the same day as a ceremony for the third anniversary of the killing of another professor, Massoud Ali Mohammadi, who also died in an explosion.

As far as I know, there's no firm evidence that the United States is responsible for this. Maybe Israel has planned and carried out all these attacks. Maybe there's some other explanation. 

But it's hardly farfetched to think that the U.S. is involved, one way or another. And if we are, it means we're in the business of deliberately targeting Iranian civilians for death, with the goal of frightening their scientists and thus slowing down Iran's nuclear program. There is, needless to say, a word that describes the act of killing civilians as a way of spreading fear and alarm. We all know what it is, don't we?

The Economic Consequences of Divorce

| Wed Jan. 11, 2012 1:28 PM EST

I can't think of anything super insightful to say about this, but the Pew Economic Mobility Project has a new fact sheet out that includes the chart below. In the early 70s, most women who got divorces suffered a large income drop while very few divorced men did. Today, the numbers are about equal. Likewise, the number of divorced women whose income increases substantially following a divorce has nearly doubled. The basic reason for this is pretty obvious, and the data itself isn't new, but it's still kind of interesting to see the raw numbers.

Jon Huntsman, the Moderate Radical

| Wed Jan. 11, 2012 12:25 PM EST

Ezra Klein on Jon Huntsman's third-place showing in last night's primary:

Huntsman's weak finish led many to suggest that the GOP was no place for moderates. But the truth is that Huntsman's campaign didn't prove that, or anything like it. For all Huntsman's signaling and hinting, his policy platform is no more moderate than Romney's. In fact, it might be less moderate.

Ezra goes on to explain that on a policy level, Huntsman is actually one of the most conservative guys in the race. And he's right. It's endlessly annoying to hear pundits refer to him as a moderate kind of guy without, seemingly, knowing anything about his actual political views.

And yet, it's not entirely baseless. Policy isn't the only thing that matters, after all, and I'd argue that Huntsman quite likely is moderate in two important ways. The first is the one that lots of people have already pointed out: he doesn't spend all his time making apocalyptic statements about Barack Obama being the anti-Christ and Democrats leading the United States into penury and decline. He says he believes in evolution and global warming rather than claiming these are vast conspiracies of the scientific community. This kind of thing matters.

But there's something else that matters even more, and that's the second way in which Huntsman is genuinely moderate. This is, granted, supposition on my part, but I suspect that Huntsman is more willing to compromise than most of the other candidates. He might want to cut the capital gains rate to zero, but if he could strike a deal with Democrats for a useful bit of tax reform that didn't include a cap gains cut, I think he'd probably do it. He's not beholden to the tea party base for anything, he's not committed to a worldview in which compromise is treason, and as president he'd be free to horse-trade and negotiate in normal presidential fashion. I'm not so sure that, say, Rick Perry or Newt Gingrich would want to, and I'm not sure that Mitt Romney would feel able to. This is a big deal.

Of course, he's not going to win this year, so none of this matters immediately. But we might see him again in 2016.

Tonight's Political Lesson: Nothing

| Wed Jan. 11, 2012 1:27 AM EST

I guess I'm expected to say something about tonight's primary. So here it is. Mitt Romney has always been the inevitable nominee. After Iowa, he continued to be the inevitable nominee. After tonight, he is, still, the inevitable nominee. In other words, nothing happened.

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Comment Registration: Boon to Mankind or Threat to Democracy?

| Wed Jan. 11, 2012 1:08 AM EST

I've been talking with the MoJo brain trust for a while about whether we should require registration for commenters. The pros and cons are fairly obvious, I think, and we've pretty much come to the conclusion that we should do it. Before we do, though, I wanted to run it by my readers. If you like the idea, which would probably improve the general tone of commenting, let us know. If you hate the idea because you'd have to register, let us know. This is your chance to weigh in.

In comments, of course.

Information Might Want to be Free, But Then Again, It Might Not

| Tue Jan. 10, 2012 7:14 PM EST

From Ars Technica:

Aaron Swartz [] was arrested Tuesday on charges of wire fraud, computer fraud, “unlawfully obtaining information from,” and “recklessly damaging” a “protected computer.” He is accused of downloading 4.8 million documents from the academic archive JSTOR, in violation of its terms of use, and of evading MIT’s efforts to stop him from doing so.

Swartz is a founder of the advocacy organization Demand Progress. In a statement, Demand Progress executive director David Segal blasted the arrest. “It’s like trying to put someone in jail for allegedly checking too many books out of the library,” he said. Demand Progress also quoted James Jacobs, the Government Documents Librarian at Stanford University, who said that the arrest “undermines academic inquiry and democratic principles.”

This affair has raised a lot of hackles among the infovore set, but I'm a little stumped about why I should be outraged. As James Joyner says, maybe this should have been a civil matter, not a criminal one (though Swartz did break into an MIT network closet to do all this), but beyond that does anyone really think JSTOR should just sit idly by as their entire archive is downloaded? Would the librarians at Stanford sit idly by if someone backed up a semi and started shoveling hundreds of thousands of books into it? Sure, there's no evidence that you're planning to steal the books. Maybe you intend to return them all in two weeks. But come on. Are we really all expected to be that stupid?

Likewise, Swartz may say that he had no intention of putting his 4.8 million documents online, but come on. It's a pretty safe assumption, no? Swartz's suggestion that he just wanted to perform a research project is a wee bit improbable.

As near as I can tell, Swartz is basically engaging in civil disobedience, publicly breaking a law that he considers unjust in order to generate publicity. Fine. But one of the tenets of civil disobedience is that you accept that you're breaking the law and accept the consequences. Now he is.

UPDATE: This story is actually several months old. Sorry for not noticing that.

The Week So Far

| Tue Jan. 10, 2012 5:38 PM EST

What have we learned over the past couple of days? A short list:

This is going to be a fun year, isn't it?

David Brooks and Obama's Dilemma

| Tue Jan. 10, 2012 3:16 PM EST

From David Brooks:

If you’ll forgive some outside advice, President Obama might consider running for re-election as Luthor.

Jeez, first he's a Kenyan socialist who hates America, and now Brooks wants him to run as Lex Luthor? This is the worst —

Oh wait. Not Luthor. Luther. As in Martin Luther, the 16th-century firebrand who assailed the corruption of the Catholic church and brought us the Protestant reformation. Except in this case, the federal government plays the role of Pope Leo X:

Life is unfair. Republican venality unintentionally reinforces the conservative argument that government is corrupt. Democratic venality undermines the Democratic argument that Washington can be trusted to do good. Liberalism has not expanded because it has not had a Martin Luther, a leader committed to stripping away the corruptions, complexities and indulgences that have grown up over the years.

....Make the tax code simple. Make job training simple. Make Medicare simple. Every week choose a rent-seeker to hold up for ridicule and renunciation. Change the Congressional rules. Simplify the legal thickets that undermine responsibility. If Democrats can’t restore Americans’ trust in government, it really doesn’t matter what problems they identify and what plans they propose. No one will believe in the instrument they rely on for solutions.

It's true that people don't trust government these days. But is it really because they think it's been captured by special interests? Maybe. But I'd like to see some actual evidence for this. Brooks has a bad habit of speaking ex cathedra about what's eating the American public and then moving grandly forward without even a passing acknowledgment that he's just guessing about this stuff. It's pretty annoying.

My own suspicion — and that's all it is since I don't intend to scour the academic literature to back this up — is that Brooks has a bit of the answer here, but only a bit. For starters, that "unintentionally" in the first sentence is pretty hilarious. There's nothing unintentional about this, and I'm quite sure he knows it. Beyond that, there's the fact that lots of people think too much government money is spent on the undeserving poor. There's the fact that government has pretty plainly not done much for the middle class over the past few decades, which is largely due to corporate dominance of the public discourse. This is a form of rent seeking, of course, but not the kind Brooks is talking about, I suspect. Plus, there are the trillions we've blown on a couple of disastrous wars, the near institutionalization of pretense and deception in Washington DC, and the financial crash of 2008.

But put all that aside for a moment. I happen to agree with Brooks that liberals would be well advised to place a lot of emphasis on making sure government runs efficiently. But there are two gigantic problems in the way. The first is that Republicans have very successfully undermined a lot of the traditional sources of Democratic funding (labor unions, trial lawyers) and Democratic working-class support (social conservatives, white Southerners). This means that Democrats have had little choice but to turn to corporate sources of funding if they want to remain in existence. That hasn't (yet) made them quite the cheerleaders of corporatism that Republicans are, but they aren't that far off.

Second, how exactly is all this simplification going to happen? Brooks is like a yo-yo on this, occasionally acknowledging that Republicans have become such insane obstructionists that nothing is possible, but then turning right around and wondering why Democrats don't get more done. Make the tax code simple? That's really not something that can be done without Republican help and Republican compromise. We all know how likely that is. Ditto for Medicare, job training, legal thickets (whatever that means) and everything else on his list. It's just impossible for one party to do this stuff even if it wants to. Hell, Democrats can't even get the Republican leadership to acknowledge that long-term deficit reduction requires both spending cuts and tax increases. That's about as butt-simple and indisputable as it's possible to get, but there's no one home on the other end of the line to hear it.

On the other hand, I'll confess that I sort of like Brooks' "rent seeker of the week" idea. I'm not sure how much it would accomplish, but it would be fun to try. My guess is that Brooks would like it right up until the week that Obama chose someone or something that Brooks happens to like. Then it would be a demagogic attack unworthy of a president. This stuff is harder than it looks.