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Megan McArdle's Case Against National Health Insurance. Sort of.

In my chat today, a reader asked me to respond to Megan McArdle's lengthy case against national health insurance. The problem is that, well, there's not a lot to specifically respond to. In 1,600 words, she doesn't muster a single link to a study or argument, nor a single number that she didn't make up (what numbers do exist come in the form of thought experiments and assumptions). Megan's argument against national health insurance boils down to a visceral hatred of the government. Which is fine. Megan is a libertarian. That's, like, her journey, man. But her attack on national health insurance seems a lot more about libertarianism than it is about national health insurance.

Megan has two primary concerns. The first is that national health insurance would succeed in reducing health-care costs, and that would limit the rewards available for medical innovation (drugs, devices, etc), which would in turn reduce medical innovation and prevent future generations from enjoying wonder drugs. "If you worry about global warming," she writes, "you should worry at least as hard about medical innovation."

Second, national health care gives elites license "to wrap their claws around every aspect of everyone's life." Her primary example is obesity. Megan believes that national health insurance will give the government license to decide that we can never really want a second chocolate eclair. She also believes that the real reason most every epidemiologist in the country is worried about obesity is because they hate, and are disgusted by, poor people.

I bet you think I'm kidding about that last bit. I'm not. Let's take these in turn. Or try to, anyway.

Megan's first argument is properly understood as a simple application of economic theory. If national health insurance reduces the profit reward for medical innovation, medical innovation will decrease.

This is not an argument for or against national health insurance. Medicare, for instance, is undoubtedly America's largest purchaser of new drugs and devices. That's a big part of the reason that it is so expensive. Without Medicare, in fact, there would be a much smaller market for medical innovations, as a substantial portion of the elderly would not be able to afford heath-care insurance -- much less unlimited health-care insurance -- and could not pay for these innovations. National health insurance for the elderly, in other words, is one of the primary drivers of medical innovation.

Nor is there any reason to believe the status quo -- which Megan implicitly favors -- optimized the dollars we devote towards medical innovation. Pharmaceutical companies, for instance, spend less on drug research than on administration and marketing. You could say that administration and marketing increase their profits, which in turn let them spend more money researching drugs. But if research is so important, then maybe the profits being enjoyed by the industry are in fact too small.

In 2002, the pharmaceutical market totaled $200 billion in the United States. Maybe we should be giving them another $50 billion in grants? Or maybe not? Why? Why not? And what about the evidence that drug industry innovation is declining? And what about the defense industry? For all its waste, elevating the U.S. government to sole purchaser seems to ensure a much-higher rate of military technology innovation than if we left it to the private sector. Why wouldn't that apply to health care?

Megan doesn't say. Nor does she say whether the current system works well to maximize innovation. Or what an innovation-oriented system would look like. Or how much of GDP we should spend on innovation. Or what would happen to innovation if Medicare and Medicaid collapsed and the medical industry lost about 80 million purchasers. Or what would happen if universal health insurance brought 50 million new customers into the system. The fact that she is concerned about innovation only insofar as she can shoehorn it into an argument against national health insurance leads me to believe she is not very concerned with innovation at all.

As for Megan's other argument ... I'm sort of at a loss as to the appropriate response. A wealthy white elite, she writes that national health insurance is "a way to extend and expand the cultural hegemony of wealthy white elites." Her argument is that "when you listen to obesity experts, or health wonks, talk, their assertions boil down to the idea that overweight people are either too stupid to understand why they get fat, or have not yet been made sufficiently aware of society's disgust for their condition." I'd be interested to know how many obesity experts Megan has listened to. My guess: very, very few.

I actually do talk to public health experts. Frequently. I know, for instance, that the Rudd Center for Food Policy and Obesity, which is based out of Yale, has policy briefs arguing that weight discrimination is real, it is pervasive, and it is properly understood as a social justice issue. Does Megan? If she does, she's not mentioning it. But it seems like the sort of thing you'd want to address if your argument is that obesity researchers are simply revolted by fat people and want them to face more social stigma.

Indeed, none of my many talks with obesity researchers have touched on the issue of the poor being idiots. Nor do they seem to think that the obese are insufficiently aware of society's aesthetic standards. Megan doesn't have straw men here. She has invented imaginary friends for her argument.

Rather, the obesity researchers I know believe a number of complicated and dispiriting things. One is that the human brain is wired to protect against the dangers of caloric scarcity. As a species, we have evolved to maximize caloric intake, to make the most of periods of abundance.

The problem is, we now live amid constant abundance. Food is not only available, but cheap. It is the center of our social lives and the respite from our workdays. It is the way we spend time with our families and the way we connect with our culture. It is how we meet mates and hang out with friends. Corporations spends hundreds of billions of dollars developing ways to make food taste better and creating advertising campaigns to make us want it more. Restaurants and drive-throughs and frozen foods have reduced the energy required to create a meal. Portion sizes have shot up. And even as our caloric inputs have grown, our expenditures have decreased. We drive rather than walk. We sit rather than stand. We work at desks rather than in fields. This is why obesity experts think Americans are fatter. Megan may, again, be aware of this research. If so, she's not letting us know about it.

Nor does Megan suggest she understands why health wonks or obesity experts spend their days -- rather than write the occasional dismissive blog post -- on this issue. For all her talk of elitism, poor communities are being ravaged by chronic disease. Type II diabetes in particular. These diseases are highly correlated with obesity. The reason people focus on obesity is that, in general, it comes first, and so you can address it earlier, and the things you do to prevent obesity -- better diet, more exercise -- are the things you do to prevent chronic disease.

It's also worth noting the disconnect between Megan's first argument and her second. In her first argument, she is worried that future generations will not have access to the very best medical technology. In her second argument, she is worried that the government will swoop into poor communities and ... give them access to medical technology, and develop programs to reduce the incidence of chronic disease based on the best preventive health-care research. That will interrupt their natural state of being fat and sick, and that's pretty much the definition of imperialism.

I've left out the last part of her essay because, again, I'm not sure what to do with it. Eventually, she stops saying that wealthy whites will simply sneer at poor blacks and decides that national health insurance is one-stop before fascism. We learn, for instance, that a national health insurance program will lead to the government deciding we can't eat a second chocolate eclair. It's like she totally forgot that France existed. And that's only a few sentences after she writes that national health insurance will remind us that "the elderly are also wasting a lot of our hard earned money with their stupid 'last six months' end-of-life care." It's like she totally forgot that Medicare existed.

But I don't believe Megan is unaware of France or Medicare. I don't believe she is incapable of understanding why people care about chronic disease or think obesity is a problem. I haven't seen any evidence that she's interested in medical innovation for its own sake or has thought hard about how to maximize it. As such, I don't really think Megan's post is an argument against national health insurance. It's not even really about national health insurance. It's about the government as it appears to a libertarian, if not to the rest of us.

By Ezra Klein  |  July 30, 2009; 4:21 PM ET
Categories:  Health  
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Comments

Ezra, that was brilliant and timely. I was just discussing the same piece with a friend who seems to think of MM as a Solon of health care reform, which she is not -- clearly.

Posted by: mrmoogie | July 30, 2009 4:36 PM | Report abuse

McArdle glib dimwit, film at eleven.

Remember, she's already run with the "screw the old and sick" line, showing where her priorities lie, which makes her a colossal hypocrite as well as a deeply silly and shallow person.

Can you just ignore her from now on?

Posted by: pseudonymousinnc | July 30, 2009 4:38 PM | Report abuse

Damn, Ezra. Tell us how you *really* feel.

Posted by: charlie14 | July 30, 2009 4:41 PM | Report abuse

A thorough pounding, if I do say so.

-g

Posted by: user435 | July 30, 2009 4:42 PM | Report abuse

McArdle's going to need some aloe for that burn.

Posted by: PorkBelly | July 30, 2009 4:42 PM | Report abuse

Wow, you're sassy today.

Posted by: ErininAtlanta | July 30, 2009 4:43 PM | Report abuse

That was probably longer than her post and you didn't really say anything.

You're basically just a control freak with really stupid ideas about how to help people.

You should actually read The Fountainhead. If nothing else it could help you out with making logical arguments. You could always try to model yourself off of Elsworth Toohey. There could be some profit in that for you.

Posted by: fallsmeadjc | July 30, 2009 4:51 PM | Report abuse

That was way too intellectual, well written and based in reality for the Washington Post. Don't let Fred Hiatt know you wrote that. He'll make sure you get replaced with Jonah Goldberg.

Posted by: cbcpapa | July 30, 2009 4:52 PM | Report abuse

"Tell us how you *really* feel."
Imho it's possible that this is how Ezra really feels. You know, he isn't very objective when it comes to McMegan. I remember receiving a very sharp rebuke from him once when I wrote something like "McArdle is really dumb"...

Posted by: Gray62 | July 30, 2009 4:54 PM | Report abuse

Thanks for the post, Ezra. McArdle's piece about national health care reform exhibits exactly the same flaws as 80 percent of her blogging--it is untethered to actual facts and simply contains a series of assertions based on a priori assumptions about how the world ought to work if we assume that the tenets of free-market fundamentalism are always true.

On the rare occasions McArdle does allude to a fact, it is almost always gleaned from introspection. In other words, she describes how she feels about something and asserts that, obviously, everyone in the world must feel the same. And then she expresses irritation that those crazy liberals can't grasp her simple, irrefutable logic.

Posted by: KWeberLit | July 30, 2009 4:55 PM | Report abuse


Did you read her 'take down' of Warren's bankruptcy study? It's amazing how she doesn't understand the difference between numbers and percentages in an article so tightly focused on the difference between numbers and percentages. Dazzlingly incoherent really.

Posted by: ThomasEN | July 30, 2009 4:56 PM | Report abuse

Megan's post was painfully light on actual stats and painfully heavy on speculation, but this part from Ezra is just unconscionably bad:

"Without Medicare, in fact, there would be a much smaller market for medical innovations, as a substantial portion of the elderly would not be able to afford heath-care insurance -- much less unlimited health-care insurance -- and could not pay for these innovations. National health insurance for the elderly, in other words, is one of the primary drivers of medical innovation."

Yes, national health insurance that operates with practically zero cost controls, has an unfunded liability of $90 trillion, and pays for a lot of very expensive, needless and possibly harmful treatment. Are you suggesting that national health insurance should operate like Medicare does today? Because if you are suggesting that we bankrupt the country, and if you're not then your point is a ridiculous non-sequitur.

Posted by: ab13 | July 30, 2009 5:04 PM | Report abuse

So if it's immoral to deny insurance claims then how is the Government going to control costs? What percentage of medical expenses will they cover? 100%? How will they prevent fraud? If they approve everything then what will stop people from submitting fraudulent claims? How does France handle this issue? Medicare and Medicaid haven't figured it out.

Posted by: fallsmeadjc | July 30, 2009 5:06 PM | Report abuse

ab: I'm not suggesting that at all. But that's the problem with the innovation argument. Megan is saying that the reason we shouldn't have national health insurance is that it would mean we spend less money on medical treatment and spending money on medical treatment is good. But a) we can't afford it and b) there's no correlation between that point and an argument against national health insurance.

These aren't tensions for me to resolve. I don't believe the innovation argument. But in a post about national health insurance that relies on the innovation argument, you actually do have to resolve them.

Posted by: Ezra Klein | July 30, 2009 5:12 PM | Report abuse

I don't know why Megan "I got mine, bee-atch, screw the rest of you" McA still gets a platform, let alone is taken seriously.
"Conservatives" have learned that you just have to lie to set the terms of the debate.

Posted by: AZProgressive | July 30, 2009 5:14 PM | Report abuse

So do you think John Murtha's nephew is more likely to come up with the next great medical innovation than a private company that acquires its own capital?

Posted by: fallsmeadjc | July 30, 2009 5:15 PM | Report abuse

Wow. File this one under "sit down and shut up."

It's annoyingly disingenuous when someone back-rationalizes their beliefs. Kinda reminds of George Will's entire journalistic career.

Posted by: davestickler | July 30, 2009 5:16 PM | Report abuse

OK, fair enough, but that does mean that your point was a non-sequitur. Your point was that Megan is wrong to suggest that national health care would stifle innovation, because Medicare drives a lot of innovation. But to do so is to conflate Medicare with the national health insurance system we would create, which would by necessity be much different than Medicare. The very reason that Medicare drives innovation is because it does not control costs, which a national plan would be forced to do.

Posted by: ab13 | July 30, 2009 5:23 PM | Report abuse

fallsmeadjc wins for most subtle sarcasm.
I hope.
Time, again, EK, to show the graph of how Medicare costs have grown more slowly than private insurance (even though private insurance will throw us under the bus as soon as we're sick).

Posted by: AZProgressive | July 30, 2009 5:25 PM | Report abuse

I still don't get how empowering a public entity with no cost controls is the best way to help people get healthcare services.

If it does have cost controls then how is it different than private insurance? People will hate it too if it denies their claims.

A public option is not viable if you can't resolve the fraud and waste issue that has plagued Medicare and Medicaid.

Did you just say we can't afford medical innovation? Should we all live in caves since we can't all afford mansions? I don't understand your morality.

Posted by: fallsmeadjc | July 30, 2009 5:28 PM | Report abuse

AZProgressive, why does it matter if they are both unsustainable?

Posted by: ab13 | July 30, 2009 5:29 PM | Report abuse

File this post under "Reasons I stopped reading Megan McArdle and am leading a better life because of it". Though it is still fun to read the occasional smackdown of her glibertarian nonsense, so kudos to Ezra.

Posted by: Chris_O | July 30, 2009 5:35 PM | Report abuse

Our wonderful healthcare system cuse most of the bankruptcies in the nation, will bankrupt the government in a decade and has left thousands consigned to a life of poverty paying for medical care for a sick family member. For profit healthcare is for profits, not patients. Specialists graduate at a 2-1 ratio to GPs the opposite of need because specialists earn and charge more. Doctors make more coin for more tests pushing the envelope. You hear garbage stats like Rove in WSJ saying 91% of Americans are insured (307 million census less 20 million illegals) deducting illegals that are not in census figures. Our high end care costs twice as much as most industrialized nations ranking us 37th in overall quality. Medicare's low rates put doctors at a loss they make up with more tests and billing that does not lose money making care much more expensive than needed. Hospitals will knowingly perform duplicate tests on the same patient ordered by different specialists for the profit. Insurance companies make more profit by denying care and pushing the hard cases onto non-profits and government. For profit healthcare has the largest buyer of prescription drugs paying the highest price in the world due to the industries too effective PACs. Obama may not be right, but staus quo certainly is wrong.

Posted by: jameschirico | July 30, 2009 5:41 PM | Report abuse

So when are you going to admit that ridiculous 428% profit increase isn't true? You wouldn't want a lie floating around even it supports your cause would you?

Do you really think Government bureaucrats will be able to direct capital towards the most promising medical innovations? Profit considerations have proven to be much better drivers of innovation than political considerations. Is there a HEART VALVE TO NOWHERE in our futures?

Posted by: fallsmeadjc | July 30, 2009 5:42 PM | Report abuse

Um, fallsmeadjc, I hate to break it to you, but Murtha's nephew was running a private company--albeit one on corporate welfare. The correct parallel would be a scientist at an R1 research university vs. a drug company scientist. As for who's more likely to come up with a cancer cure, it's impossible to say. But if it is the lady at Novartis, you can bet that she's helping herself to a ton of basic research funded by the taxpayer. So, even when a private researcher scores big, the real cost of developing that cure was borne substantially by the public.

Posted by: lbeyerstein | July 30, 2009 6:36 PM | Report abuse

Megan McArdle seems racist - why only White people should bother about obesity as brown Indians do not have brains to see what is wrong with that? With that logic Atul Gawande should not exist!

One mind craved desperately for such a thorough pounding of MM (Ezra is earning his salary) whereas other mind tells me that this much clean criticism, she does not deserve.

I mean she is an intelligent b**h always wanting to expose other people's underbelly. But looks like 'going against stream' is the only religion she has.

May be she is Rush Limbough of intellectuals or Anna Coulter for Atlantic.

Posted by: umesh409 | July 30, 2009 6:41 PM | Report abuse

I wonder what Ms. McArdle thinks of the (government-run) NIH and its role in spurring medical innovation.

Posted by: iluvsummer | July 30, 2009 6:43 PM | Report abuse

McArdle called Matt Taibbi the Sarah Palin of financial journalism. With this post, you've confirmed that she's the Palin of health opining.

Thank you for demolishing the incoherent rants of an overrated free-associater.

Posted by: pasqualefrank | July 30, 2009 6:51 PM | Report abuse

"It's about the government as it appears to a libertarian, if not to the rest of us."

This is such an important point for the whole libertarian/Republican gang. These people are really extreme and really willing to grossly and regularly mislead and downright lie, because they have to to gain support for their policies.

Very few members of the general public are willing to stand for great suffering and decrease in the quality of life for themselves, their families, and the vast majority to avoid even tiny losses of economic freedom for a few. So these extreme Libertarians have to make up other reasons to try to get public support.

I knew Tyler Cowen's position immediately on high frequency trading before looking. Even if it cost society trillions per generation and led to regular crashes, he would oppose restrictions because it would restrict the economic freedom of a relatively tiny number of on average extremely wealthy people.

Posted by: Richard722 | July 30, 2009 6:51 PM | Report abuse

So, MM, so-called and self-proclaimed libertarian, thinks that if we keep all the government-granted monopolies in place, we'll be rewarded by "innovation" that improves our health. That's assuming, of course, that the Police State also does its job and makes sure we don't dodge high Dromolol prices by growing our own pot, or come back from a weekend in Canada with a pocket full of cheap drugs (made in the US and sold in Canada at a much lower, but still profitable, price). Thatsa some libertarianism, all right.

But MM isn't just a deluded fraud, she is also massively wrong. With a very few exceptions, good health is composed of maintaining our natural good bodies. This, quite literally, is not rocket science, and, even better, you don't get your payoff when you're on the point of death, keeping in good health pays off all the time in living a better life. With really good health care you go to the doctor less often, not because you can't afford it, but because you don't need it.

MM's innovation rap makes about as much sense as suggesting that improvements in getting around are best discovered by more funding for a mission to Mars, because that's where the innovation happens. That kind of talk has a lot of appeal to people with a mental age of about 9, who are halfway through Heinlein and just discovering Ayn Rand. There's nothing wrong with that, of course, if you actually are 9, but children can't really expect to be included when the grownups are talking about a serious problem.

Good on Ezra for taking a harsh look at MM's maunderings. I'm sure he finds it a little boring, but someone with a platform has to do it once in a while.

Posted by: serialcatowner | July 30, 2009 6:58 PM | Report abuse

Ouch.

Posted by: CorkExaminer | July 30, 2009 7:31 PM | Report abuse

Let's see. In this piece, Ezra is snide, unserious, and curiously swaggering. Not STRICTLY ad hominem, the post comes awfully close it. These are characteristics somewhat inconsistent with a post on the subject of health care reform, no?

Posted by: RenaissancePopes | July 30, 2009 7:35 PM | Report abuse

Man Ezra, you were righteously indignant--something Aristotle (in an aside in the Nicomachean Ethics) accords as a virtue. As do I. Well done.

Posted by: Castorp1 | July 30, 2009 7:43 PM | Report abuse

"It's about the government as it appears to a libertarian, if not to the rest of us."

This is such an important point for the whole libertarian/Republican gang. These people are really extreme and really willing to grossly and regularly mislead and downright lie, because they have to to gain support for their policies.

Very few members of the general public are willing to stand for great suffering and decrease in the quality of life for themselves, their families, and the vast majority to avoid even tiny losses of economic freedom for a few. So these extreme Libertarians have to make up other reasons to try to get public support.

I knew Tyler Cowen's position immediately on high frequency trading before looking. Even if it cost society trillions per generation and led to regular crashes, he would oppose restrictions because it would restrict the economic freedom of a relatively tiny number of on average extremely wealthy people.

Formerly Richard722

Posted by: RichardHSerlin | July 30, 2009 9:18 PM | Report abuse

Ezra,
Forget about McMegan, how about this old acquaintance:
http://www.youtube.com/watch?v=FxKD9t-G36w
Turns out that on page 425 of the House bill they have mandatory counseling sessions pushing suicide for elderly and seriously ill. I'm not making this up. McMegan is just a sweetheart.

Posted by: anatol1 | July 30, 2009 11:16 PM | Report abuse

This is a nice takedown. But you know, I do think she forgot that France and Medicare existed. More precisely, in those moments she got so wrapped up in her argument that she couldn't imagine there could be flat out counterexamples to her logic. She literally put out of her mind that some nations have single-payor systems and so whether they behave the way she says they must is relevant to her argument.

But I would also challenge you, Ezra, to start using more numbers and less hand-waiving when discussing insurers. Several times recently you have claimed that immense profits are a major problem and source of our high costs. What is the evidence of that, when insurer profits are about 1% of our national spend on health care? When private insurer admin is about 5% of our national spend on health care? When private insurers only pay about 1/3 of the health care bill in the first place? I mean, if the health care bill is split roughly evenly between private insurers, out-of-pocket payments and government payments, why single out private insurers as the part of this puzzle that would best disappear in an ideal system? Did you forget that the Netherlands exists?

Yes, I know you've said that the public plan is not the most important part of healthcare reform, and I commend you for that. Not an easy thing to say on the left. Health care reform is indeed the most important part. I just think you revert to a kind of knee-jerk scapegoating sometimes with respect to private payers. There is enough to criticize with how our private insurance system (and its fee for service payments) work that you don't have to overhype the role of insurer profits or admin as a source of cost growth.

Posted by: jdhalv | July 30, 2009 11:18 PM | Report abuse

Right-wingers and libertarians have absolutely nothing to contribute to the debate on health care reform for the simple reason that the best solutions around the world are ones that are ideologically unacceptable to them.

The only reason I can imagine McArdle dragging in obesity and poor people into the argument is simply a give a gloss of populism to what is in reality a viewpoint that is both callous and harmful the further down the economic ladder you go.

Posted by: leoklein | July 30, 2009 11:46 PM | Report abuse

Food is not only available, but cheap. It is the center of our social lives and the respite from our workdays. It is the way we spend time with our families and the way we connect with our culture. It is how we meet mates and hang out with friends. Corporations spends hundreds of billions of dollars

Ezra is a moron. Does Ezra ever wonder why food is so cheap? Why would the corporations increase portions? If corporations are all powerful, they would do better to restrict production and raise prices. The excess food is a result of the market system meeting the demands of consumer.

Posted by: HayeksHeroes | July 31, 2009 12:51 AM | Report abuse

McArdle is just a younger female face on the delusional libertarian problem. I believe considering their "ideas" leads one to get distracted from the lack of a relationship of those ideas to a consensual reality. It is much quicker to simply establish or not establish whether they can acknowledge what is obviously true (in this case, Medicare and the French/German/English/Swedish/Dutch medical systems exist). Libertarians start from an adventurous hypothesis that has the ring of truth but is most often false. To consider those ideas too long, I believe, is ultimately a waste of time and feeds their status as pundits. We need a lot more left-wing pundits (not timid liberals), who acknowledge the necessity though not necessarily the optimality of government's role in a lot of areas of life. An antidote to the legitimation of the ideas of so many libertarian eccentrics.

Posted by: michaelterra | July 31, 2009 3:13 AM | Report abuse

Reductil contains sibutramine as an active ingredient, which is an appetite suppressant. It helps to increase levels
of neurotransmitters, serotonin and noradrenaline, that act in hypothalamus part of the brain.
Reductil Sibutramine can lead to suppression of appetite.
People lose weight because of this action that targets appetite and they eat less food. More information on weight loss medication is available at http://www.onlineclinic.co.uk/reductil.html

Posted by: Katie448 | July 31, 2009 7:22 AM | Report abuse

Lets try an analogy...

Let's say you had been studying an inefficient chemical refinery for a few months. You concluded that it should be run just like a more efficient European refinery as directed by the US Congress and admnistered by government officials. The engineers at the refinery would not take you very seriously as you would be likely to blow up the plant.

If you want to reform a system as important and complicated as our health care system, I suggest doing it in a series of reversible incremental steps, ideally piloted in the states. If it doesn't work in the states (say like most state attempts so far), don't nationalize it.

Posted by: DavidBerkian | July 31, 2009 8:46 AM | Report abuse

fallsmeadjc wins for most subtle sarcasm.
I hope.
Time, again, EK, to show the graph of how Medicare costs have grown more slowly than private insurance (even though private insurance will throw us under the bus as soon as we're sick).

Posted by: AZProgressive | July 30, 2009 5:25 PM | Report abuse

hello? Anybody in there? COST SHIFTING. that's why. Talk to hospital administrators and ask them how many dollars are shifted from medicare and medcaid and unreimbursed Charity care to private insurance. I love the idea of a co-op competing against private insurance because once that's in place we'll find how ineffective the government really is.

Just make sure they pay premium taxes as well. a completely level playing field with NO gov't fallback taxing power and I'm fine with that. More competition like that is good. Oh also they should institute a medical loss ratio national requirement of 85%.

I love that progressives pushing for a strong public option don't like that the Blue Dogs are requiring the HHS Secretary to "negotiate" with docs and hospitals. Why should government fight fair when we can bully people.

People love to run to the "people get dropped" argument by private insurers but they were the first on board with a repeal of pre-ex as long as it comes with an individual mandate.

Its simple adverse selection people. you don't get anything for free.

Posted by: visionbrkr | July 31, 2009 9:14 AM | Report abuse

do you progressives and liberals even pay attention. IF you are lucky enough to have private insurance and work hard enough for it do you see the letters you get from your private insurance company (Blue Cross, Aetna United, Cigna, whoever) that states that XYZ hospital network is leaving your plan in 90 days. Do you KNOW what motivates that? I'll tell you.

First they get their annual LOWER reimbursement from Medicare, Medicaid and Charity Care then the hospitals, to stay solvent have to figure those costs and how much of those costs need to be "SHIFTED" to a requirement to private insurance companies. So then in each state they immediately go to the largest insurer and demand from between a 25% to 100% increase in their reimbursement. When the insurer gets done laughing and tells them that to do that it would FORCE them to raise rates to policyholders by too large a number. They then are required by law to notify members taht XYZ hospital network is requesting to terminate their contract as of 90 days out. Then one of two things happen. Option one is they settle on a high number and raise rates because of it or two the hospital leaves the network.

Its amazing to me how many people out there truly don't know how the system of this works and its been going on for at least 10 years. My fear is how much of the 500 billion or so being saved in Mecicare reimbursements going to cost you and me with private insurance.

Posted by: visionbrkr | July 31, 2009 9:21 AM | Report abuse

To her credit, I do believe McCardle got through her post w/o mentioning her brief period of unemployment after completing graduate school. That, in and of itself, is a miracle.

Posted by: BeavisfromMontana | July 31, 2009 9:38 AM | Report abuse

"In 1,600 words, she doesn't muster a single link to a study or argument, nor a single number that she didn't make up (what numbers do exist come in the form of thought experiments and assumptions)."

Yep, sounds like every other thing ever written by Ms. McCardle. Why that idiot has a job is beyond me.

Posted by: tinare | July 31, 2009 9:57 AM | Report abuse

"And what about the defense industry? For all its waste, elevating the U.S. government to sole purchaser seems to ensure a much-higher rate of military technology innovation than if we left it to the private sector. Why wouldn't that apply to health care?"

Because there is such demand for military technology in the private sector, right? I'd back off that argument a bit; at least until small businesses begin buying F-16's for all their employees.

Posted by: Rayvan | July 31, 2009 10:16 AM | Report abuse

This is an extremely poorly written piece, and it evades the two central issues.

1. The U.S. indisputably overwhelmingly dominates in medical and pharmaceutical science research. Arguing about percentages spent on marketing vs. research is quibbling. If a private company sees fit to divide their resources that way, who are you to order them to do differently? Their objective results in terms of bringing drugs and technology to market are undeniably superior to that of every other country on earth, and their success would be abrogated by your "health care plan."

2. Fat people have a right to be so. It is simply not the prerogative of government to interfere in the individual's dietary decisions. This would be a gross violation of individual rights, and it would have to happen to some extent under socialized medicine to cut down out-of-control costs.

Posted by: G418 | July 31, 2009 10:54 AM | Report abuse


visionbrkr,

"I love that progressives pushing for a strong public option don't like that the Blue Dogs are requiring the HHS Secretary to "negotiate" with docs and hospitals. Why should government fight fair when we can bully people."

From your subsequent comment it seems obvious that you are not unaware that the private insurance companies have written their provider contracts in such a way as to deem in all providers into any new products. There is no indication, at this point, that 'new products' would preclude the Insurance Exchange products. That is, you're asking the public option to concede something you know the private insurers will not concede.


Posted by: ThomasEN | July 31, 2009 11:25 AM | Report abuse

Ezra,

In a few years everyone will either take the journey to libertarianism or to total communism. Megan has just gotten there sooner.

According to the Social Security Administration, by 2050 there will be approximately 2 workers for every retired beneficiary. Social Security, Medicare, and Medicaid are going to be insolvent. Sorry, but ObamaCare will only make the nation’s budget situation worse.

Posted by: AustrianSchool | July 31, 2009 11:46 AM | Report abuse

thomasEN,

i'm not 100% sure I follow you.

Give me an example of what you mean by this:

That is, you're asking the public option to concede something you know the private insurers will not concede.

Posted by: visionbrkr | July 31, 2009 11:47 AM | Report abuse

Mr. Klein,
You seem to be being disingenuous in your comment to MM's point about the attacks on obesity. It is not that she fears the poor or obese getting healthcare, it is that if the government (read taxpayers) are paying to help keep all people healthy, than there will be an increase in the number of people who look to limit individual behavior that may lead to unhealthiness. This is the transfat argument, no smoking rules (separate from secondhand smoke arguments), taxes on sodas (and the like).

Posted by: jnewman418 | July 31, 2009 11:52 AM | Report abuse

From your subsequent comment it seems obvious that you are not unaware that the private insurance companies have written their provider contracts in such a way as to deem in all providers into any new products.


no from my understanding providers are allowed and DO contract seperately with say an HMO contract, a PPO contract etc. That's part of the confusion that works for providers but confuses the layperson who always asks, "Do you take my insurance?" Well sure we take it and whatever it doesn't pay, you pay. Too often people don't realize they should ask "Do you PARTICIPATE with my insurance". There's a subtle difference that people don't get. You want another reason for medical bankruptcy, that's another one.

Posted by: visionbrkr | July 31, 2009 11:59 AM | Report abuse

and going on in this moment is the House and Energy commerce committee is an ammendment looking to give preferences to those that live healthy similar to auto insurance that "rewards" safe drivers and thus rewarding "healthy habits" similar to what has saved Safeway MILLIONS in cost. The republicans are in favor. The democrats are against it.

Again we'll be helping the lazy fat slob who continues to eat cheetos all day long.

I can't wait till they ram this down our throats, it fails miserably and then the liberal democrats won't see the light of day for another 40 years.

Posted by: visionbrkr | July 31, 2009 12:07 PM | Report abuse

Quite the thorough sense-smacking.

Posted by: zosima | July 31, 2009 12:13 PM | Report abuse

Ezra, there's a cultural reason why lifestyle nitpicking isn't common in France despite their health care policy, while it's feared in the U.S. Here, there's a strain of thought that social program spending, so as to restrain costs, should come with strings attached in terms of how people getting the benefit of the spending live their lives. This isn't a left/right thing -- some liberals state this in terms of health care spending, some conservatives use it w/r/t welfare programs.

Call it a hunch, but maybe people wouldn't equate a national health insurance program with such state nitpickery if the people who advocated such a program made a point of fighting off those in their ranks who would engage in it. Have you considered that?

Posted by: toiletminded | July 31, 2009 12:16 PM | Report abuse

Existing contracts between insurers and providers, say the Blues, aren't (necessarily) product specific. They use "deem in" language. There aren't product-by-product contracts; there's one contract (again, often, not always). The contract will say that Our Lady of 115th Street Hospital will be part of Blues HMO, the Blues PPO, the Blues Gold HMO, the Blues Super Platinum PPO, the Blues National HMO Ultra, AND it'll say "and any new Blues products." That way, their network is already in place for those new products. Now, the new insurance exchange products would be sailing in based on network negotiations done earlier; at least network wise.

Now, it isn't always as common for the fee schedule to be 'deemed in' as well, but it often is. If the new product is a new HMO product, already negotiated HMO rates can be used; likewise w/PPO. Though some contracts require an amendment for any new product. On a totally anecdotal basis, I would say that existing contracts give private insurers an Insurance Exchange network that's 95% built, and fee schedule negotiations that are maybe 90% already set (that is, 90% that don't require a new amendment).

A long way of saying the blue dogs are starting the public option in the hole, not at a level playing field.

Posted by: ThomasEN | July 31, 2009 12:38 PM | Report abuse

thomasEN,

thanks for the clarification on the question.

Actually in my understanding there's a difference between the public option and the exchange.

Based upon which committee you look at the "public option" will be either medicare, medicare plus 5% or negotiated rates.

All new deals.

The exchange is seperate.

IMO medicare, medicare +5 is less stringent on the public plan and will give them an unfair advantage of cost.

negotiated costs are more fair but it will start the public plan at a disadvantage because they'll have to play catch up to the systems and efficencies (yes i used that word) in the already in place insurance systems.

but don't fear. our taxes will pay for the public plan's set up.

Also i've got a question for all the proponents of a STRONG PUBLIC OPTION.

If we're not forcing doctors to participate and we get rates they can't survive on (survive being a relative term for doctors) and we only get say for argument's sake 50% participation of providers nationwide in a public plan exactly what is the reason if almost NO ONE's doctors participate in a public option?

haven't we then just spent BILLIONS in set up costs for another wasteful government program???

Why not instead put all provisions in place and instead of a public option FORCE insurers to divest themselves of all companies like Ingenix and require them to adhere to a strict 85% medical loss ratio? Wouldn't that work much better.

Posted by: visionbrkr | July 31, 2009 12:57 PM | Report abuse

@fallsmeadjc:

"You should actually read The Fountainhead."

In the future, as a service to other readers, could you put this sentence at the *top* of your comment, instead of at the bottom.

That way we'll know to ignore you.

Thanks!

Posted by: antontuffnell | July 31, 2009 1:10 PM | Report abuse

I co-sign what antontuffnell said re: the Randroid garbage. If you're going to recommend a book, it shouldn't be fiction. I'd suggest "Studies in Mutualist political economy" myself.

Posted by: toiletminded | July 31, 2009 1:18 PM | Report abuse

Beautifully done, Ezra.

Posted by: Janine1 | July 31, 2009 2:49 PM | Report abuse

I had never read anything written by McArdle before this piece. I was astounded.

The idea that someone pays her to produce that kind of mindless gibberish is truly depressing.

My jaw dropped when I read her characterization of obesity experts. Then I realized that if she has ever spoken to an obesity expert (something I doubt), it was probably one who worked for a Right Wing think tank. However, my expectation is that she just made the whole thing up based on what she's heard her friends say about obese people. McArdle strikes me as one of the white elites she claims to be so worried about.

I've never had an appetite for tripe. When it comes to McArdle, I'm going to fast.

Posted by: treadlightly | July 31, 2009 3:16 PM | Report abuse

How dare you resort to transparent reasoning and evidence. This is a BLOG after all, only opinions matter, right?

Posted by: Groundhogday1 | July 31, 2009 8:05 PM | Report abuse

I love it.

Ezra takes down a principle-free libertarian (conservatives with bongs), and one of the first comments tells Ezra to read The Fountainhead.

Isn't is about time we all recognized that conservatives and libertarians have absolutely nothing to add to the healthcare debate? (Let alone much else these days.)

Posted by: jvill | August 1, 2009 11:15 AM | Report abuse

You should actually read The Fountainhead. If nothing else it could help you out with making logical arguments.¨

What is the difference between Rowley and Rand?

One writes unbelievable fantasy and the other writes stories about learning to be wizards and witches in England.


Posted by: dkmjr | August 1, 2009 11:19 AM | Report abuse

I love it.

Ezra takes down a principle-free libertarian (conservatives with bongs), and one of the first comments tells Ezra to read The Fountainhead.

Isn't is about time we all recognized that conservatives and libertarians have absolutely nothing to add to the healthcare debate? (Let alone much else these days.)

Posted by: jvill | August 1, 2009 11:15 AM | Report abuse


and radical liberals do? the true answer is the center. push one too far either way and its wrong, IMO.

The liberals have their own agenda and left up to their own devices they are as corrupt as those too far right. the idea is a balance of ideas. the past 8 years was too far right, now the pendulum is swinging too far the other way. What we need is a centerist leader and we won't get that the next 7.5 years I fear.

Posted by: visionbrkr | August 1, 2009 1:32 PM | Report abuse

quick edit to one sentence, ezra...."Fattening food is not only available, but cheap."

Posted by: rpopstar | August 1, 2009 3:56 PM | Report abuse

"appeals", not "appears".

Posted by: bluegrass1 | August 1, 2009 8:19 PM | Report abuse

"the true answer is the center. push one too far either way and its wrong, IMO."

A completely empty statement.

Conservatives and libertarians have nothing to add to the healthcare debate. The conservative position has failed; the libertarian one is a silly fantasy.

Posted by: pseudonymousinnc | August 2, 2009 6:09 AM | Report abuse

"the true answer is the center. push one too far either way and its wrong, IMO."

A completely empty statement.

Conservatives and libertarians have nothing to add to the healthcare debate. The conservative position has failed; the libertarian one is a silly fantasy.

Posted by: pseudonymousinnc | August 2, 2009 6:09 AM | Report abuse


i'm sorry who is going to PAY for you liberals that are acting like drunken sailors? Especially in these economic times.

A public option will never work in the US because it will force wages for doctors to be below those of other skilled professionals that isn't an issue in single payer models.

If you can make the same as an electrician (that works hard) as a doctor (when you factor in schooling) who will want to be a doctor? Yes a handful will "do the right thing" and be doctors, but many won't and that will lead to less doctors at a time when we're already dangerously short.


Typical limited view of liberals. You need to think more than one step ahead of your next answer.

Posted by: visionbrkr | August 2, 2009 8:31 AM | Report abuse

Someone is a dumb c-word but it isn't McCardle. It isn't that Ezra "doesn't believe" the innovation argument, he doesn't understand it.

But why would he? He is a 25-year-old UC-Santa Cruz alum who majored in political science. And it is especially cute that he attacks McCardle's libertarianism, considering his post only makes sense to the least-informed commies among us. Good luck selling this idiocy outside of the Banana Slug Republic.

Posted by: RezkoLot | August 2, 2009 10:39 AM | Report abuse

Mr. Klein argues that "Without Medicare, in fact, there would be a much smaller market for medical innovations, as a substantial portion of the elderly would not be able to afford heath-care insurance... National health insurance for the elderly, in other words, is one of the primary drivers of medical innovation."

Lack of other evidence aside (e.g., of innovations traceable to Medicare), it ignores entirely the large number of Medicare recipients who do have means and who would expend some part of those means on medical care whether or not Medicare paid for it. It also ignores the extent to which such a market would demand not merely better, but cheaper. Until I see a likelihood of "but cheaper" in these plans (tort reform, anyone?; funding for vast increases in number of primary care physicians, etc), I remain deeply skeptical of the health care snake oil.

Posted by: HowardM1 | August 2, 2009 1:23 PM | Report abuse

Ezra, thank you for pointing Wapo readers to the McArdle piece. For those readers who have not clicked over yet, if you, like me, regard apoplectic debate tactics as a red flag that an interlocutor is not addressing his adversary's arguments fairly, you would be right on in this case. Ms. McArdle's piece, in contrast to this one, is lucid, rational, and devoted to persuasion rather than dismissive insults. And if you do not find this one post completely convincing, you will find many more thoughtful pieces on her excellent blog.

Posted by: blackjeans | August 2, 2009 6:02 PM | Report abuse

The desire to innovate is strong; even Soviet State Capitalism couldn't squash the desire therefor of its scientists and engineers. As it stands, drugs companies stifle innovation by pointing their research toward look-alike drugs to further their rent-seeking (funny they should be against the government, given that their intellectual 'property' is created and guarantied thereby).

And we can never tell where an innovation may come from: look up the story of the imaginary number i==√(-1) and its insane usefulness later on....

Yes, government is never disinterested and totally devoted to the public good---but at least its S.O.P. is at least intended to be that, as opposed to a private company for whom N dollars of profit are as good as any other N dollars (even though they're supposedly chartered 'for the public good').

Posted by: poincare1 | August 3, 2009 6:13 PM | Report abuse

Thank you, Mr. Klein. This one piece trumps most of what is passing for news on this issue, even from our beloved Washington Post. Each time I look at the news, on the web or in print, I hope to see someone addressing in real terms the costs, benefits & risks of the various health care proposals. Instead there's so much coverage of the coverage, coverage of what MIGHT happen (supposition, not news), and coverage of what politicos & lobbyists are telling the Post. The information that the Lewin Group is wholly funded, or nearly so, by UnitedHealth is real news. Important news. Coverage of specific items in proposals is news. While there's much work to be done in Congress to get a final bill, a comparison of the baseline proposals offered by the WH, House & Senate would be real, and useful, news. Please, editors, can we get less editorializing and more analysis on this issue?

Posted by: DMWinDC | August 4, 2009 11:49 PM | Report abuse

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