Daily Archives: November 8, 2007

An expensive illusion

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Arnold%20Kling%20110707.jpgAs I’ve noted several times previously, EconLog’s Arnold Kling is among the clearest thinkers in the U.S. on reform of the health care finance system. He has been addressing health care finance issues again this week, first in this podcast interview with Russ Roberts, and also in posts here and here addressing issues raised by Greg Mankiw’s NY Times article on the misleading nature of certain statistics that are frequently tossed around in the health care finance debates. But the most insightful Kling health care finance post this week was this Cato-at-Liberty post in which he analogizes the third party payor health care finance system to subsidized prostitution:

Suppose we were 20-year-old guys who hung out together, and one of our friends was down on his luck with women. Heís really depressed about it. We decideñnot necessarily the brightest ideañto hire him a prostitute. We donít want him to know sheís a prostitute, so we all chip in and pay her, tell her to meet our friend at a bar, and make him feel better about himself.
Next morning, we ask him how it went. He says, ìGreat. I really feel better about myself. In fact, Iím going to see her again tonight.î
As friends of the guy, we look at each other and realize that he will be devastated if he learns the truth. So we chip in again and pay the prostitute to make our friend feel better about himself. This keeps happening day after day, and eventually maintaining our friendís illusion about his love life gets to be really expensive.
Similarly, free health care is an attractive illusion. Itís just gotten to be really expensive to maintain the illusion.

Before the blogosphere, discussion and analysis of health care finance — which has become one of the key domestic issues of our time — was largely buried in technical books, economic or medical journals and an occasional op-ed on the editorial pages. As a result, health care finance was largely misunderstood by the public and even a large segment of the medical profession. Now, through the leadership of economic bloggers such as Kling, the important issues relating to health care finance reform are instantly available for the world to review as a virtual cornucopia of economic bloggers has emerged to provide commentary and insight. That’s a wonderful legacy for Kling, and one for which we should all be appreciative.

The DeBakey-Cooley rapprochement

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DeBakey%20and%20Cooley.jpgThe longtime feud and resulting intense competition between Houston cardiovascular surgeons Michael DeBakey and Denton Cooley was a part of what catapulted Houston’s Texas Medical Center into the upper tier of the world’s great medical centers over the past 40 years.
Now, the Chronicle’s fine Texas Medical Center reporter, Todd Ackerman, reports in this article that the DeBakey-Cooley rift is no more:

It’s considered one of medicine’s best-known feuds: two brilliant and egotistical doctors on the frontiers of cardiovascular surgery, whose falling-out divided a community and became the stuff of legend.
Immortalized in a Life magazine cover story, the rift persisted for decades. Although the competition spurred them to achievements that transformed the Texas Medical Center into the world’s heart treatment center, the former collaborators avoided each other and barely spoke.
But recently, Michael DeBakey and Denton Cooley buried the hatchet.
“I’m glad the rivalry may have passed by,” Cooley said on Oct. 27, presenting DeBakey with a lifetime achievement award at a meeting of Cooley’s Cardiovascular Surgical Society. “I hope this is not just a temporary truce or cease-fire (but) … a permanent treaty between us.”
DeBakey, 99, responded that he was glad to be there for two reasons: “One is, I’m alive. And the other, of course, is to get this award. Denton, I am really touched by it.”

Read the entire article.

What’s really wrong with Ahman Green

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Ahman%20Green.jpgLeading Texans cheerleader, Chronicle pro football columnist John McClain, reports on the baffling nature of the injury that is holding back the Texans’ high-priced running back, Ahman Green:

Meanwhile, the Texans asked running back Ahman Green, 30, to have his sore right knee examined by [Dr. James] Andrews to see if he can find something that might help him stay on the field.
“We’re trying to find out what’s really going on, why it’s swelling and giving me pain and discomfort,” Green said after practice Tuesday. “I’ve had three MRIs, and they still don’t know from that, so I’m going to fly over there and see what we can find out.” [. . .]
“I’m hoping we’ll finally know,” Green said. “I hope we can find a solution for this. We’ll have our finger on the dot to see exactly what it is. Once we find the problem, we’ll have a solution.
“I know what I bring to this team, and my teammates depend on me a lot. And when I’m injured, I can’t do the things I know I can do.”

In reality, the acquisition of Green was a mistake — and a very expensive one at that — from the beginning. Moreover, that it was a mistake should not have been a surprise to anyone. As noted in my annual preview of the Texans’ season:

An example of the dubious decision-making regarding offensive personnel is the signing of RB Ahman Green, formerly of Green Bay. Green was a great running back in his prime with the Pack, but he has averaged less than four yards per carry for the past two seasons. Inasmuch as the Texans agreed to pay Green $23 million over four years ($8 million guaranteed in the first season), the chances that the 30-year old Green will be worth the value of this contract this season are tenuous, at best. The chances of him still being worth the contract a couple of years from now are so speculative as to be off the charts.

In short, you won’t read about it in McClain’s columns, but Green represents another indication that the hiring of current Texans coach Gary Kubiak has not changed the legacy of dubious personnel decisions over at Reliant Park.
Ahman Green = eventual salary cap hit.