My late father had extensive experience in providing and administering medical care in the Veterans Administration system, which he used to characterize as a good example of an unnecessary governmental program that perpetuated itself because of the vested interests of those who administer and profit from the system. “It’s a reasonably competent system for dispensing penicillen,” he once observed to me. “But you wouldn’t want to have gall bladder surgery over there.”
Thus, imagine my surprise a few weeks ago when NY Times columnist Paul Krugman, in his generally informative series on America’s broken health care finance system, authored this Times Select ($) column in which he touts the VA system as a model for a single-payor, government-administered health care finance system in the US:
American health care is desperately in need of reform. But what form should change take? Are there any useful examples we can turn to for guidance?
Well, I know about a health care system that has been highly successful in containing costs, yet provides excellent care. And the story of this system’s success provides a helpful corrective to anti-government ideology. For the government doesn’t just pay the bills in this system — it runs the hospitals and clinics.
No, I’m not talking about some faraway country. The system in question is our very own Veterans Health Administration, whose success story is one of the best-kept secrets in the American policy debate.
Krugman goes on to extol the virtues of the VA’s integrated system, which includes the government’s superior ability to “bargain hard with medical suppliers, and pay far less for drugs than most private insurers.”
Clear Thinkers favorite Peter Gordon sums up what my father’s opinion of Krugman’s analysis almost certainly would be:
This is very cool. I imagine that nearly everything could be obtained cheaply if only the federal government were put in charge to “bargain hard.”
Silly me. I fear that the government is an expensive middleman. I fear that it is a highly politicized middleman. And I fear that with enough hard bargaining, suppliers will leave the industry — as many have ever since Medicare and Medicaid began to “bargain hard.”
Think of the many readers of the NY Times op-ed page, many predisposed to this silliness, who get their public policy economics from Krugman.
Ah, the Free Lunch; the most perfect bait ever devised by Man (alas; the most perfectly flawed, also). “The Gods of the copybook headings, with terror and slaughter return”;thanks, Mr. Kipling.
Hi Tom,
The VA system is the product of a multi-payer system for the uninsured. It is a point of last access for those veterans and their families without insured-access elsewhere. It exists because the private sector refuses to make health care provision for veterans of this country’s armed forces.
As well, the VA system is a training ground for about 1/4 of the physicians trained in this country. Typically, they’re located in every major medical center in the U.S. and recent reports from patients indicate the service is excellent. To my knowledge, it is the only health care system with two Nobel Laureates.
Returning to Krugman’s speculation as to the VA being the “answer”. I know of no informed person who advocates a government provided health service. Single payer? Yes. A government provided health system? No.
The failure of the multi-payer system in this country manifests itself in several areas. The first is the 15% of GDP spent in the sector in comparison with the other G-7 countries. For that 15%, we still have 45 million uninsured. As well, 15-30% of the national expenditures for health care fall to administration of these multiple plans.
For the trillions spent, we rank lower in some WHO categories, such as infant mortality, than several undeveloped countries and our life expectancies only slightly better.
Why won’t a single payer plan be adopted in this country? Who’s willing to take the cut? Physicians? Hospitals? Pharmaceutical manufactures? Tort attorneys?
I dont think anyone in specific should have to take the cut, but rather everyone should. In otherwords it can come from an increased tax rate, but would you want it coming out of your pocket?