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“Deep Thinker” David Brooks Fails to Tell The Truth About Health Care Costs

(By Bruce Schmiechen, cross-posted at The Titanic Sails At Dawn)
In a recent New York Times column titled – apparently without irony – “Where Wisdom Lives”,  David Brooks discussed health care systems and the future cost-effectiveness of Medicare, posing Democrats as believing in “top down centralized planning” while Republicans favor “the decentralized discovery system of the market.”
Brooks characterizes the Republican Ryancare alternative dishonestly because he doesn’t mention that, as Mark Bridger explained here at Winning Progressive last week, the CBO has projected costs – out-of-pocket and aggregate – as skyrocketing under the scheme to end Medicare in favor of capped vouchers:
Republicans point out that Medicare has tried to control costs centrally for decades with terrible results. They argue that a decentralized process of trial and error will work better, as long as the underlying incentives are right. They suggest replacing the fee-for-service with a premium support system. Seniors would select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.
Of course, Medicare as it stands is the most cost-effective piece of our health insurance puzzle.  It’s been more successful – as a “volume buyer” negotiating prices – at controlling costs “centrally” than the multiplicity of private insurers have been.  For example, as Winning Progressive noted in commenting on Brooks’ column:

* Medicare has lower overhead costs – approximately 5% for Medicare and 8.9% for private insurance. Once you factor profits, commissions, and premium taxes in, private insurance overhead goes up to 16.7%

* Medicare has controlled costs better than the private system. From 1970 to 2000, annual per enrollee costs went up 9.7% for Medicare and 11.1% for private insurance.

* Medicare Advantage plans, which are Medicare plans run by private insurers, cost the government 14% more than traditional government-provided Medicare

Based on Medicare’s current performance versus private insurers, the CBO has rated and projected the difference in future cost of privatized Ryancare over Medicare, and it doesn’t look good for Brook’s “consumer choices” system:
And that’s leaving aside any questions about the proposition that seniors – nearly all with pre-existing conditions, most with deep concerns about allocating out-of-pocket expenses within the limitations of a fixed and likely very modest income and inevitably facing increased physical and mental frailty as they age -  would be more interested in ongoing participation in a “continual bottom up process of innovation” rather than security and systemic integrity – the “known” over a “process of discovery.”
Then Brooks truly goes off the deep end with this allegation:

The fact is, there is no dispositive empirical proof about which method is best — the centralized technocratic one or the decentralized market-based one. Politicians wave studies, but they’re really just reflecting their overall worldviews. Democrats have much greater faith in centralized expertise. Republicans (at least the most honest among them) believe that the world is too complicated, knowledge is too imperfect. They have much greater faith in the decentralized discovery process of the market…

Moreover, if 15 Washington-based experts [Brooks is referring to the Indpendent Patient Advisory Board, established to rate effectiveness of treatements - ed] really can save a system as vast as Medicare through a process of top-down control, then this will be the only realm of human endeavor where that sort of engineering actually works.

James Kwak at Baseline Scenario nails the deep – albeit “brilliant” – dishonesty underlying these assertions:
Why is this brilliant? Most ordinary pundits (those without space on the Times op-ed page) use the more common device of citing studies on both sides to show that there is support for both sides. But this is rookie league stuff. Brooks shows how it’s really done: just dismiss the entire attempt at empirical support with a wave of the hand, which lets you get back to “philosophy.” It’s much easier to know nothing than to know something.
But for this question, we don’t even need to go to the academic studies. We already have a health care system where people “select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.” It’s called the individual market, there are tens of millions of people in it, and it’s a complete failure. It leaves tens of millions of people uninsured, and to those who are insured, it delivers mediocre care at high costs. The only way you can ignore this fact is by pretending that facts don’t matter…
Um, David, there’s this country to north of us. It’s called Canada. They have a national health insurance system that covers everybody. And that system . . . Whom am I kidding? When you don’t have respect for facts, a few more aren’t going to change your mind.
Writing from a different angle – relationship of health care costs as % of GDP to taxation – conservative economics commentator Bruce Bartlett at “Economix” offers overwhelming evidence that “wisdom” such as David Brooks’ is totally disconnected from empirical evidence, or what might be termed “reality”:

O.E.C.D. data show that Americans pay vastly more for health care than the residents of any other major country.

In 2008, we paid 16 percent of G.D.P. in total health care costs, public and private combined. The people with the next heaviest health care burden were the French, who paid 11.2 percent of G.D.P. Indeed, at 7.4 percent of G.D.P., the governmental share of health spending in the United States is about the same as total health care costs in many other countries, including (as a percentage of G.D.P.) Luxembourg (6.8 percent), Israel (7.8 percent), Japan (8.1 percent), Britain (8.4 percent) and Norway (8.5 percent).

In other words, if we had a health care system like those in most developed countries, we could, in effect, give every American an increase in their disposable income of 8 percent of G.D.P. – about what they pay in federal income taxes

Kwak’s column on Brooks ends with the rude but essential question:

I’m not expecting the Times to fire David Brooks anytime soon, but after his enormous, embarrassing gaffe with the Ryan Plan, can’t his editor at least get him to stop writing about Medicare?

As a featured New York Times columnist, David Brooks is one of a handful of conservatives who has a certain appeal for many liberals as “reasonable.” With stuff like this he wears out any welcome he might have had as an honest interlocutor.  Bruce Bartlett – who I quote regularly – and a very few others excepted, the search for an authentic conservative who can be relied upon to at least tell the truth rather than obfuscate seems to be a task best assigned to Diogenes the Cynic.

Who else has that kind of time on their hands for such a paltry result?

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This entry was posted on Monday, June 13th, 2011 at 4:43 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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