David Felix, economist
Bangor Daily News
Wednesday, August 1, 2007
John Goodman summarizes his critique of Michael Moore’s documentary on health care reform (“Sicko is no model for health care reform,” BDN, July 21), as follows: “So what are we to make of Moore and his Ć¢ā¬Ėdocumentary’? Economists, like other scientists, study reality in order to adapt to it. Artists, by contrast, selectively focus on some facts and ignore others in order to recreate reality.” Bad economics is thus Goodman’s basic charge against “Sicko.”
This charge prompted me, an economist, to see the documentary. My conclusion? Moore is far less guilty of flawed economics and disregard of relevant facts than is Goodman. Moore is also straightforward about his values and ideology, whereas Goodman masks his as scientific economics. This impels me to defend my profession by exposing the falsity of his claims, and some of the salient facts that he ignores.
Goodman rejects single payer universal coverage health systems, which Moore favors, because they require bureaucratic rationing of medical care, and impose longer waiting periods than do private market health systems. The rationing complaint as such is irrelevant; markets also ration, mostly by the purse. What they have been unable to do is provide universal coverage.
The incentive for private health insurance companies is to maximize profits by insuring low-risk clients and rejecting high risk ones. That incentive promotes /private /bureaucratic rationing of services and intensified screening of applicants. The U.S. public sector and private charities have thus been pressured to finance treatment of some sort for the rapidly rising millions of U.S. uninsured and underinsured. “Sicko” illustrates various aspects of the problem. Goodman gives it no mention whatsoever.
Waiting time is emphasized by Goodman, although he ignores some important dimensions of the waiting issue, and presents biased treatment of others.
Thus the socialized systems of Britain, Canada, Australia and New Zealand assign lower priorities and longer delays to elective (e.g., cosmetic) and non-emergency (e.g., hip replacement) surgery than to emergency (e.g., cardiac or cancer) surgery.
The U.S. has the shortest average waiting time for elective and non-emergency surgery, but is merely in the middle of the Anglo-Saxon group for emergency surgery. The same for delay in seeing a specialist.
Goodman combines the two priorities, lowering the overall U.S. waiting time to first place, which allows him to claim it indicates the extra risk of death that government rationing imposes in emergency cases.
He disregards that the U.S. is the most difficult of the Anglo-Saxon group in getting same-day doctor appointments; shares with Canada the most difficulty in getting treatment on nights and weekends; and that France, Germany, Japan and the Scandinavians have still shorter delays than the Anglo-Saxon group in almost all dimensions of waiting. Implication? Bureaucratic rationing is unavoidable in universal coverage government health programs, but longer waits are not.
Goodman’s data manipulation and his assumption that longer waits have deadly consequences imply that the U.S. should have longer life expectancy and a lower rate of infant mortality than the industrial countries with socialized medicine.
But he doesn’t test that implication, enabling him to ignore that the U.S. has the lowest life expectancy and highest infant mortality rate of the industrialized democracies. Instead, he puzzles over why national health insurance seems so popular in these countries, concluding it’s because their citizenry, unaware that they pay by taxes, think they’re getting something for nothing.
And so to another of Goodman’s major omissions. The overall cost of health, taxes and all, is far higher in the U.S. than in any of the countries with universal coverage socialized health systems. U.S. overall spending on health is pushing 16 percent of its GDP and rising, as are its millions of uninsured. The overall health spending of the countries with socialized health insurance averages around 10 percent of GDP, with none reaching 12 percent, and all providing universal coverage. We pay the most to cover the least.
Can we cover more while paying less? Kenneth Thorpe, perhaps the top U.S. health economist, was recently commissioned by a broad coalition of 90 corporations, unions and advocacy groups to answer the question statistically. His report estimates the annual cost of moving to universal coverage at $75 billion in constant U.S. dollars, but this could be more than offset by reducing administrative costs to the Canadian level, acquiring pharmaceuticals at Canadian prices, and by earlier detection and treatment of patients now priced out of the current health system.
The annual savings in 10 years would reach $125 billion, with the current health system preserved, up to $182 billion if transformed to a single payer insurance system. These numbers estimate what economists call deadweight losses, inefficient uses of resources that reduce national welfare. “Sicko” illustrates such losses in the U.S. system; Goodman ignores them.
Which brings us to the moral issue. The major religions advocate egalitarian distribution of social welfare theologically, whereas libertarian ideology prioritizes free markets and individual choice. Each can become enmeshed by policy conflicts between theology and economic reality.
Health reform is an exception. Moore has the easier advocacy task: his single-payer reform is supported by both “scientific” economics and widely held religious principles.
Goodman must show that socializing health insurance, even if it lowers economic costs while improving health, is morally bad. His critique avoids that question, other than hinting at a slippery slope argument. My conclusion: Moore wins over Goodman on economics and morality.
David Felix of Orono is professor emeritus of economics at Washington University in St. Louis.