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U.S. economists praise our medicare
Mar. 24, 2006. 01:00 AM
RICHARD GWYN
Since he's very much a "just folks" kind of guy, it's unlikely that Alberta Premier Ralph Klein ever reads the New York Review of Books.
Prime Minister Stephen Harper is much more of a brainiac. His interest is in economic and financial matters, though, rather than in that magazine's usual fare.
Too bad. Harper and Klein would find in this weekly magazine an article that says more than has been said in a long time about our medical care system. They then might realize that a "third way" reform of our system — really just Klein's code-word for a two-tier system — is the wrong way. The right way is — wait for it — exactly the medical care system that we've already got.
The New York Review of Books' article contains only glancing references to the Canadian system, even though all the comments about it made by co-authors Paul Krugman, Princeton University economist and columnist with The New York Times, and Robin Wells, also an economist, are decidedly flattering. Instead, and naturally enough, all their analysis is about the U.S.'s own system.
And that analysis is uniformly unfavourable. In 1960, they point out, the U.S. spent 5.2 per cent of its gross national product on health care. Today, this has soared to 16 per cent. Despite this vast spending, close to double Canada's, 40 million Americans have no medical coverage at all.
The source of this inefficiency is — again, wait for it — because the U.S. doesn't have a single-payer system. In other words, a Canadian-style system in which the government pays all the bills and covers its costs out of general tax revenues.
Instead — for a last time, wait for it — the U.S.'s problem is that it depends far too much on private insurance. This, as readers will remember, is what our Supreme Court ruled last year should be allowed in Canada to make things here better. As Krugman and Wells show, the problem with private medical insurance is that it is extraordinarily inefficient. And it is this way inescapably.
Anyone who has ever had to foot the bill for a minor traffic accident or for repairs after a home break-in rather than incur a horrendous increase in insurance premiums from making a claim, will understand this.
Our Supreme Court judges, who live rather rarefied lives, are apparently unaware of this reality.
In the United States, as Krugman and Wells write, private medical insurance, which, by law, employers must provide to their employees, is undergoing an "increasingly rapid unravelling."
Companies simply can't afford it any more. Thus Wal-Mart is considering classifying certain jobs as tasks that require physical exertion in order to screen out applicants with potential health risks. Huge companies, like General Motors, are being dragged toward bankruptcy by their health insurance and pension costs.
Private insurance lacks the economies of scale of public insurance. It's also plagued by the problem of what economists call "adverse selection." It's the unhealthy people who do all they can to seek out medical insurance.
The healthy often take the risk of not being insured at all, much as many in Canada don't bother with private dental insurance.
Lastly, amid today's high job volatility, individuals are only covered when they work for large companies.
Krugman's and Well's conclusion: What the U.S. needs is "standardized, universal coverage."
Interestingly, another American magazine, The New Republic, has just reached the same conclusion. It ends a long editorial: "Government is not the best way to provide all Americans with health security. It is the only way."
There are certainly some parts of our present system that do need to be fixed. But since the system itself works, why on earth are people trying to scrap it?>:
Mar. 24, 2006. 01:00 AM
RICHARD GWYN
Since he's very much a "just folks" kind of guy, it's unlikely that Alberta Premier Ralph Klein ever reads the New York Review of Books.
Prime Minister Stephen Harper is much more of a brainiac. His interest is in economic and financial matters, though, rather than in that magazine's usual fare.
Too bad. Harper and Klein would find in this weekly magazine an article that says more than has been said in a long time about our medical care system. They then might realize that a "third way" reform of our system — really just Klein's code-word for a two-tier system — is the wrong way. The right way is — wait for it — exactly the medical care system that we've already got.
The New York Review of Books' article contains only glancing references to the Canadian system, even though all the comments about it made by co-authors Paul Krugman, Princeton University economist and columnist with The New York Times, and Robin Wells, also an economist, are decidedly flattering. Instead, and naturally enough, all their analysis is about the U.S.'s own system.
And that analysis is uniformly unfavourable. In 1960, they point out, the U.S. spent 5.2 per cent of its gross national product on health care. Today, this has soared to 16 per cent. Despite this vast spending, close to double Canada's, 40 million Americans have no medical coverage at all.
The source of this inefficiency is — again, wait for it — because the U.S. doesn't have a single-payer system. In other words, a Canadian-style system in which the government pays all the bills and covers its costs out of general tax revenues.
Instead — for a last time, wait for it — the U.S.'s problem is that it depends far too much on private insurance. This, as readers will remember, is what our Supreme Court ruled last year should be allowed in Canada to make things here better. As Krugman and Wells show, the problem with private medical insurance is that it is extraordinarily inefficient. And it is this way inescapably.
Anyone who has ever had to foot the bill for a minor traffic accident or for repairs after a home break-in rather than incur a horrendous increase in insurance premiums from making a claim, will understand this.
Our Supreme Court judges, who live rather rarefied lives, are apparently unaware of this reality.
In the United States, as Krugman and Wells write, private medical insurance, which, by law, employers must provide to their employees, is undergoing an "increasingly rapid unravelling."
Companies simply can't afford it any more. Thus Wal-Mart is considering classifying certain jobs as tasks that require physical exertion in order to screen out applicants with potential health risks. Huge companies, like General Motors, are being dragged toward bankruptcy by their health insurance and pension costs.
Private insurance lacks the economies of scale of public insurance. It's also plagued by the problem of what economists call "adverse selection." It's the unhealthy people who do all they can to seek out medical insurance.
The healthy often take the risk of not being insured at all, much as many in Canada don't bother with private dental insurance.
Lastly, amid today's high job volatility, individuals are only covered when they work for large companies.
Krugman's and Well's conclusion: What the U.S. needs is "standardized, universal coverage."
Interestingly, another American magazine, The New Republic, has just reached the same conclusion. It ends a long editorial: "Government is not the best way to provide all Americans with health security. It is the only way."
There are certainly some parts of our present system that do need to be fixed. But since the system itself works, why on earth are people trying to scrap it?>: