On Efficiency

Arnold Kling of the Cato Institute, who has given President Bush’s alleged health care plan an “A+,” criticizes my criticisms.

I argued that the method of capping the deductibility of employer-based health coverage seemed like a lousy method of paying for tax credits for the uninsured (which are themselves a poor way to get people insured). In addition to setting up a system pushing group coverage to individual coverage, which is a recipe for disaster, it makes less sense than trying to pay for the tax credits through efficiencies.

Kling dissents, arguing that “paying for something with efficiencies is nothing but a scoundrel’s refuge for policymakers. It’s like saying you’re going to balance the budget by getting rid of waste, fraud, and abuse. Of all the criticisms one could make of the Bush health plan, this is the least persuasive.”

Kling is right: such an argument usually is a scoundrel’s refuge for policymakers, which is why the Republican Party, which has made this argument for more than a quarter of a century, is itself a refuge for scoundrels.

But if there is any place where the efficiency argument can be made, it is in the US health care system. Consider this table. What does it show? The United States pays far more per capita and gets far less in health outcomes than comparable western nations. And it’s not close: France has more doctors, more nurses, more hospital beds, higher life expectancy, and lower infant mortality–and all for less than half the cost per capita of the American system. The same is true with Canada and the UK, with the exception of per capita physicians. It’s easier to find inefficiencies in US health care than efficiencies. Paul Krugman has explained all of this, and it would be interesting to see why conservatives think that he’s wrong, instead of taking stupidity to high art form and making ad hominem attacks against him.

Of course, one important way to increase efficiency in the system, and perhaps save money would be to get serious about health care fraud. But somehow I don’t think Bush wants to go there. Among Bush Pioneers, the health care industry is well-represented.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.