Coyote Blog

First, I will say that I am perfectly happy for folks who are either good earners or good savers or both and who choose to use their accumulated wealth to stop working at some age.

However, I am completely lost as to how we have somehow decided that multi-decade end-of-life paid vacations, starting as early as age 50, is somehow an inalienable right that must be guaranteed by government.  I suppose I can see a safety net for folks who, though age and disability, simply get too old to be productive (but remember that I have nearly 500 people mostly over 65 who work for me, mostly doing manual trades, so don't tell me older people can't be productive).  And that was what Social Security initially was -- the age 65 was chosen as a retirement age not because it guaranteed 10-15 years of senior leisure but because it matched the life expectancy at the time.  The equivalent age would be well into the 70's today.

Of course, others think differently.  A group is now proposing an expanded Social Security program that would guarantee nearly 100% of earnings to low-income retirees (there are smaller increases for higher income workers but most all the change is for low-income folks).

While they are proposing higher taxes to support this, my guess is that it will not be long before a wealth tax is suggested.  After all, they are hoping to replace 401K's as a savings vehicle.  If so, why not seize those funds to help pay for the plan.  The other day, Kevin Drum mocked those who fear a government seizure of 401K's as the tinfoil hat brigade.  I would be willing to bet him that within the decade, it will become a mainstream idea in the progressive community to fund shortfalls in Social Security and Medicare with a full or partial seizure of 401K's.

Via Cafe Hayek, Paul Krugman says:

And surely the fact that the United States is the only major advanced nation without some form of universal health care is at least part of the reason life expectancy is much lower in America than in Canada or Western Europe.

If I were a cynical person, I might think that the tortured and overly coy syntax of this statement is due to the fact that Krugman knows very well that the causation he is implying here is simply not the case.  Rather than rehash this age-old issue here on Coyote Blog, let's roll tape from a post a few years ago:

Supporters of government medicine often quote a statistic that shows life expectancy in the US lower than most European nations with government-run health systems.  But what they never mention is that this ranking is mainly due to lifestyle and social factors that have nothing to do with health care.  Removing just two factors - death from accidents (mainly car crashes) and murders - vaults the US to the top of the list.  Here, via Carpe Diem, are the raw and corrected numbers:

And so I will fire back and say, "And surely the fact that the United States is the only major advanced nation without some form of universal health care is at least part of the reason life expectancy related to health care outcomes is so much higher in America than in Canada or Western Europe.

And check out the other chart in that post from that study:

US cancer survival rates dwarf, yes dwarf those of other western nations.    Even black males in the US, who one would suppose to be the victims of our rapacious health care system, have higher cancer survival rates than the average in most western nations (black American women seem to have uniquely poor cancer survival rates, I am not sure why.  Early detection issues?)

All this data came originally from a post at Carpe Diem, which I refer you to for source links and methodologies.

Over the last 50 years, real per capital health care spending has increased substantially.   Certainly there are multiple reasons for this, but the most obvious one is seldom ever mentioned -- that the US has seen huge increases in personal wealth over this period, and unsurprisingly people choose to spend a lot of this extra wealth on their own health and life expectancy.  In an age where consumerism is often derided as shallow and trivial, what could be more sensible than spending money on more and better life?

Many have pointed to the increased technological intensity of health care to explain rising costs.  I suppose this could be true, though in almost every other industry in modern times, increased technological intensity has reduced rather than increased costs.

One issue that does not get enough attention is the prosaic act of shopping.   I spend my own money, and I care about price.  I spend someone else's money, I don't give a rip.  Josh Cothran did a visualization of who is spending health care money.  Just look at the 1960 and 2012 charts, and pay particular attention to the orange "out-of-pocket" number.  Another way to rewrite these charts is to say consumers care about prices for spending in the orange band only.

Update:  Health care cost inflation.  Note cosmetic surgery, a field with significant increases in technological intensity over the last few decades, but for which almost all costs are out-of-pocket

source

The most frequent justification I see from the Left for increasing government involvement and control of the health care system is that the US spends more per capita on health care than any other country but apparently gets little extra benefit from the spending in terms of health outcomes**.

Intriguingly, the exact same statement can be made of the American education system, which is already nearly fully nationalized.  We spend more per capita than any other country and get only middling results.  I wonder why those who use high spending with modest results as a justification for rethinking the health care system do not come to the same conclusion for the public education system?

To some extent, the US spends more on education and health care because we think are critical and because we are wealthier.  We spend on items way down the Pareto chart where we get less bang for the buck because we can.   And to my mind, it's no coincidence that both health care and education are dominated by third part expenditures.  Take the price value decision making out of the ultimate consumers hands, and, well, the whole price-value equation is bound to get screwed up.

** There are several reasons US often looks bad in these health comparisons.  The first is that we have a lot of life-shortening habits (eating, smoking, driving, crime) completely out of control of the health care industry.  So our lifespans are shorter, but control for those exogenous factors and our health care system looks among the best.  Check out this data, which shows that correcting for crime and accidents, US has the highest life expectancy in the world.

The other problem is the data is often cherry-picked by academics sympathetic to the state health care model.  As seen in the link above, we have the highest cancer survival rates in the world, and the highest life expectancy for people who reach 65.   Even our supposed out-groups, such as black males, have higher cancer survival rates in the US than the average in most European countries.  But you seldom see these metrics included in comparisons.

I also refer you to an oldie but goodie, showing how a study failed to correct for differences in lifestyles between countries.

Via Watts Up With That:

In another example of vital statistics being grossly distorted by a combination of poor record keeping and possibly people with a selfish agenda, it is being reported in the Guardian and elsewhere that possibly hundreds of thousands of people over age 100 in Japan are actually dead, but unreported. Investigations are now underway to determine how much of this problem is due to record keeping problems and how much to family members failing to report the deaths of their elderly relatives in order to continue to collect their pension benefits by fraudulent means.

There are more than 77,000 Japanese citizens reported to be over age 120, and even 884 persons AGED OVER 150 YEARS OF AGE, who are still alive according to government rolls.

While we in the US wouldn't bat an eye if we heard this story coming out of the Chicago area of Cook County, Illinois, given the number of dead people still actively voting in elections there, there are at least 230,000 people in Japan over age 100 who simply cannot be located by any means. This large centenarian population is largely responsible for the very high average life expectancy in Japan (currently listed by the World Bank as 82.6 years, more than four years greater than the US average of 78.4 years (this is including dead voters in Chicago)), as well as any senior citizens under 100 who are actually dead but have not been reported as such on government records.

Yes, the Europeans pay less per person for health care.  Is the care as good?

Well, when life-expectancies are adjusted for things that are not amenable to the health care system (like murder rates), Americans have the highest life expectancy in the world, and by far the highest cancer survival rates.

The prices we pay for drugs and medical devices, while high, effectively subsidize the entire world's medical R&D.

Oh yes, and we don't have to wait 6 months to get treated.  The wait time issue is often poo-poo'd by elites in the political debate, but it seems to be an important issue for real people:

In a survey, people were asked how they felt about various forms of medical care for a urinary tract infection or for influenza. While people preferred traditional, office-based care, they would opt to see a nurse-practitioner at a retail clinic if they could save at least $31.42. They would wait one day or more for an appointment if they would save at least $82.12.

The researchers concluded that the appointment wait period is the most important determining factors in an individual's choice on where to seek care for minor health problems such as influenza. Primary-care doctors who fear their business will be undercut by the growing popularity of retail health clinics may want to offer more same-day appointments and walk-in hours."
...

"This study is the first in the United States to quantify the relative importance of and the utility associated with the main attributes of retail clinics. The utility (willingness to pay) associated with receiving same-day care is more than twice the utility associated with receiving care from a physician. Primary care physician practices, especially in competitive markets, are therefore likely to derive greater competitive advantage by addressing patient convenience features (such as same-day scheduling, walk-in hours, and extended hours) than by reducing fees."

Follow the link for more and a link to the original study.  Patient convenience is the LAST thing government health care systems design for, but apparently, what actual people most want.

I say over and over, yes, we could reduce the cost of medical care (but by increasing the accountability of individuals for paying for their own care, exactly the opposite direction taken by the Obama plan).  But a big reason that we pay more is not because we are stupid and incompetent, but because we can because we are wealthier.  It is incontrovertible that we are wealthier per capital than the Europeans -- is it surprising that we would choose to spend a large portion of this extra wealth on our health?

I stole this post title from Ayn Rand, but it seems appropriate to this story by James Delingpole.  Apparently James Hansen, leader of NASA's GISS, which does most of its climate research, wants to turn back the clock on industrialized civilization.    A new book by Keith Farnish writes:

The only way to prevent global ecological collapse and thus ensure the survival of humanity is to rid the world of Industrial Civilization.

And continues:

I'm rarely afraid of stating the truth, but some truths are far harder to give than others; one of them is that people will die in huge numbers when civilization collapses. Step outside of civilization and you stand a pretty good chance of surviving the inevitable; stay inside and when the crash happens there may be nothing at all you can do to save yourself. The speed and intensity of the crash will depend an awful lot on the number of people who are caught up in it: greater numbers of people have more structural needs "“ such as food production, power generation and healthcare "“ which need to be provided by the collapsing civilization; greater numbers of people create more social tension and more opportunity for extremism and violence; greater numbers of people create more sewage, more waste, more bodies "“ all of which cause further illness and death.

I wonder what Mr. Farnish thinks the average life expectancy was before the industrial revolution, or even "civilization?"  But my intention here is not to shoot fish in Mr. Farnish's barrel.  What is interesting is who approached Farnish and offered, unsolicited, to blurb his book:  James Hansen.  Here is Hansen's endorsement:

Keith Farnish has it right: time has practically run out, and the 'system' is the problem. Governments are under the thumb of fossil fuel special interests "“ they will not look after our and the planet's well-being until we force them to do so, and that is going to require enormous effort.

Does anyone believe that a person who believes this wouldn't misrepresent the science or fudge his temperature metrics to support his cause.  If he expects civilization to crash, why do we expect him to operate by the rules of civilized society?

Sure, we all know that a series of carefully edited anecdotes on film constitute better evidence than comprehensive data and statistics, but Mark Perry soldiers on and does what he can anyway to rebut Michael Moore's new movie.  He has lots of good charts, but his summary is:

the evidence clearly demonstrates that along with capitalism and greater economic freedoms come: a) higher per-capita incomes, b) higher incomes for the poorest 10%, c) greater life expectancy, d) less corruption, e) cleaner environments, and f) greater political rights and civil liberties. Not a bad record for a system that Michael Moore portrays as evil, and says did "nothing for him."

I am always amazed at these attempts to portray countries like Cuba as superior to the US for the common man.  One only has to look at immigration patterns (and even better some measure of desired immigration intent, since our ridiculously restrictive immigration laws keep so many people out of this country) to see the common man's preferences.   Moore and his pears are like a man who looks at a river running from north to south and then arguing that the land in the south must be higher.

Just as an aside, there have probably been thousands of states in world history.   Of all those thousands of states and regimes from history, including the hundreds that exist today, there are probably only 15-20 that would have  social, economic, and political systems that would allow a man born to modest circumstances to make a fortune through criticism of the government and the social elite.

From Andrew Coulson.  Math and reading scores probably underestimate changes in learning (e.g. doesn't account for increased need to teach computer skills in this timeframe).  But discourse on education often seems to assume the blue line is flat to down.    It is interesting that among the left, this chart is proof that we need to spend more money while the exact same chart in health care (say with scores replaced by life expectancy) is proof we need to spend less money.  In fact, the health care chart would look better, because at least there the key metric of quality has increased over time.

Update: Here are the life expectancy stats, showing much more progress than education (despite being suppressed by an increasing murder rate in the period -- to really make it a metric of health care you need to pull out accidents and homicides).  So both health care and education spending go up a lot.  Education results show no improvement.  Health care results show strong improvement.  But education needs more money and health care less?  You'd almost think people's opinions on this were based more on feeding government run institutions and starving private ones, irregardless of results.

Kevin Drum shows this chart as evidence we need government health care like the rest of the "civilized" world:

I write back in the comments:

I wonder if the graph you show is a bug or a feature.  My guess is that you could draw the same chart in the same shape with the US on the far left for consumption of items as diverse as "big screen TVs" and "pro sports tickets."  We would chalk up spending in any other area as simply a result of wealth.  Why not on health care?  Why is it so bad that we spend more money on something like health care which is arguably less frivolous and more critical than TV's or baseball games?

I would understand it if the argument was that we are not getting our money's worth, but that meme is just about dead.  The evidence is pretty clear that though life expectancy in the US is lower than some of these other countries, this is due to issues unrelated to health care (specifically murders and auto accidents).  When the cause of death is limited to things amenable to the health care system, the US ranks #1 in the world in life expectancy.  This is not even to mention the customer experience in accessing the health care system, which for all its irritations, is still ranked the best in the world.  We pay the most, and get the best results, because we can afford the best.

It makes me nervous that you think this is a problem.

PS- I certainly think there are efficiencies that could be wrung out from the health care system if people actually shopped with their own money for their own health care, as they do for every other product and service they buy.  This is proved out in the falling prices for non-insurance covered health procedures, such as laser eye surgery.  But it is a laugh to think the government will wring these savings out.  The government has never, ever, ever made a process more efficient.  All it can do to cut costs is a) institute price controls on suppliers, which eventually lead to shortages and reduced R&D and/or b)  Eliminate services.

Update: OMG, we need government take over of the automotive sector, because we spend more money on cars than any other country, and by the left's logic that is a sign of failure of the status quo.

Via Steve Chapman at Reason:

[President Obama] says though the United States spends more per person on medical care than any other nation, "the quality of our care is often lower, and we aren't any healthier. In fact, citizens in some countries that spend substantially less than we do are actually living longer than we do."

That's one of the favorite rationales for a government-led overhaul. But it gives about as realistic a picture of American medicine as an episode of Scrubs.

It's true that the United States spends more on health care than anyone else, and it's true that we rank below a lot of other advanced countries in life expectancy. The juxtaposition of the two facts, however, doesn't prove we are wasting our money or doing the wrong things.

It only proves that lots of things affect mortality besides medical treatment. Heath Ledger didn't die at age 28 because the American health care system failed him.

One big reason our life expectancy lags is that Americans have an unusual tendency to perish in homicides or accidents. We are 12 times more likely than the Japanese to be murdered and nearly twice as likely to be killed in auto wrecks.

In their 2006 book, The Business of Health, economists Robert L. Ohsfeldt and John E. Schneider set out to determine where the U.S. would rank in life span among developed nations if homicides and accidents are factored out. Their answer? First place.

That discovery indicates our health care system is doing a poor job of preventing shootouts and drunk driving but a good job of healing the sick. All those universal-care systems in Canada and Europe may sound like Health Heaven, but they fall short of our model when it comes to combating life-threatening diseases.

Supporters of government medicine often quote a statistic that shows life expectancy in the US lower than most European nations with government-run health systems.  But what they never mention is that this ranking is mainly due to lifestyle and social factors that have nothing to do with health care.  Removing just two factors - death from accidents (mainly car crashes) and murders - vaults the US to the top of the list.  Here, via Carpe Diem, are the raw and corrected numbers:

The Mark Perry post linked above has links in turn to the study itself and its methodology.  You may have seen stats that say that, using raw data, the US has the best life expectancy once you reach age 65.  This is just another way of correcting out higher accident and murder rates, as these tend to affect younger folks.

My guess is that if one corrected for other lifestyle issues and environmental factors that increase the incidence rates of things like heart disease in the US (discussion here), then the US lead would be even more stark.  If one takes the left at its word that the US starts in a health care "hole" with poor diet, obesity, environmental problems, etc., then the US medical care system, despite starting in a hole, is able to still raise US life expectancies above other countries.

One big reason is cancer survival rates, which dwarf those in Europe.  It is at such leading and expensive edges of medicine where one might expect the US system to get much better results, and it does.

But it is often said that this is only for the rich -- that the poor in the US don't benefit.  Well, this is a difficult proposition to test, as income mobility (which is very real in this country no matter how much the left denies it) makes correlation of income (say by quartile) and life expectancy impossible.  During a person's lifetime, they might inhabit several different quartiles.

A proxy I think the left might accept is one  of race.  If one assumes that African-Americans are among the systematically disenfranchised in the health care system, then it should show up in their stats.  The results are something that gives ammunition to both sides of the debate.

Clearly, there are two tiers, as African Americans have poorer cancer survival rates than white Americans.  But, for many types of cancer, African-Americans have higher survival rates than they would in many European countries.

This is the endless do-loop of inequality debates.  Is inequality OK if it results the folks lower on the totem pole being better off than in a more egalitarian society.  For me, the answer seems obvious.  Absolute well-being seems far more meaningful than relative well-being.  But I am not necessarily in the strong majority on this.  I had a professor that used to poll his class -- he would ask them if they would prefer a society where the gap between rich and poor was narrower but where the poor were, on an absolute basis, worse off than in the less equal society.  He reported the vote almost always split about 50/50.  (of course the is a purely utilitarian formulation of the question.  Adding in individual liberties issues makes the question far more stark, as to achieve an egalitarian society one must give up both wealth and liberty.)

New study results, via Tyler Cowen:

We estimate the effect of extreme weather on life expectancy in the US. ... However, the
increase in mortality following extreme heat appears entirely driven by
temporal displacement, while the increase in mortality following
extreme cold is long lasting. The aggregate effect of cold on mortality
is quantitatively large. We estimate that the number of annual deaths
attributable to cold temperature is 27,940 or 1.3% of total deaths in
the US. This effect is even larger in low income areas. Because the
U.S. population has been moving from cold Northeastern states to the
warmer Southwestern states, our findings have implications for
understanding the causes of long-term increases in life expectancy. We
calculate that every year, 5,400 deaths are delayed by changes in
exposure to cold temperature induced by mobility. These longevity gains
associated with long term trends in geographical mobility account for
8%-15% of the total gains in life expectancy experienced by the US
population over the past 30 years. Thus mobility is an important but
previously overlooked determinant of increased longevity in the United
States. We also find that the probability of moving to a state that has
fewer days of extreme cold is higher for the age groups that are
predicted to benefit more in terms of lower mortality compared to the
age groups that are predicted to benefit less.

Your welcome, America. 

Prior to the election, folks on the left were pushing the idea that US wages had been stagnating.  Often this argument was a subset of a zero-sum class warfare rant, complaining that though the economy has grown, the "rich" have taken all the gains.

There were always two problems with the hypothesis that real wages were stagnating:

1. "Wages" are only a part of total compensation.  In fact, I don't think anyone denies that real compensation (wages plus benefits) has been growing, and it would not surprise me that non-wage compensation, like health care, has grown much faster than wages.  A discussion about only one component of total compensation is nearly irrelevant.
2. Even if the average is stagnating, that does not mean that the wages for individuals is stagnating.  What is actually going on is that everyone's real wages are improving, but new low-skill low-wage immigrants and teenagers move in behind them and bring the average down.  If you showed real wages for people who were in the work force in 1980 without any entrants after that, average wages would be way up.  The average is less important, from a general well-being standpoint, than what is happening to individuals.

The New York Sun (Hat tip: Most all the libertarian blogosphere) that also takes on these issues.  The author makes the further distinction between individual and family income, and argues you also need to correct for changing family sizes.

The American family has
shrunk due to changes in society, such as more divorces, longer
life-expectancy for women, and fewer children. So family income in 2004
cannot correctly be compared to family income in 1964 "” today's family
income is spread around fewer people.

Adjusting for decreasing family size, real median family income is
13% higher than in 1994, 22% higher than in 1984, 37% higher than in
1974, and 88% higher than in 1964. That's a significant increase.

I am constantly frustrated with the media's inability to reality check the numbers they publish.  In many cases, just a few seconds thought would tell them that the numbers make no sense.

Today's example actually comes from a "meth-is-death" web site which is run by the Tennessee state attorneys-general association and is linked prominently from the Federal Government's anti-drug web site  (Hat tip to Reason).  Here are their numbers, copied right from the site:

• 1 in 7 high school students will try meth.
• 99 percent of first-time meth users are hooked after just the first try.
• Only 5 percent of meth addicts are able to kick it and stay away.
• From the first hit to the last breath, the life expectancy of a habitual
  meth user is only 5 years.

So 14.3% (1 in 7) try meth, 99% of those who try are hooked, and 95% of those hooked stay hooked, and all of those hooked die in five years.  So .143 x .99 x .95  or 13.45% of all kids are dying on average by the age of 23.  Wow.  There must be a really huge conspiracy out there to cover up all these deaths. Given that there are about 17,000,000 high school age kids, that means that in the next 5 years or so nearly 2.3 million of them are going to die.   And adults who run anti-drug programs wonder why kids don't take their warnings seriously.