Lane Kenworthy What’s the best type of healthcare system? [feedly]

Excellent and detailed comparison of various rich country universal health coverage systems.

What's the best type of healthcare system?
https://lanekenworthy.net/2019/11/21/whats-the-best-type-of-healthcare-system/

If we're going to improve our healthcare system, it's worth looking closely at the experiences of other rich democratic countries. There are two principal types. They're sometimes referred to as the Beveridge model and the Bismarck model. I'll label them "single payer" and "insurance funds."¹

Single payer systems

In this type of system, the government pays providers (from tax revenues), decides prices, decides what procedures are covered, decides copayments, and more. It also runs some or most of the hospitals and employs some or most of the medical providers. The best-known example of this type of system is the United Kingdom's National Health Service (NHS).

Health care is paid for via taxes. Britons don't pay health insurance premiums. There are no copayments for diagnosis and treatment, whether for a visit to the doctor or specialized surgery. There is a small copayment for medicines, but it is waived for the elderly, people with chronic conditions, and other needy groups.

A government agency draws on available research to decide what treatments and medications are sufficiently effective and affordable to justify coverage. Some basic things, like eyeglasses and some types of dental care, aren't covered. Patients must see their general practitioner first and get a referral in order to see a specialist, much like with HMOs in the United States. Patients can see any general practitioner of their choosing, and once they get a referral they can choose which specialist to see next.

How is cost control achieved? The key is that a single agency decides what tests, procedures, and medicines will be covered and how much providers will be paid. In addition, administrative costs are very low because there are no disputes about eligibility, there is a single set of rules, and there is a single price list.

General practitioners are paid based on the number of patients they have ("capitation"), not the number of patient visits or the number of tests and procedures they perform or the number of referrals they make to specialist doctors. Most general practitioners in the UK aren't government employees. Formally, they are self-employed doctors who contract with the government. But this is a distinction that makes little difference, as what they can do and how much they can charge are determined by the NHS. Doctors can provide private medical care on the side, charging what they like. But the private market is utilized by a small minority of Britons; 90% use only the NHS for their health care.

Britons pay for health care via their taxes and some small copayments. And if they want to avoid waiting to see a specialist or for a "nonessential" procedure, or if they'd like to get a procedure that isn't covered by the NHS, they pay out of pocket.

Among the world's rich longstanding-democratic nations, Australia, Canada, Ireland, New Zealand, Italy, Portugal, Spain, Denmark, Finland, Norway, Sweden, and South Korea have healthcare systems that are broadly similar to the British one. The United States does too; about 40% of Americans get their health care via Medicare (elderly), Medicaid (low income), the Veterans Administration (former military), or the Military Health System (current military). So this is the type of system favored by the English-speaking nations, the southern European countries, the Nordic countries, and most recently South Korea.

There are differences among these countries — whether or not medical providers are formally government employees, what tests and procedures are covered (two out of three nonelderly Canadians have private insurance to supplement the government package), whether patients must see a primary-care physician first or can go straight to a specialist, how much choice patients have about doctors and hospitals, the existence and size of copayments and deductibles, whether the key decisions are made mostly by a central government agency (UK) or by local governments (Canada, Denmark, Italy, Sweden), whether private health insurance can cover the same procedures as the public system (in Canada and Italy it can't), and more. But the basic structure is the same: government decides what tests, procedures, and medicines are covered, how much providers are paid, and where the money comes from (taxes, copayments, something else).

In this type of system, these matters are political decisions. If citizens aren't satisfied with their access to medical care, with its quality, with waiting times, or with the amount of taxes they're paying to fund it, they can lobby the government to make changes or vote in a new government that will do so.

Insurance funds systems

Austria, Belgium, France, Germany, Japan, Netherlands, and Switzerland — the affluent continental European nations plus Japan — organize healthcare differently. Health insurers, usually referred to as insurance funds, are the principal payers. Citizens pick an insurance fund and pay a fee, often supplemented by a payment from their employer. The insurance fund determines what tests, procedures, and medications will be covered. Hospitals and doctors are mostly nonprofit or private; relatively few are administered or employed by the government.

In this respect, things work similarly to the way they do for a majority of working-age Americans who get health insurance through an employer-sponsored plan and get treated by nonprofit or private physicians and hospitals. But there the similarity ends. First, everyone is covered. Individuals typically are required to purchase health insurance through an insurance fund, and those who don't or can't are either assigned to a fund or are covered by the government. The insurance funds must accept all applicants; they can't refuse coverage on grounds of age, risk, preexisting conditions, or for any other reason. Second, there is a basic plan that all insurers must offer at a fixed price. Typically they also can offer better plans, which cover more services or allow more choice among doctors or shorter waits, at a higher price. Third, prices are tightly controlled. Sometimes, as in France and Japan, government sets the prices in consultation with representatives of hospitals and doctors. In other countries, such as Germany and the Netherlands, prices are determined, for the nation as a whole, via bargaining between representatives of the insurance funds and representatives of medical providers. If those negotiations break down, government steps in to impose a resolution. Fourth, insurance funds can't be for-profit. (They do compete with one another, though.)

There are differences across these countries. The number of funds varies: France has about 15, Germany 120, Japan 3,400. People can choose to join whatever insurance fund they like in most of these nations, but in France they must go with the one set up for their line or work or the region where they live, and they stay with that fund for life, even if they move across the country or lose their job. Japanese must go with their employer's fund. In some nations people can switch between funds on short notice (Germany, Switzerland), whereas in others switching can only be done once a year (Netherlands). In some countries patients can go to whatever doctor or hospital they like (France, Japan), while in others they must first see a primary-care physician. Copayments and deductibles vary. In some of these countries, lots of people purchase supplementary private insurance to cover things the insurance plan doesn't (90% of the working-aged in France, 84% of the population in the Netherlands). In Germany, but not in most other countries, the affluent (about 7% of the population) are allowed to opt out of this system and purchase private insurance on their own.

Using employer payments as a major source of financing for health care seems outdated. In a society where people switch jobs frequently, it makes little sense for insurance against a potentially major and very costly risk to be tied to one's employer. Moreover, providing health insurance is expensive for firms, putting them at a disadvantage relative to foreign competitors. And it likely acts as a brake on wage increases. Nevertheless, employer-based health insurance seems to work reasonably well in these insurance funds countries. An important reason why is that if people quit or lose their job, they are automatically kept with their existing insurance fund or switched into a government health insurance plan. And the cost of health care is contained, so it's less of a burden for employers.

Which type of system works better?

Figure 1 shows average life expectancy since 1980 in the twelve rich democratic countries that have a single-payer system and the seven countries that have an insurance fund system.² There is no meaningful difference between them.

Figure 1. Life expectancy by type of healthcare system 
Years of life expectancy at birth. The vertical axis doesn't begin at zero. The "single payer" countries are Australia, Canada, Denmark, Finland, Ireland, Italy, New Zealand, Norway, Portugal, Spain, Sweden, and the United Kingdom. The "insurance funds" countries are Austria, Belgium, France, Germany, Japan, Netherlands, and Switzerland. Data source: OECD.

Life expectancy is influenced not only by a nation's healthcare system but also by lifestyle, diet, education, affluence, violence, and more. A measure that more directly gets at the impact of the healthcare system on longevity is "avoidable deaths," defined as deaths among persons aged 0 to 74 from diseases or conditions that are treatable or that could have been prevented through better public health interventions. Comparable data are available only for European nations and only for recent years. This includes nine countries with a single-payer system (Denmark, Finland, Ireland, Italy, Norway, Portugal, Spain, Sweden, and the United Kingdom) and six countries with an insurance-funds system (Austria, Belgium, France, Germany, the Netherlands, and Switzerland). As we see in figure 2, the avoidable death rate is virtually identical across the two system types.

Figure 2. Avoidable death rate by type of healthcare system 
Per 100,000 persons aged 0 to 74. Deaths from diseases or conditions that are treatable ("treatable" deaths) plus deaths that could have been prevented through better public health interventions ("preventable" deaths). The vertical axis doesn't begin at zero. The "single payer" countries are Denmark, Finland, Ireland, Italy, Norway, Portugal, Spain, Sweden, and the United Kingdom. The "insurance funds" countries are Austria, Belgium, France, Germany, Netherlands, and Switzerland. Data source: Eurostat, "Preventable and Treatable Mortality Statistics."

Figure 3 shows health expenditures as a share of GDP. Here we see a slight advantage for single-payer countries, and that advantage increases a bit over time. It may be that this is due to greater efficiency — for instance, lower administrative costs or less waste. Then again, it could be a result of political choices to cover fewer procedures or medications, which might result in longer wait times or less use of medical care. We lack data that would permit the sort of detailed comparison we need in order to reach a confident conclusion about the sources of this difference in health expenditures.

Figure 3. Health expenditures by type of healthcare system 
Share of GDP. Total (public plus private) expenditures. The "single payer" countries are Australia, Canada, Denmark, Finland, Ireland, Italy, New Zealand, Norway, Portugal, Spain, Sweden, and the United Kingdom. The "insurance funds" countries are Austria, Belgium, France, Germany, Japan, Netherlands, and Switzerland. Data source: OECD.

In 2013 and 2016, the Commonwealth Fund conducted thorough assessments of the healthcare systems of eleven of these countries. They included six countries with a single-payer system (Australia, Canada, New Zealand, Norway, Sweden, and the United Kingdom) and four with an insurance-funds system (France, Germany, the Netherlands, and Switzerland), along with the United States. They scored each nation in five areas — care process (preventive care, safe care, coordinated care, and engagement and patient preferences), access (affordability and timeliness), administrative efficiency, equity, and healthcare outcomes — and they used these scores to determine an overall ranking.

Figure 4 shows the countries' ranking in each year along with the averages for the two groups. In 2013 the average rank for countries with a single-payer system was exactly the same as the average for countries with an insurance-funds system. In 2016 the average ranking was better for single-payer countries than for insurance-fund countries. But the difference was small — small enough that it easily could disappear if more nations from each group were included. It might also be a product of error; while these assessments are careful and thorough, that doesn't mean they are perfectly accurate.

Figure 4. Healthcare system performance rank by type of healthcare system 
The rankings are for 2013 and 2016. Data sources: Karen Davis, Kristof Stremikis, David Squires, and Cathy Schoen, "Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally," Commonwealth Fund, 2014, exhibit 2; Eric C. Schneider, Dana O. Sarnak, David Squires, Arnav Shah, and Michelle M. Doty, "Mirror, Mirror 2017: International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care," Commonwealth Fund, 2017, exhibit 2.

Given what we observe in the data, I see little, if any, basis for concluding that one of the two types of healthcare system works better than the other.

Transitioning

For the United States, transitioning to an insurance funds system would seem, at first glance, to be easier, because we could build on our existing employer-based provision of health insurance. But it would be no small matter. Insurers would need to shift from for-profit to nonprofit. Government would need to create a policy whereby the noninsured are assigned to an insurer or covered by a government program. Government would need to ensure that there is a basic plan that everyone can get. Prices paid to providers could be decided by negotiations between insurers, doctors, and hospitals, but government would need to be willing to step in and impose a decision if such negotiations fail to yield an agreement.

A transition to an American single-payer system could be done in one fell swoop, by expanding either Medicare or Medicaid to the entire population. Or it could be done gradually: lower the age at which Americans can get Medicare, raise the income limit for Medicaid eligibility, and add a Medicare-like program ("public option") that individuals and families can purchase on health insurance exchanges and that firms can purchase for their employees. Or simply allow any employer or individual to buy into Medicaid or Medicare, with subsidies for those who need them. Eventually, much of the population would be covered by these public programs. This would achieve universal coverage, and the government, as the dominant payer, would be in a strong position to control healthcare costs.³

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1. The following draws heavily from T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, Fairer Health Care,Penguin, 2009; Elias Mossialos, Ana Djordjevic, Robin Osborn, and Dana Sarnak, eds., International Profiles of Health Care Systems,Commonwealth Fund, 2017. ↩
2. South Korea isn't included in the comparison here because it switched from one type of healthcare system to the other in 2000. ↩
3. Jacob S. Hacker, "Stronger Policy, Stronger Politics," The American Prospect, 2016; Hacker, "The Road to Medicare for Everyone," The American Prospect, 2018; Dylan Matthews, "Donald Trump Promised 'Insurance for Everybody'. Here's How He Can Do It," Vox, 2016; Sarah Kliff and Ezra Klein, "The Lessons of Obamacare," Vox, 2017; Paul Starr, "The Next Progressive Health Agenda," The American Prospect, 2017; Starr, "A New Strategy for Health Care," The American Prospect, 2018; Michael S. Sparer, "Buying into Medicaid: A Viable Path for Universal Coverage," The American Prospect, 2018. ↩

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The Organization of American States Has Deceived the Public, Terribly, on the Bolivian Election [feedly]

The Organization of American States Has Deceived the Public, Terribly, on the Bolivian Election
http://cepr.net/publications/op-eds-columns/the-organization-of-american-states-has-deceived-the-public-terribly-on-the-bolivian-election

Mark Weisbrot
MarketWatch, November 19, 2019

See article on original site

What is the difference between an outright lie — stating something as a fact while knowing that it is false — and a deliberate material representation that accomplishes the same end? Here is an example that really pushes the boundary between the two, to the point where the distinction practically vanishes. And the consequences are quite serious; this misrepresentation (or lie) has already played a major role in a military coup in Bolivia last Sunday. This military coup overthrew the government of President Evo Morales before his current term was finished — a term to which nobody disputes that he was democratically elected in 2014. More violent repression and even a civil war could follow.

The Organization of American States (OAS) sent an Electoral Observation Mission to Bolivia, entrusted with monitoring the October 20 national election there. The day after the election, before all the votes were even counted, the mission put out a press release announcing its "deep concern and surprise at the drastic and hard-to-explain change in the trend of the preliminary results…"

Here is what the OAS was referring to: there is an unofficial "quick count" of the voting results that involves contractors who upload results at intervals, as the tally sheets are available. At 7:40 pm on election day, they had reported about 84 percent of the votes and then stopped reporting for 23 hours (more on that below). When they resumed reporting results at 95 percent of votes counted, Morales's lead had increased from 7.9 percent before the interruption to just over 10 percent.

This margin was important because in order to win without a second-round runoff, a candidate needs either an absolute majority, or at least 40 percent plus a 10 point margin over the second place finisher. This margin — which grew to 10.6 percent when all the votes were counted in the official count — reelected Morales without a second round.

Now, if you had any experience with elections or maybe even arithmetic, what is the first thing you would want to know about the votes that came in after the interruption? You might ask, were people in those areas any different from people in the average precinct in the first 84 percent? And was the change in Morales's margin sudden, or was it a gradual trend that continued as more vote tally sheets were reported? You might even want to ask these questions before expressing "deep concern and surprise" about what happened, especially in a politically very polarized situation that was already turning violent.

A look at that data shows that  the change in Morales's lead was actually gradual and continuous, and started rising many hours before the break in reporting of the quick count. You can see that in a graph of the results. Why did it happen? The answer is simple and not that uncommon: the people in later-reporting areas were more pro-MAS (Morales's party, the Movement Toward Socialism) than those in areas that reported earlier. Hence the gradual and continuous rise in Morales's lead, in which the votes after the interruption put him over the top.

The OAS has published two press releases, one preliminary report, and one preliminary audit on the election. How many of these contained the disparagement of the election results implied by the "deep concern and surprise" quoted above? Three. How many contained anything about the difference between the percentage of MAS/Morales voters in areas with later returns versus earlier? Zero.

As it turns out, the interruption in the quick count was not a sign of foul play either. The quick count is separate from the official count, and has no legal status to determine the results. It's never been intended or promised to be a complete count; in prior elections it did not even near 84 percent. It's just a quick series of snapshots, done by contractors, to provide early results before the official count is done. It makes sense that the electoral authorities might not want two sets of voting results, which are inherently different, coming out at the same time in a violently polarized political situation.

For those who like numbers better than graphs: Morales's margin in the first 84 percent of votes was 7.9 percent, as noted. If we look at the remaining 16 percent of precincts, and we ask, what is Morales's pre-interruption margin in the areas where these later-reporting precincts were located? That margin is about 22 percent. Again, a simple explanation of how his margin increased as it did with later returns.

For a more powerful statistical analysis, we can project the remaining (and thus total) vote count on the basis of the first 84 percent reported. And — no surprise here — Morales's projected final margin based on the first 84 percent of votes turns out to be slightly more than 10 percent.

It is difficult, almost impossible, to believe that this OAS mission, or those above them in the OAS Department of Electoral Cooperation and Observation, felt "deep concern and surprise" and yet were too incompetent to even look at this data. That is why I would say that they lied at least three times: in the first press release, the preliminary report, and the preliminary audit. And that is why I would regard with great skepticism the allegations presented in their preliminary audit, and further publications — unless these can be verified by independent investigators from publicly available data.

And the OAS isn't all that independent at the moment, with the Trump administration actively promoting this military coup, and Washington having more right-wing allies in the OAS than they did just a few years ago. Not to mention that the US supplies 60 percent of its budget. But the OAS has horribly abused its mandate in election monitoring before, helping to reverse election results as the US and its allies wanted: most destructively, in 2000 in Haiti; and also in the same country in 2011.

More evidence: in the last three weeks, the OAS has refused to answer questions from journalists, on the record, about their statements or reports since the election. Maybe they are afraid that a curious reporter would ask questions like these: Is there a difference between the political preferences of people who live in later-reporting areas as compared to earlier ones? Doesn't this explain how Morales's lead rose to more than 10 percent as votes from more pro-Morales areas came in? Did you even look at this question?

Since I am an economist, I believe in incentives: I am offering a $500 reward for the first journalist who can get a substantive answer to these questions from an OAS official, on the record. Even if turns out to be a lie.

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Mark Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C. He is also the author of "Failed: What the 'Experts' Got Wrong About the Global Economy" (2015, Oxford University Press). You can subscribe to his columns here.

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Latina workers have to work nearly 11 months into 2019 to be paid the same as white non-Hispanic men in 2018 [feedly]

Latina workers have to work nearly 11 months into 2019 to be paid the same as white non-Hispanic men in 2018
https://www.epi.org/blog/latina-pay-gap-2019/

November 20 is Latina Equal Pay Day, the day that marks how long into 2019 a Latina would have to work in order to be paid the same wages her white male counterpart was paid last year. That's nearly 11 months longer, meaning that Latina workers had to work all of 2018 and then this far—to November 20!—into 2019 to get paid the same as white non-Hispanic men did in 2018. Put another way, a Latina would have to be in the workforce for 57 years to earn what a non-Hispanic white man would earn after 30 years in the workforce. Unfortunately, Hispanic women are subject to a double pay gap—an ethnic pay gap and a gender pay gap. And, this pay gap widened over previous year when it "only" took until November 1 for Hispanic women catch up to non-Hispanic men.

The date November 20 is based on the finding that Hispanic women workers are paid 53 cents on the white non-Hispanic male dollar, using the 2017 March Current Population Survey for median annual earnings for full-time, year-round workers. We get similar results when we look at average hourly wages for all workers (not just full-time workers) using the monthly Current Population Survey Outgoing Rotation Group for 2018—which show Hispanic women workers being paid 56 cents on the white male dollar.

This gap narrows—but not dramatically—when we control for education, years of experience, and location by regression-adjusting the differences between workers. Using this method, we find that, on average, Latina workers are paid only 66 cents on the dollar relative to white non-Hispanic men.

The wage gap between Latina workers and white non-Hispanic male workers persists across the wage distribution, within occupations, and among those with the same amount of education. Figure A shows average wages for Hispanic women and white non-Hispanic men at different levels of educational attainment. At every level of education, white non-Hispanic men are paid more than Hispanic women. What's also clear from the data is that further education does not close their sizable wage gaps with white non-Hispanic men. As Hispanic women increase their educational attainment, their pay gap with white men generally increases. The largest dollar gap (more than $18 an hour), occurs for workers with more than a college degree. Even Hispanic women with an advanced degree earn less than white men who only have a bachelor's degree. That statistic bears repeating: white non-Hispanic men with only a college degree are paid, on average, $6.81 more than Latinas with an advanced degree!

Figure A

Much of these differences are grounded in the presence of occupational segregation. Latina workers are far more likely to be found in certain low-wage professions than white men are (and less common in high-wage professions). But, even in professions with more Latina workers, they still are paid less on average than their white male colleagues. Figure B shows the average wages of Hispanic women and white non-Hispanic men in the 10 most common occupations for Latinas. In every one of them, white men, on average, are paid more than their Latina counterparts.

Figure B

Since Hispanic women continue to be over-represented in low-wage jobs, policies that lift wages at the bottom will have a significant impact on their wages. An increase of the federal minimum wage to $15 by 2025 would affect nearly one in three Latina workers.

While some (incorrectly) argue that Latinas are choosing lower-paid professions, further education isn't a panacea, as shown in Figure A. Regardless of their level of educational attainment or their occupation, Latinas are paid less than their white male counterparts. Additional EPI research on the Hispanic-white wage gap includes analysis of immigrant status and country of origin. Looking at only full-time workers in a regression framework, Marie T. Mora and Alberto Dávila find that Latina workers are paid 67 percent on the white non-Hispanic male dollar (a 33 percent pay penalty). Accounting for immigrant status, the pay penalty improves slightly to 30 percent and is wider among first generation immigrants (39 percent) than second (29 percent) or third or higher generation (31 percent).

No matter how you slice the data, it is clear that there is a lot of work to be done to improve the standard of living for Latinas and their families. More educational attainment and access to better quality education would certainly help to improve the Latinas' chances to move up the job ladder and get better paid jobs. However, this is not the whole story, since even after controlling for education, the wage gap remains very large. Offering and facilitating access to occupations that are higher paid will also move Latinas up the occupational ladder. Here too, however, we find that even within the same occupations, Latinas fare worse. Lastly, it is important to strengthen workplace protections, like equal pay for equal work provisions, so that those women who do have the same education, the same occupation and are equally qualified in the workplace are not paid less or driven away from moving up to these higher paid positions

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Krugman: Doing the Health Care Two-Step [feedly]

  PK endorses Warren 2 stage on health care. Reason given: voters who are happy with private health care can't be lost in battle to beat Rs. I think Bernie and M4A has a workable response to that -- enrolling labor into a central representative role guiding the transition to m4a could be a means of doing labor law reform and health care reform together. But I have not heard him articulate that. He is staying on message at the macro level. Lets see how that holds up. Plus, and alternate billionaire faction directly entering the race is going to change the conversation. PK is always smart.

Doing the Health Care Two-Step

Paul Krugman

https://www.nytimes.com/2019/11/18/opinion/medicare-for-all.html

text only:

Recent state elections — the Democratic landslide in Virginia, followed by Democratic gubernatorial victories in Kentucky and Louisiana — have been bad news for Donald Trump.

Among other things, the election results vindicate polls indicating that Trump is historically unpopular. All of these races were in part referendums on Trump, who put a lot of effort into backing his preferred candidates. And in each case voters gave him a clear thumbs down.

Beyond offering a verdict on Trump, however, I'd argue that the state elections offered some guidance on an issue that has divided Democrats, namely health care. What the results suggested to me was the virtue of medium-size reform: incremental enough to have a good chance of being enacted, big enough to provide tangible benefits that voters don't want taken away.

Remember, there was a third governor's race, in Mississippi, in which the G.O.P. held on. True, Mississippi is a very red state, which Trump won by 18 points in 2016. But Louisiana and Kentucky are or were, if anything, even redder, with Trump margins of 20 and 30 points respectively. So what made the difference?



Personalities surely mattered. Louisiana's re-elected John Bel Edwards was widely liked, Kentucky's defeated Matt Bevin widely disliked. Demography probably also mattered. Urban and especially suburban voters have turned hard against Trump, but rural voters haven't, at least so far — and Mississippi is one of the few states left with a majority-rural population.

But there's another difference among the three states. Kentucky and Louisiana took advantage of the Affordable Care Act to expand Medicaid, leading to steep drops in the number of uninsured residents; Mississippi hasn't. This meant that voting Democratic in Kentucky and Louisiana meant voting to preserve past policy success, while the same vote in Mississippi was at best about hope for future reform — a much less powerful motivator.



Back in 2010, as Obamacare was about to squeak through Congress, Nancy Pelosi famously declared, "We have to pass the bill so that you can find out what is in it." This line was willfully misrepresented by Republicans (and some reporters who should have known better) as an admission that there was something underhanded about the way the legislation was enacted. What she meant, however, was that voters wouldn't fully appreciate the A.C.A. until they experienced its benefits in real life.

It took years to get there, but in the end Pelosi was proved right, as health care became a winning issue for Democrats. In the 2018 midterms and in subsequent state elections, voters punished politicians whom they suspected of wanting to undermine key achievements like protection for pre-existing conditions and, yes, Medicaid expansion.

And this political reality has arguably set the stage for further action. At this point, as far as I can tell, all of the contenders for the Democratic presidential nomination are calling for a significant expansion of the government's role in health care, although they differ about how far and how fast to go.



Which brings me to the latest development in intra-Democratic policy disputes: Elizabeth Warren's proposal for a two-step approach to health reform. Her idea is to start with actions — some requiring no legislation at all, others requiring only a simple Senate majority — that would greatly expand health insurance coverage. These actions would, if successful, deliver tangible benefits to millions.

They would not, however, amount to the full Bernie, eliminating private insurance and going full single-payer. Warren still says that this is her eventual intention, and has laid out a plan to pay for such a system. But any legislative push would wait three years, giving time for voters to see the benefits of the initial changes.

Sanders supporters are, predictably, crying betrayal. For them it's all or nothing: a commitment to single-payer has to be in the legislation from Day 1.

The trouble with such demands, aside from the strong probability that proposing elimination of private insurance would be a liability in the general election, is that such legislation would almost certainly fail to pass even a Democratic Senate. So all or nothing would, in practice, mean nothing.

But is Warren giving up on Medicare for All? After all, what she's offering isn't really a transition plan in the usual sense, since there's no guarantee that Step 2 would ever happen.

The lesson I take from the politics of Obamacare, however, is that successful health reform, even if incomplete, creates the preconditions for further reform. What looks impossible now might look very different once tens of millions of additional people have actual experience with expanded Medicare, and can compare it with private insurance.

Although I've long argued against making Medicare for All a purity test, there is a good case for eventually going single-payer. But the only way that's going to happen is via something like Warren's approach: initial reforms that deliver concrete benefits, and maybe provide a steppingstone to something even bigger.

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Adam Smith: From Human Nature to Human Society [feedly]

Adam Smith: From Human Nature to Human Society
https://www.bradford-delong.com/2019/11/adam-smith-from-human-nature-to-human-society.html

From Human Nature to Human Society: Hence the key importance of the human cultural invention of money in forming our large-scale human society: money means that any one of us can make a short-term one-shot exchange relationship with any other one of us, someone who we may well never see again. Money, you see, is manufactured trust, and it allows us to extend our societal division of labor to encompass, indirectly, nearly everybody else in the world.

For example, consider the 30-foot bronze statue of Athene Promakhos—Athena Fighting-in-Front—that the council and people of Athens had cast and installed on the Acropolis around -450. The Greek geographer Pausanias wrote that anyone approaching Athens by sea by day could see her gleaming helmet and the tip of her spear as soon as they had rounded Sounion Head at the southern tip of Attika. 70 tons of bronze supposedly went into the statue, which survived until 1204—63 tons of copper, 7 tons of tin. Copper was abundant. But where in the -5th century were the artisans of Athens to find 7 tons of tin? The historian Herodotos states that he could find nobody in Athens who knew where the tin was coming from: all anyone could say was that the ships had picked up the tin, already mined, in Sicily, and that they thought it came from "tin islands" in the ocean on the other side of Europe. But he could find nobody who would claim to have actually seen these tin islands, or this ocean on the other side of Europe. So he doubted the stories.

The answer, of course, was that the tin was in Cornwall, at the southwestern tip of the island of Britain. The societal division of labor, as governed by the market, was a mechanism that "knew" that 7 tons of tin needed to be mined in Cornwall and then shipped, probably via the English Channel-Seine-portage-Rhone-Mediterranean route, to Athens via Sicily. And so it happened. But, apparently, nobody anywhere in the value chain knew its entire extent. The market knew things that no human individual knew. And this was almost 2.5 millennia ago: the market knows much, much, much more now.

Language, weak dominance, gift exchange, and money have enabled us to progress from perhaps 10,000 of us 70,000 years ago living at a global average living standard of perhaps three 3.5 dollars a day to today's world-girdling societal division of labor now 7.5 billion strong, with a global average standard of living no about $35 a day. We are now, collectively, on average, at least 10 times as well-off and 750,000 times as numerous as we were 70,000 years ago back in the environment of evolutionary adaptation when we last passed through a Darwinian bottleneck

 -- via my feedly newsfeed

Should We Have Billionaires? [feedly]

Dean Baker on Billionaires: there's sloganeering. Then there's economics.

Should We Have Billionaires?
http://cepr.net/publications/op-eds-columns/should-we-have-billionaires

Dean Baker
Truthout, November 18, 2019

See article on original site

The Democratic presidential campaign has taken a strange twist in recent days, with candidates being asked whether we should have billionaires. While there may be some grand philosophical questions at stake here, I will stick to more mundane economic ones. The real question is: How do you want the economy to work?

The basic story is that if we have a market economy, some people can get very rich. If we buy the right-wing story, the superrich got their money from their great contribution to society. If we look at it with clearer eyes, the superrich got their money because we structured the economy in a way that allowed them to get super rich.

In some cases, that can mean that they had important innovations that made large numbers of people better off. While many of us have complaints about how Steve Jobs ran Apple (e.g., exploitative labor practices in China and anti-poaching agreements with competitors for workers in the U.S.), he did produce products that people really wanted to buy. People really like iPhones, so in that sense, Jobs did contribute to making society better off.

By contrast, it is very hard to see the contributions that many of the superrich have made to improve society. The largest share of the superrich are in finance. Some of these wealthy financial types specialize in buying or selling stocks or commodities a short time ahead of the market, thereby pocketing large profits.

It's pretty hard to see the contribution to society in this story. Their actions mean, for example, that GE's stock price may adjust to new information about its profits five or 10 minutes earlier than might otherwise have been the case. The benefit to the economy from this faster adjustment is essentially zero. These high rollers' profits come at the expense of ordinary traders who are less informed.

Michael Bloomberg — who ranks among the top 10 billionaires, with more than $50 billion — had the genius to provide these traders with servers that give them necessary information faster than anyone else. If society is better off from this innovation, it is hard to see how.

Other financial industry billionaires got their money through private equity funds, whose main advantage seems to be carrying through activities that publicly traded companies would be too embarrassed to do. Their latest cash cow is surprise medical billing, where a variety of businesses owned by private equity funds interject themselves into the medical process and hand patients huge bills.

Beyond finance, we find many billionaires in the tech sector. These are people who would have considerably less money with shorter and weaker patent and copyright enforcement. Some, like Bill Gates, would have much less money if antitrust laws were still enforced. Mark Zuckerberg would have much less money if Facebook were subject to the same libel laws as print and broadcast media.

The Walton family of the Walmart empire collectively has close to $200 billion in assets. They would have considerably less if minimum-wage laws had kept pace with productivity growth, and the Federal Reserve had done a better job of keeping the economy close to full employment so that workers had more bargaining power.

We can go down the list and find major policy failings that allowed many, if not most, of these billionaires to make their billions. While these billionaires may all have been smart and hard working, what allowed them to get such vast fortunes was a failure of public policy to organize the market efficiently. (This is essentially the point of my book, Rigged.)

While it is easy to identify many of the failures that have allowed for extreme wealth, there is still the question of whether a Steve Jobs-type may still get incredibly rich in a context where we have structured the economy efficiently. In my view, it is certainly a possibility and not one that we need to spend a lot of time worrying about.

There is no doubt that we want progressive taxation, but this does have its limits. A very high tax rate is an invitation to avoidance and evasion. If we have a 90 percent marginal tax rate, we are effectively paying rich people 90 cents to hide a dollar of income; or, to make the numbers more realistic, we are paying them $90 million to hide $100 million of income.

That is virtually guaranteed to get us a huge tax avoidance industry. That is a complete waste from an economic standpoint. Also, insofar as the rich succeed (and they will often succeed, in spite of our super-sleuth IRS agents), it undermines respect for the income tax more generally. There is a limit to how high we should make our tax rates.

There is the argument that the rich are able to use their wealth to buy political power. This is a real concern, but it is unlikely to be addressed by various progressive taxes. Even people with hundreds of millions can use their wealth to exercise inordinate political power.

Rather than focusing on trying to prevent the superrich from influencing public opinion (the issue goes way beyond campaign contributions — it is also owning media outlets, think tanks and funding university programs), a more practical focus would be to ensure that the rest of us can have a voice. This would mean some sort of individual tax credit (e.g., $200 per person) to be used to support the newspaper, think tank, or whatever form of expression, intellectual or political work the person wants.

That won't guarantee that there will be enough money to support whatever venture some of us might like, but it will ensure that the non-rich collectively have plenty of money to support progressive politics. Our energies are likely to be better spent ensuring that the non-rich have an effective voice than playing a whack-a-mole game to limit the voice of the superrich.

Long and short, I have no opinion on whether there should be billionaires. My opinion is that we have more important things to worry about.

 -- via my feedly newsfeed

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