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Friday, November 30, 2007
Today's Krugman Column Needs Work
Paul Krugman's column today was a little off-base, I think. He basically calls out Sen. Barack Obama for not including a mandate in his universal health care plan, which he thinks will make insurance much cheaper.
I think his claims are overblown. The best estimate I've seen puts health care cost overruns at $480 billion. About $100 billion was due to inefficiencies in the insurance system on its own, and administrative expenses and profits make up the bulk of those unnecessary expenses. And I haven't seen anything on how being uninsured significantly raises costs in the delivery system.
Inadequate risk-pooling seems less a source of waste than just a more equitable way to finance health care. It could bring down costs for some people, but the main reason health care is so expensive for everyone isn't that we don't have universal health insurance, per se- it's that health care purchases aren't being effectively managed. The fact of the matter is that no candidate for president I'm aware of has accepted this and proposed to address it head on.
Krugman cited CBO director Peter Orszag's work on health care in an excellent recent column about Social Security. Orszag has been on the warpath describing what's really going on in the health care system, as best people know. Krugman should read Orszag's work more carefully.
Posted by Matt Lewis
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