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Home Publications Blogs Beat the Press David Brooks Pushes His Protectionist Line on Health Care Again

David Brooks Pushes His Protectionist Line on Health Care Again

Tuesday, 08 January 2013 10:35

David Brooks is very upset about the possibility that the cost of Medicare will prevent the United States from being as large a military force in the world in the future as it has been in the past. He tells readers:

"Medicare spending is set to nearly double over the next decade. This is the crucial element driving all federal spending over the next few decades and pushing federal debt to about 250 percent of G.D.P. in 30 years. ...

"So far, defense budgets have not been squeezed by the Medicare vice. But that is about to change. Oswald Spengler didn’t get much right, but he was certainly correct when he told European leaders that they could either be global military powers or pay for their welfare states, but they couldn’t do both."

Of course fans of arithmetic everywhere know that the basis for these projections is the assumption that per person health care costs, which are already more than twice the average for other wealthy countries, will increase to three or four times the cost in other countries. This means that our health care system will become ever more dysfunctional.

While that is of course possible, the problem is not the American people getting what they want, as Brooks asserts, it is the health care industry using its political power to extort incredible sums from the rest of us. If our health care costs were in line with costs in other countries, we would be looking at budget surpluses, not deficits.

In principle we should be able to reform our health care system to get its costs in line with those in other countries. However Brooks never even considers this possibility. (Actually, health care costs in recent years have come in way below projections, suggesting that we may already be on a slower growth path.) Alternatively, if our political system is too corrupt to allow reform we could allow Medicare beneficiaries to buy into the more efficient health care systems in other countries and split the savings with the government. However, Brooks is not interested in this option either.

Brooks would rather see people denied care under the argument that it is necessary to preserve the country's military standing in the world. In reality, we should make sure that we are not wasting trillions of dollars paying more than necessary for our health care. We should also decide what sort of military involvement we want the United States to have in the world. It may not be desirable to be intervening widely and fighting wars on different continents even if we can in fact afford the cost.

Comments (14)Add Comment
written by pete, January 08, 2013 11:00
Yes, AMA/SEIU keep our health care professionals nicely paid. In cohoots with the insurers. Essentially, this is covered by the economics of regulated industries. When a firm is told that it can have a certain rate of return, then it is free to increase its costs, since the regulators will allow a rate of return on those. That's where we have gotten and Obama care institutionalizes this. As the researchers come up with new drugs or procedures, they are allowed by insurers since they get to mark them up like 25%. I.e., the insurer keeps 20% of premiums, so, something that costs $80 will be reflected to the patients as $100 in premium, with $20 going to the insurer. As long as the insurer gets this money, they will insure anything. So, as we grow wealthier, we demand better health care, and the insurance and health care professions are more than happy to oblige us.

In reality, health care is much cheaper than it used to be. MRIs, CT scans, are all much cheaper than they were, and I would guess aspirin has not kept up with inflation. However we have more stuff available.

Best to think of health care as having a high income elasticity. In 100 years, when real GDP will be like $200,000 per capita, likely we will spend $100,000 a year on health care...why not!
How much stupidity can be squeezed into a single column
written by Jennifer, January 08, 2013 11:04
First there handwringing over the fact that people who vote--kind of get the sense he could do without the democracy thing--are concerned about health care for the elderly. There is the usual trotting out of health care costs that are so large THEY WILL TAKE US ALL. If people like David Brooks really cared they would take note of the fact that health care costs are coming down. In addition there are more ways--aside from trade policy--that costs could be brought down more if the hospital-industrial complex and its acolytes were aggressively confronted, as opposed to just slashing benefits for people. But really the whole thing is summed up by this quote:
"Europeans . . . , have chosen welfare over global power." By "welfare" people like Brooks mean bad government policies but members of the human race would take this to mean the well-being of the human population. Pretty sure if this particular sentiment was put to a vote, it would win in a landslide. Interesting Brooks does not even attempt to articulate the consequences of the "military decline" that could occur. Could this be that for somebody not connected to the defense industry--most of the population--the consequences are entirely positive? For all of the suffering Europe is going through the "global power" issue does not seem to come up. Most of the global population would root for such a decline as they are all too familiar with the consequences of the US as a global power-- support of coups/undermining of democracy, support of corporate power at the cost of people, killing innocent people through drones and war.
written by skeptonomist, January 08, 2013 11:58
Actually Bismarck did quite well in providing social welfare services and making Germany into a world military power. Neither Spengler nor Brooks have ever got much right, especially on social services.
David Brooks is Terrified that Big Health and Big Defense Must Compete for Funds
written by Last Mover, January 08, 2013 11:58
Who wudda thunk it? Of all the phony crowding out theories spouted by conservatives, David Brooks comes up with a whopper. Medicare crowds out DOD and the conspiracy behind it is Obama's choice of Hagel to cut DOD to the bone and shift the difference to support Medicare's out of control costs.

The least Brooks could do is make the comparison on a level playing field, pitting the private health care against private military contractors, all culpable in driving costs through the roof from the supply side. It's certainly not consumers and taxpayers doing it because they "like" their Medicare and DOD.

Private health and military contractors have been getting a free ride too long on risk free cost-plus contracts loaded with economic rent. Let them face off with each other in a crowding out budget duel to the death and experience the free market competition they preach for everyone else.
Saving health care dollars by private enterprise competition
written by Richard Karpinski, January 08, 2013 1:39
Let's have some competition for achieving better health while saving money. Let private companies get awards for showing how health care payers can save money and get better health outcomes. Give awards of 10 to 20 percent of the savings for the first five years of reduced costs for each improvement, but paid out gradually over several years so that they can be adjusted if the savings disappear over time. But also give awards to the payers who actually accomplish the identified cost savings and health outcomes.
written by dick c, January 08, 2013 4:55
Great!! Let's shrink one tumor so the other has room to grow!
written by denise, January 08, 2013 5:41
Where was all the hand wringing when the parasitic financial sector was ballooning, sucking up GDP while providing little benefit to most people? Why is it a problem to have a large health care sector but not a large financial sector? Of all the things we could spend money, health care seems like one of the better ones - and it provides good employment for lots of people.

I have an idea.
written by Anna Lee, January 08, 2013 7:41
If Brooks is so worried about eating crowding out killing, then perhaps he could help raise more money. The first thing that comes to mind is that his current activities really do not contribute much to the productivity of the US so perhaps he should choose another career.
It's all about Brooks
written by David, January 08, 2013 11:05
Mr. Brooks wants a finely-fed, healthy military to protect his gated retirement community from those not-dead-yet seniors he cut out of medical care.
written by watermelonpunch, January 08, 2013 11:22
Note: Text of 1st sentence of commentary has an extra word, or maybe one missing.

There was one part of this article not mentioned here!
I think the most egregiously disingenuous part of that article was this:

Advocates for children, education and the poor don’t even try to defend their programs by lobbying for cutbacks in Medicare. They know that given the choice, voters and politicians care more about middle-class seniors than about poor children.

First, I think that's an ungenerous statement about voters, but whatever.

Um no. That's not why they don't defend their programs more by lobbying for cutbacks in Medicare. The inaccuracy on so many levels of this assertion is just BREATH TAKING.

#1. People who are poor one day expect to get Medicare!! Some uninsured working poor look forward to when they'll turn 65 - not because they intend on retiring, but because they'll finally have proper medical attention!!

#2. People who are poor often have elder family members for whom they are too poor to care for, and (like most people) are grateful that at least their parents & grandparents are getting needed medical attention they couldn't afford otherwise.

and really, the most obvious reason...

#4. Poor people and children don't the vast money needed to have a powerful lobby advocating them! And the very poor don't have the resources &/or the time to really do much grassroots activism themselves.

Many people on these programmes now, were never on these programmes before the financial crisis.
(And many of the newly poor & struggling who receive this kind of assistance, instead of being grateful and supporting it publicly & to their representatives... hide in shame & denial, hoping their misfortune is temporary and that they don't need someone advocating for these programmes for them.
But give these people another year or 2 still stuck on some level of public assistance programs. Methinks more will be making some noise.

Brooks would rather see people denied care under the argument that it is necessary to preserve the country's military standing in the world.

Maybe you got this backwards?
Maybe Brooks thinks we should deny people care, and we need a strong military force ready in order to do that?
:-O ^^ :/
Just one interpretation...
diplomacy by other means
written by Bill Turner, January 09, 2013 7:42
The famous quote of Clausewitz of war being diplomacy by other means only hints at the truth that a militarily powerful nation will use that tool much earlier than they otherwise might. The history of US interventionism, something far too few people in this country know about and/or are willing to deny, is proof of this.
Oswald Spengler ?
written by john Yard, January 09, 2013 10:01
David Brooks a penpal of Oswald Spengler? The Oswald Spengler who made the Kaiser look insightful ? I read the Decline of the West, and thought it profound, but I was twelve years old .....When will the Times fire this guy ?
written by watermelonpunch, January 09, 2013 11:26
@ Bill Turner : You're right, far far too few people know about the history of U.S. interventionism.
The main problem being that if it's not taught in primary school history lessons, and it's not at least mentioned in the media aimed at the general public... It means that you have to go research things, seek out rather dry books to read, and find rather obscure documentaries about it. And people working, with children, just have too many demands on their time to do this sort of thing. Especially those who are not in a position to buy higher education, and indeed must often work 60+ hours per week at exhausting jobs.

Anyway, I see now that I accidentally deleted out the #3 line in my comment above! Doh!
#3 Many poor people ARE seniors receiving Medicare!
Neither Democrats nor Republicans want to admit that health care is overpriced
written by Rachel, January 10, 2013 12:24

The politicians will admit, it seems, that health care is so extremely expensive that it can harm our economy. But they will not admit that very high prices of doctors, hospitals, testing, imaging, and drugs are major causes of the problem. To admit this overpricing might harm some of the politicians' highly privledged (overpaid) political supporters. Can't have that.

And so the politicians seem to find it easier to let more people die sooner. Or maybe sell more government property. Or disband an army. Or beach the Navy. Any or all of these options seem more attractive to them than the idea of trying to promote efficient markets, with lower prices, in health care.

(About the recent moderation in the rate of health price inflation: Unfortunately, the editor of Health Affairs, on The News Hour Monday night, indicated that health spending inflation has declined recently, but NOT because of any good effect of government plans. It is because over the recession, between 2007 and 2010, some 7 million more people went without health insurance.)

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.