CEPR - Center for Economic and Policy Research


En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press Does Joe Nocera Know Nothing About U.S. Health Care Costs?

Does Joe Nocera Know Nothing About U.S. Health Care Costs?

Saturday, 28 May 2011 07:59

New York Times columnist Joe Nocera told the Democrats that they should take Paul Ryan's plan to privatize Medicare seriously because the country will need something like this to restrain costs. In fact, the assessment of the Congressional Budget Office was 180 degrees at odds with this view. It projections showed that the Ryan plan would increase the cost of buying Medicare equivalent policies by $34 trillion over the program's 75-year planning period.

Nocera also asserted the need for means-testing Medicare. Unless his intention is to sharply reduce benefits for people earning in the neighborhood of $60,000 a year, this route offers small savings.

The United States already pays more than twice as much per person for its health care as the average for other wealthy countries. This gap is projected to grow in the decades ahead. If the United States got its health care costs more in line with the rest of the world or allowed free trade in health care, then there would be little problem with paying for Medicare.

Comments (7)Add Comment
What you say is all true, but perhaps more detail is needed to convince the uninitiated
written by Rachel, May 28, 2011 10:44

For instance, here's a little compelling detail from Ezra Klein's blog, Nov.2, 2009 about the useful drug Lipitor. In the high-priced Netherlands it costs $63 for some amount, but in the US for the same amount its price is $125 - $335!

Also in high-priced Germany, a CT scan costs $319. Here, it was $950-$1400.

Since Americans had over 60 million CT scans in 2008, and we paid over $830 extra per scan extra, that means that by German standards, we paid about $50 billion extra for CT scans. In one year.

We paid even more by the standards of France, UK, Spain. (This is per capita adjusted, naturally.) Only about $40 billion more by high-priced Canadian standards.

But P billion--this doesn't include the cost of those scans we might have done without, if we'd all known more (see Terry Gross and Walt B. on this) about being a careful CT scan consumers.

written by Alan, May 28, 2011 11:13
Normally I agree with Dean, however this time Dean has over reacted to the Nocera column. Nocera did not say we should follow the Ryan plan. He simply said health care costs must come down or else Medicare is in trouble. It is true that the Democrats have proposed nothing beyond the health care law that will materially affect long term health care costs. Dean's ideas to limit patents and use foreign health care systems for medicare participants is not Democratic policy.
written by bmz, May 28, 2011 12:00
But we can fairly easily reduce Medicare/Medicaid costs consistently with those experienced in Europe. The Veterans Administration healthcare system is fully socialized like the Europeans, and like the Europeans, it is higher rated than US private healthcare and costs only two thirds as much. Normally we could expect the Republicons to demagogue the issue to death, but they're the ones who say that we MUST reduce Medicare/Medicaid costs; and if it's good enough for our veterans, it should be good enough for our seniors.
written by PeonInChief, May 28, 2011 1:12
Government systems cost less because the government negotiates rates for services and products (drugs etc), and looks at what the services should cost, not what the medical groups that own the imaging centers and the like what to charge. (That's why the VA does so well. It negotiates with providers and drives a hard bargain.)
Health Care Costs
written by Ethan, May 28, 2011 2:17
Politicians's comments on health care costs -- to the extent they exist at all -- are mostly fanciful. The best summary I have seen of research in this area is "The Cost Conundrum" in the June 1, 2009, New Yorker. It is still available on line. It contrasts Medicare's high cost areas (fee for service in McAllen, TX) with Medicare's low cost areas (Mayo Clinic in Grand Junction CO). Some of the results seem surprising -- Texas limits recoveries in medical malpractice, and this doesn't seem to limit health care costs. Some of the results seem self evident -- when physicians are salaried (not fee for service) and when they don't refer to labs/clinics in which they have a financial/ownership interest, over all costs are less.
written by Ellis, May 28, 2011 4:18
At the New York Times, Joe Nocera replaced Bob Herbert as a regular Op-Ed columnist and now Frank Bruni is replacing Frank Rich. Do you get the impression that the Times columnists are becoming more right-wing?
written by PeonInChief, May 29, 2011 1:24

The right wing has claimed that medical malpractice awards drive health care costs, but all the evidence to date is against that. At most it adds 2% to the cost. Tort reform is not going to solve the problem.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.


Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

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.