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Home Publications Blogs Beat the Press If Obstetricians Charge Medicaid for More Unnecessary Caesarean Sections Will It Reduce the Poverty Rate?

If Obstetricians Charge Medicaid for More Unnecessary Caesarean Sections Will It Reduce the Poverty Rate?

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Wednesday, 03 October 2012 05:03

It will according to the Congressional Budget Office's new method of measuring income as discussed in a column by Eduardo Porter. While Porter does present the view of Timothy Smeedling a critic of this new approach, it would have been worth expanding on some of the issues raised. In contrast to items that are directly under consumers' control, we are measuring what the government pays for health care.

We know that the United States pays more than twice as much per person for care as the average for other wealthy countries with little obvious to show for this spending in terms of outcome. This suggests that the U.S. health care system has an enormous amount of waste. If that waste increases, say by paying specialists higher fees, paying drug companies more money, or paying for more unnecessary procedures, the new method would imply that we have lifted more poor people out of poverty.

Given the difficulty of measuring the benefits of health care it might be useful to have measure that looks at income net of health care spending and then looks at health care outcomes for different groups. Recent evidence suggests that the poor have not benefited much from the big bucks the government has been paying for their health care, since life expectancies have stagnated or even declined.

Comments (14)Add Comment
Uh ....
written by David, October 03, 2012 6:51
Who cares if you can get food, clothing, or housing for your family, when there's an endless supply of Xanax as part of your income.

It's funny that the article refers to Cadillac healthcare, when the evidence bespeaks a bicycle, at best.
cash v. in kind transfer
written by pete, October 03, 2012 7:29
Indeed, with in kind transfers, the omniscient government must somehow get it right for millions of folks, guessing what people need, etc. Most economists, I think, realize that cash ( a shift in the budget constraint) is more efficient than payment in kind, for this reason. For example, premium support or health savings contributions, high deductible plans (banned under Baccus-care), etc., all put extra cash in the hands of the poor, where they can begin to choose wisely among available health care options. This certainly beats wasting precious money, driving up health care worker salaries to the highest in the world. Why oh why does everyone ignore regulatory capture? Next cosmetic surgery will be free for all.
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written by Last Mover, October 03, 2012 7:31
According to a reported Paul Ryan Powerpoint presentation on Caesarean Section vouchers, the essential part with true benefits will soon be separated from the non-essential part with no benefits - that part paid by the patient above the amount of the voucher - to solve this problem, so it's win-win all around.
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written by Kat, October 03, 2012 8:23
This is downright offensive. Perhaps we can pull everyone out of poverty by switching medicaid recipients from a generic to brand name drug?
In my state children in foster care are placed on psychotropic medications at a far greater rate then children in the general population. These children are likely to remain on these drugs even when reunited with their families, many who live in poverty or near poverty. We could address other issues that affect their mental status: inadequate and crowded housing, food insecurity, the psychological damage of income inequality. Or we can keep shoveling money at the pharmaceutical companies. I suppose it is a jobs program of sorts-- for the various social service and health care workers "coordinating care", and of course all those benevolent pharmaceutical employees.
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written by liberal, October 03, 2012 9:50
pete wrote,
For example, premium support or health savings contributions, high deductible plans (banned under Baccus-care), etc., all put extra cash in the hands of the poor, where they can begin to choose wisely among available health care options.


This is related to but not the same as Dean's point.

The problem with advocating consumer choice as a method to combat inefficiencies in the health care and health insurance markets is that it won't work, and it can't work. The economics of medical care are too beset with market failures, which has been known since at least that paper by Ken Arrow decades ago.

The countries with the most efficient health care systems are the ones with the most socialistic ones.
Maybe this would make more sense in Maryland than elsewhere.
written by Roger Vance, October 03, 2012 1:24
I do not see who an inteligent person like you can link to this
written by Floccina, October 03, 2012 4:39
Some cautioned that the results could be overstated because Americans without a high school diploma — about 12 percent of the population, down from about 22 percent in 1990, according to the Census Bureau — were a shrinking group that was now more likely to be disadvantaged in ways besides education, compared with past generations.


Considering the above I do not see who an inteligent person like you can link to that "evidence" that suggests that the poor have not benefited much from the big bucks the government.

I agree that they do not benefit much nor anywhere as much as the medical establishment but that study shows NOTHING!
Fiocinna and nothing
written by David, October 03, 2012 6:21
To me, the group of poor, white female high school dropouts are not nothing. Ascribing to them benefits they clearly are not receiving (according to that evidence) is a travesty of ethics.
Market failure, and why the poor die younger
written by Rachel, October 03, 2012 11:36

What causes poor people to suffer from worse health?
Of course there are many reasons: poor living conditions, poor food (fish and broccoli aren't cheap), problems on the job, high crime neighborhoods, lack of decent vacations, limited opportunity for exercise, etc.

And then there's health care. Many like to assume that the only problem that the poor face is the lack of insurance. But I have talked to many poor people who are enrolled in non-profit HMOs. It is surprising how bad it can be for these people, how little is done for them, how little is communicated to them, how little concern is shown for them. Yet many of the patients, not having rich friends with doctors who actually seem to care about them, don't entirely know that it shouldn't be this way. In any case, what can they do? They haven't got any choices.

And why do the markets fail so badly? Was Kenneth Arrow correct in his novice ponderings half a century ago? Or did he simply justify prevailing prejudices, on the grounds that it was good enough, and change would be costly? But now the system is too costly to keep. It would be best if we could increase the supply of doctors, and try to make health care more efficient, with better-informed patients with more choices. But the trend, dominated by high-income professors who want good jobs for their inlaws, seems to be towards more control by doctors.


...
written by liberal, October 04, 2012 8:49
David,

That's not Floccina's point. AFAICT her point (which appears to me to be well-taken) is that the claim that longevities have decreased is flawed because the group to which the claim is being applied has changed considerably over time.
...
written by liberal, October 04, 2012 8:55
Rachel wrote,
It would be best if we could increase the supply of doctors, and try to make health care more efficient, with better-informed patients with more choices.


No, that's exactly the wrong lesson.

The right lesson is that choices should be constrained in a top-down socialized model, using evidence-based medicine to get the best outcomes for a given budget constraint.

"Choice" will just lead to health care providers attempting to maximize their income. That path leads to economy-busting levels of unnecessary, wasteful care.
...
written by liberal, October 04, 2012 9:01
Rachel wrote,
Of course there are many reasons...


My impression is that studies from Britain have shown that merely being lower on the social hierarchy, in and of itself, takes years out of one's lifespan (on average).

Slightly mystifying, until one emphasizes the extent to which we're very social primates.
Let me add that one reason for not
written by Floccina, October 04, 2012 9:57
Let me add that two reasons for not graduating high school are poor health or early death and with so few females now not graduating this can be significant. The linked article is exactly the type of yellow journalism that I expect Dean to debunk in "Beat the Press"!

Also sorry about the typo it should have read:
I do not see how an intelligent person like you can link to this
Is "suggest" the same as "prove"?
written by Bill Heffner, October 04, 2012 10:15
"We know that the United States pays more than twice as much per person for care as the average for other wealthy countries with little obvious to show for this spending in terms of outcome. This suggests that the U.S. health care system has an enormous amount of waste."

There could be many reasons why our health care costs more than twice as much as overseas, not just the "waste" and "overuse" that is the easy and overused assumption. The fact that an operation which costs $100,000 in the US can be had for a mere $10,000 in India "suggests" to me that fraud and price manipulation, anti-competitive practices, are a far bigger reason than are "waste" and "overuse."

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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.

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