Imagine what it must be like for Paul Krugman. He actually writes for the NYT, but it seems that no one there ever reads him.

3% for administrative costs by Medicare, vs. 30% elsewhere. That's what many doctors claim, in their advocacy of a single-payer plan that would certainly benefit them. (Medicare is not known for its pursuit of extravagence, waste and fraud.)

This inflated notion of "non-single-payer" expenditures seems to have killed off inquiries into what else is making our health system so expensive, and has is doing so much harm to Labor, and our national budget.

The problem is that 3% is not accurate assessment of the situation. Canada pays much more than 3% on administrative costs, although still just half what is paid in the US.

But the primary factor in what makes our health system so expensive is not administration. It is the costs of labor, of doctors and nurses and others. There are also the high costs of the hospitals and equipment, and an inefficient system.

At the root of these other factors is a lack of transparency and competition, the inability to take your money and go elsewhere, whether it is to Korea or to the clinic around the corner.

And why have so many labor goups NOT pushed for more competition and transparency? It seems to be because it hasn't occurred to them that doctors, like other competitive human beings, can be both self-interested, and economically unsophisticated. And the second is liable to make the first much worse, as happens with these doctor-lobbyists (and others. Wasn't it Jon Gruber who told Vermont that we want a system in which doctors are no less rich?)

Other thought-killers. Rrom the Right Wing: it's all because of malpractice claims. From the Left: it's all because of not enough primary care. Both are small factors, and a small percent of $3 trillion is a lot or money. But the main reason our health care system is costly is that people don't demand more competition and better quality.

Dear Dr. Dean Baker,

    I pretty sure you exist since I met you last year at the Campaign for America's Future conference, but something else in the NYT article doesn't exist.

From the same article:

"Yet under Mr. Ryan’s budget plan, annual deficits would persist for decades because his proposed tax cuts would offset deep spending cuts."

       While Ryan has proposed some spending cuts, the bulk of his saving come from eliminating provisions in the tax code of which Representative Ryan has identified exactly zero.

  Since an estimated almost 1.3 trillion dollars of hidden spending are buried in the tax code as credits, exemptions, loopholes and deductions, Ryan could easily find the money there and perhaps his silence in brilliant political calculation, except for the pesky problem of Mr. Arithmetic.

      One glaring detail that has gotten zero press attention is that Ryan's budget both claims to achieve revenue neutral tax reform and raise significant revenues as a percentage of GDP.

      In the first supplemental chart for Ryan's 2013 Path to Prosperity, revenue as a percentage of GDP quickly rises from 15.8% in 2012 to 18% in 2014 which is an impressive net increase of 13.9% in the next two years.

My question for Dr. Baker and readers is how is that possible with median wages declining for individuals and wages as a percentage of spending for corporations also in decline?

If the CBO hadn't just inserted the numbers provided as ordered by Ryan's committee we'd see a much smaller increase in revenue as a percentage of GDP due mostly to the slowly recovering economy and perhaps improving unemployment and we'd also see a huge explosion of debt.

One issue with making any change to the USA healthcare system is the conservative nature of most people and American institutions.

For example, government programs, see sugar subsidy and farm subsidies, mining/grazing rights on government lands, and massive military presence seem to live long past their sell by date.

This puts both Obama and Romney in the economic conservative camp to judge from their actions and intended actions.

And wasn't that Mancur Olson's argument, that a self-interested rot creeps into private and government institutions that is difficult or impossible to undo?

Channeling George W. Bush, "bring on" the deficits as that might force the USA to make some positive changes that actually touch some of the interest groups that fight against any change.

It's not a burden if it's not paid for. And it's not paid for if it's not received. The alternative would be to keep the current system and make it available only to those who can pay. As for the rest, they should die quickly so as to decrease the surplus population.

Rachel wrote,

At the root of these other factors is a lack of transparency and competition, the inability to take your money and go elsewhere, whether it is to Korea or to the clinic around the corner.

Some lack of competition is responsible, but due to inevitable huge market failures in health care, restoring competition simply is incapable of fixing the problem entirely. That's why medicine itself, not just medical insurance, should be socialized, and treatment methodologies be driven top-down.

Regarding my request for ways to raise revenue as a percentage of GDP in a revenue neutral way, please limit responses to things in the Ryan plan or proposed by Representative Ryan.

Please don't include proposals Ryan doesn't support like significantly raising the minimum wage, single payer health care etc. I also consider letting the 2% temporary payroll tax cut to expire a tax increase that breaks Ryan's pledge for revenue neutral tax reform.

Another interesting point that I've never seen mentioned in the press is that while Ryan hasn't named any current loopholes he'd eliminate, Ryan has rejected some specific new loopholes.

From the Path to Prosperity 2013, p. 67:

"This budget affirmatively rejects President Obama's efforts to raise taxes on small businesses and investors and to add new loopholes to the tax code for favored interests."

So among the hundreds of current loopholes, Ryan can't name a single one he'd cut but he pledges a blanket ban on any new ones offered by President Obama.

I have to point out again (I am reading posts in reverse time order) that the increase in the fraction of old, post-working-age people is about the same as the decrease in young, pre-working-age people:

http://www.skeptometrics.org/PopByAge.png

Claiming that we must be panicked because of the changing retired/working ratio is nonsense. What must be compared is the expenses for children as compared to those for retirees. Older people usually have increased health-care expenses, but children get sick too, and there are lots of expenses for education. Just looking around in a typical city, do we see more schools and colleges/universities, or more hospitals and retirement homes? Why aren't economists giving us a detailed comparison of these things? (we obviously can't rely on pundits like Thomas Friedman). How much of the projected increase in medical care costs is actually due to the increasing fraction of elderly? Are education expenses not shrinking as the birth rate has declined? If not, why not?