Tuesday, November 26, 2019

HEALTHCARE INTERVENTIONISM: The Most Confused Thing I Have Ever Heard Tyler Cowen Say

Mark Zuckerberg and Tyler Cowen
Facebook's  Mark Zuckerberg is now apparently doing video interviews.

He sat down with Tyler Cowen and  Patrick Collison for one of those interviews.

One of the comments Tyler made still has my head spinning. He is definitely spending much too much time inside the beltway.

To one Zuckerberg comment, Tyler responded:
Here's what worries me, and it should worry you too. So as you mentioned, U.S. life
expectancy is basically going up in linear fashion. But if you look at expenditures, we used to spend a few percentage points of GDP on healthcare, and now it's about 18%. So we've gone up to 18%, and we're not even boosting the rate. I'm not saying it's the fault of any one group of people, but something has gone wrong. There's some kind of last-mile problem. You can turn to the newspapers and read all kinds of fantastic stories--new research, new ideas, new tools--but when the rubber hits the road, people living longer, we're spending more and more and more for exactly the same returns. So if that trend continues--and you see a similar trend in many areas-- also crop yields, feeding the world, other areas--the question becomes, you know, where does all the progress go? So the idea that you need to look at each structure and encourage more risk-taking, better decisions with the money, less bureaucratization--maybe in some cases more
centralization, whatever it takes--but that there is this invisible crisis, and people are distractedby the headlines or whatever. But actually what you get for the money--performance is so-so, I think. 
What?

Does he not realize that expenditures skyrocket in areas like healthcare where government is a major player?

Does he not realize that the quality of products and services decline where government is a major player?

All he says is "I'm not saying it's the fault of any one group of people, but something has gone wrong. There's some kind of last-mile problem."

He then goes on to say that what may be needed is "less bureaucratization--maybe in some cases more centralization, whatever it takes."

More centralization?

Centralization is the problem. We need a return to free markets in healthcare and the elimination of government subsidies and regulations in the sector. It is the central power surrounding subsidies and regulations which become the target of crony operators who end up distorting the system, making it much more complicated and much less efficient.

This is pretty basic stuff. Why isn't Tyler making these points?

-RW





2 comments:

  1. At the root of all calls for the government to "do something" is a sort of child-like belief in magic. There's something I want done, but I'm not sure how... let's just imagine my big imaginary friend does the thing! Problem solved.

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  2. How much of the rising cost of healthcare is due to an aging population and how much is due to government intervention? We all know the population of the developed world is at its oldest in history.

    In the USA 70% of healthcare expenditures take place in the last half of life (or more accurately 45 years old and older).

    Live births both as a percentage of the population and in numbers peaked in 1957. How much of the healthcare cost increases is due to these baby boomers becoming oldster boomers?

    Deaths as a percentage of the population hit their lowest in 2009 at 7.9%. They have been going up since then. They were at 8.7% in 2018. How much of this is simply the huge birth rate of the 1950’s ending up in a large death rate 60 plus years later?

    So we have a perfect storm. More and more old farts plus more and more government intervention. Does one beget the other?

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