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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

The Best and the Brightest



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When Pulitzer prizewinner David Halberstam used the title “The Best and the Brightest” in his 1972 book on the Vietnam War, he was using it ironically. The Kennedy and Johnson administrations had recruited the best and brightest scholars and leaders to Washington, with the thought that these brilliant minds would lead the nation to its greatest heights.

It didn’t work out that way. Vietnam permanently damaged the country and led directly to many of the foreign policy problems we have today. The best and the brightest, Halberstam observed, concocted “brilliant policies that defied common sense”—reminding us that intelligence is not the same as wisdom. This distinction between intelligence and wisdom was also behind Bill Buckley’s contemporaneous contention that he “would rather be governed by the first two thousand people in the Boston telephone directory than by the two thousand people on the faculty of Harvard University.”

In health care policy, the difference between intelligence and wisdom is too often blurred. I was reminded of this when re-reading an open letter, penned by 23 prominent economists, sent to President Obama to insist upon the importance of health reform, and of certain parameters thereof.

Many people believe that the academic community should serve as the arbiter of what is a good or a bad idea for health care reform. (This idea is especially popular among academics.) During the Obamacare debate, the President spoke often of how “every single serious idea” on reducing health-care costs was incorporated into the legislation. He was speaking truthfully—if “every single serious idea” is understood only to mean those that are widely accepted by the academic community.

There were, and are, a lot of other good ideas that the President ignored: moving to an individual market for health insurance; expanding consumer-driven health care; increasing cost-sharing for government programs. But those ideas, and others with a free-market bent to them, were contrary to the President’s ideological orientation, and their principal exponents were outside of the academic orbit.

Academics see themselves as the most disinterested observers of the health care world: or, more precisely, the ones who are most committed to a rational and humane health care system. Analysts from industry, in this view, are corrupted by their economic interests; and analysts from think tanks (especially conservative ones) are hopelessly biased by their ideology.

But is the academic world non-ideological? At least 90 percent of health policy academics, if not more, are left-of-center. Populist conservatives like to complain about this, but in fact this phenomenon does a greater disservice to liberals than it does to conservatives, because it diminishes the quality of their work.

Academic explorations of health care policy often suffer from several handicaps, handicaps that are exacerbated by ideological conformity. They include:

  1. Group-think. Academics are rewarded for publishing articles in peer-reviewed journals. What this means in practice is that academics are rewarded for gaining the approval and acceptance of other academics: a process that reinforces group-think at the expense of rigorous criticism.
  2. Homo academicus. Because the incentives of academics revolve around the approval of others, rather than objective economic failure or success, it is difficult for academics to relate to the health care world as it actually exists: one in which economic incentives drive the behavior of patients, doctors, hospitals, insurers, and product manufacturers. In the economic world, there is such a thing as failure, in a way that is difficult for many tenured professors to fully appreciate.
  3. Elitism. If you study the health care system in a lot of depth, it is natural to feel that your views should carry more weight than those of people who haven’t studied the issue as much. It is easy to be pessimistic about the unsophistication of ordinary people, to believe that ordinary people will benefit from the guidance of disinterested experts like yourself, and to dismiss the ideas of those who you perceive to be less expert, and less disinterested, than yourself.
  4. Bad data. Ludwig von Mises and Friedrich Hayek observed long ago what has become known as the economic calculation problem: that, in a centrally planned economy, there is no way to gain an independent sense of how the market values various goods and services. As a result, academics are often overconfident of their ability to predict how various reform proposals will play out in the real world.

This isn’t to say that all academics are bad, or that academics never do useful research. It is merely to suggest that academics should approach their craft with more humility than they often do. There are many other sources of health care research that academics would be well-served to consider:

  1. Think tanks. Because of the ideological conformity of the academic world, think tanks provide a useful counterpoint. Indeed, many right-of-center think tanks were explicitly created as a way of providing a home for academically-oriented policy experts who found it difficult to gain acceptance in the left-of-center academic community. In my own policy reading, I find that think tanks are an excellent source of original, non-consensus thinking on health care policy.
  2. Industry. The health care industry puts out quite a bit of data, and also a fair amount of policy analysis. However, academics, especially liberal ones, frequently dismiss analyses from industry as corrupt, because they assume that industry is out to advance its economic interests. But whether an analysis advances one’s economic interests is independent of whether or not the analysis is accurate. And not all analyses are driven by greed: for example, CIGNA (a health insurer) can make money regardless of what type of health plans people use, so its analysis of why people choose some plans over others is highly useful, as it takes advantage of the company’s proprietary consumer research.
  3. Wall Street. Wall Street analysts produce outstanding research on the health care industry that well exceeds the rigor of most academic studies. This is true for three reasons: (a) Wall Street analysts are incentivized to accurately assess the economic prospects of health care companies in real time, whether good or bad, in a non-ideological fashion; (b) Wall Street has considerable economic resources with which to conduct research that, in the academic world, requires grant applications and bureaucratic approval; (c) analysts gain immediate feedback, in the form of stock prices and company performance, as to whether or not their predictions have proven accurate. Hence, they are able to know when they have made mistakes, and are able to learn from their mistakes. However, the work of Wall Street suffers from two major drawbacks: (a) it is limited to those areas of the health care industry that are relevant to the financial markets; (b) it is distributed to paying clients, and is not generally available to academics or the public. The best research does leak out, however.
  4. Industry consultants and professional societies. There are plenty of health care analysts, at places like Deloitte and Ernst & Young, who consult for private companies and provide much of their research to the public for free. Societies like the American Academy of Actuaries do the same (here is an excellent analysis of consumer-driven health care from the AAA). Consultants often get tarred by the left for their industry associations, as PriceWaterhouseCoopers unfairly was for their insurer-sponsored study on the impact of Obamacare on the cost of health insurance. But again, either the analysis is correct, or it’s not. Ad hominem attacks against the authors’ motives don’t advance the debate.

All of this is to say that I hope we can improve the quality of the health care debate by focusing less on where health care research comes from, and more on how good that research actually is: is its data accurate? Are its methodologies sound? If we can do more of that, instead of prejudicially dismissing the views of those who come from institutions we suspect, we are bound to learn much from each other.



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