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The Agenda

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

Samuelson and McArdle on Health Reform



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Earlier this month, Robert Samuelson wrote a thoughtful, and pessimistic, column on the likely consequences of the health bill’s success. It is worth reading. One of the more provocative passages suggests that we won’t see a significant improvement in health outcomes.

Studies of insurance’s effects on health are hard to perform. Some find benefits; others don’t. Medicare’s introduction in 1966 produced no reduction in mortality; some studies of extensions of Medicaid for children didn’t find gains. In the Atlantic recently, economics writer Megan McArdle examined the literature and emerged skeptical. Claims that the uninsured suffer tens of thousands of premature deaths are “open to question.” Conceivably, the “lack of health insurance has no more impact on your health than lack of flood insurance,” she writes.

How could this be? No one knows, but possible explanations include: (a) many uninsured are fairly healthy — about two-fifths are age 18 to 34; (b) some are too sick to be helped or have problems rooted in personal behaviors — smoking, diet, drinking or drug abuse; and (c) the uninsured already receive 50 to 70 percent of the care of the insured from hospitals, clinics and doctors, estimates the Congressional Budget Office.

And McArdle, in a wide-ranging post, offers more on this theme:

Ezra Klein is confidently predicting that it will save hundreds of thousands of lives. …

Conservatively, Ezra’s arithmetic implies a reduction in the death rate of people between 18-64 of at 20,000-45,000 a year.  Let’s take the low bound–20,000 deaths a year–and assume that we should see that, or something close to it, by 2020. That’s about 3% of deaths in the relevant age group, which would show up as a very noticeably kink in the death rate.  For comparison purposes, the entire fall in mortality between 1980 and 2000 was about 2.7%. Contra Ezra, I am predicting that this will not happen.  I’m about 75% confident that you will not be able to discern any effect from the health care reform among the statistical noise.  But I am 95+% confident that the effect will not be as large as 3%. She goes on to offer a number of other fairly pessimistic predictions, all of which strike me as entirely plausible. One of her predictions strikes me as particularly compelling, and I worry that congressional conservatives will push this next step as avidly as congressional liberals: I predict at least one of the major funding sources, and possibly all of them, will be substantively repealed:  the Medicare cuts (except Medicare Advantage), the excise tax, and so forth. More on this in the next post.



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