Bryan Caplan's HealthCare Critique Inspiring Awe

     Some kind of awe anyway. Sumner was praising him effusively

     "Bryan Caplan has a very powerful critique of Jonathan Gruber’s book on health care reform.  I’m in awe of well-informed bloggers like Caplan; I don’t know how they are able to read so much.  I’m not quite as bad as a former department chair I had (who used to boost that he’d written more books than he’d read) but that’s only because I have yet to publish my first book."

     After reading this "very powerful" critique I agree it's powerful in its own way. It's powerfully awful. Caplan-AKA The Liquidationist-doesn't like Gruber's new animated book on health care reform. Let's look at his critique:

    "Gruber explains the basic facts about health care costs: they're rising, and government picks up much of the tab.  But he almost totally neglects the connection between the two.  Medicare and Medicaid vastly increase demand for health care.  There's no denying it.  Imagine how much more affordable health care would be if these programs had never been adopted - or if they were abolished."

     So we know that Ryan's plan must give Bryan a woodie. If Medicare(and Medicaid) vastly increases demand for health care that's not a surprise. All those who were previously uninsured and couldn't afford health care can now receive it. Of course demand goes up. That's a no brainer. Before "ObamaCare" passed there were 53 million Americans without health care insurance. With the passage of AFA as many as 32 million will be covered. This too will vastly increase demand. That is what happens when the uninsured become insured.

     Caplan has all kinds of scorn for a group he calls populists. What is a populist I wonder? Let's see if we can tease it out from him:

     "More generally, Gruber ignores almost everything government does to increase the cost of health care.  There's no discussion of medical licensing versus certification.  There's no discussion of the regulatory barriers to low-cost, high-deductible policies.  There's no discussion of medical liability.  He mentions the high cost of "free" emergency room care, but fails to mention that this is a side effect of long-standing populist policy: government forces emergency rooms to treat people even if they certainly won't pay.

    Ok, so a populist is someone who does things like forces an emergency room to treat people even if they certainly won't pay. Thing is as much as Caplan throws around the charge of populism I don't consider myself populist-I have spoken with many populists who don't consider my populist. However I don't buy that a better policy would be to simply allow poor people who need to go to emergency room to drop dead in the streets, no matter how many "costs" are "saved."

   His attempt to discuss costs suffers from a real paucity of understanding what costs are. So there are no soical costs in his mind to simply basing health care solely on ability to pay. For that's his health care plan, Bryan Caplan style: if you are too poor to afford health care, drop dead.

   However, let's enter in just a moment to his somewhat grotesque idea of economising. Even if emergency rooms can save money by refusing to treat someone because they don't have the money, there are still costs that someone has to pay. Caplan's moral vision is evidently feeble enough that he doesn't care about the human costs. But even human costs have attendant economic costs. If someone dies in the street, the city still has to spend money to go out and pick him up. The emergency room still has to send out an ambulance and take him to the morgue. Then there is all the money spent in cleaning up the streets where all these poor people are dropping dead.

     If thinking so is populist I stand condemned.  To enter into Caplan's somewhat grotesque moral universe for a moment, even if you let someone die in the streets to save the emergency room money there is still a tab. It is still not costless for society. After all the ambulance still has to go out and get him to take him to the morgue. The street has to be cleaned up after the fact. Having people die left and right brings down property values. Of course I may be populist enough to think that there are other costs besides that. That there are social costs beyond Caplan's narrow economizing that are important. But then he must be right-he's rich.

    Indeed Caplan inhabits some sort of moral universe. His worry is "moral hazard" which is the moral hazard that comes if we don't let poor people who are sick drop dead.

    "There's zero discussion of moral hazard - the unhealthy lifestyles that many people choose despite the risks.  For Gruber, or at least Gruber the graphic novelist, bad health is something that "just happens to you."  Sigh.  Insurance companies aren't omniscient, but they could do a lot more to tailor rates to risks - if it were legal to do so.  And maybe people would respond to those incentives by living healthier lives."

     Seems to me that Caplan has a rather grotesque sense of morality. For him the moral hazard is not letting people die in the streets so someone can save a couple of dollars but treating a sick person without money. That's his sense of morality-those who lack money are not on the moral level of those who have-bizarre morality indeed, I know but it's right here to observe.

    Notice the morally supercilious tone he uses, bad health is not something that just happens to you, it's something that you get for being "bad"-ie, poor. I would have to disagree with his moralist claptrap and say that it often is something that just happens to you, to the rich as well, only they have the blessed "ability to pay."

    The idea that people would respond to incentives to live healthier lives is another example of his strange mindset. You don't think that people already want to live healthy lives-not getting sick or dying is not an incentive? Somehow they will  "do better" with the knowledge that if they don't there will be no healthcare for them if they're poor-where is the incentive for the rich? By allowing insurance companies to "tailor risks to rates"  there's great latitude for abuse. For example as we know that certain blood diseases are more prevalent in African Americans, this would suggest that for Caplan it is acceptable for companies to charge them more for the same coverage-of course many libertarians, like Herman Hoppe, argue exactly that.

    This is the same abysmal logic that we see in people like David Shoup and his campaign against free parking. The libertarian goal is that everything should be subjected to market rates, ignoring the reality of externalities and that some things are public goods and services-or the depression of demand these imply; then again Caplan seems to dislike demand. One such thing is education-while Caplan may well be one who disagrees with this the consensus of the American people for since the end of the 19th century is that it is.

    Health care may well end up here as well. Clumsy advocates for the private insurance companies like Caplan certainly win them no friends by arguing for vicious policies like this.

   "In reality, cost control is simple.  Everyone knows how to do it: Austerity and incentives.  Government needs to spend less, and stop using regulation to discourage frugality.  Alas, these realistic solutions are extremely unpopular.  Gruber is too technocratic to go full populist and say, "We should spend as much as it takes to give the best possible health care to every American."  But in the end, that's the philosophy behind Obamacare: Do whatever it takes to cover everyone, and hope the American public one day sees the wisdom of austerity and incentives"

     In other words if you have money you get healthcare. If you don't drop dead. As for incentives it may be that in the matter of health insurance the private market has all the wrong ones. Ultimately they make money by having healthy people pay for services they don't use. The individual mandate merely applies the implicit logic of private insurance. So it's unfortunate he mentions incentives. As for austerity, we see how well this is serving Europe.