Friday, April 29, 2005

Taking on Paul Krugman

I must not be too swift. Yesterday I take on the Oblingers, who have everyone's attention in the learning technology arena, and today it's Paul Krugman, one of brightest economists of his generation. As an economist I'm a schlub and I know it. But that won't stop me.

Krugman's op-ed piece today in the NY Times is about health care and the demagoguery of the Bush administration on the issue of health insurance. I agree with his position that health insurance should be universal and that there is way too much bureaucracy in that industry. But the rest of his piece is demagoguery of his own - his way to counter the Republicans but in the process inadvertently lose the respect of thinking people everywhere.

Here's what Krugman conveniently ignores in his piece. The issue isn't only about the uninsured. It's also about what the insured get in their coverage. The simple fact is that coverage costs and more coverage costs more. I don't know why Krugman doesn't talk about this, but it is an important issue. It is an issue on the prescription drug side, it is an issue with the intense high end technology used in medical diagnostics, it is an issue with how R&D in health care tend to drive up cost, and it is an issue with the aging of our society and that the elderly disproportionately consume on the health care front.

The fundamental question with coverage is whether it can be limited to keep costs down. When a Canadian of means gets really sick and their health care system can't do anything more for him, does he come down to U.S. to seek treatment he can't get in Canada? When a woman in her 30's is facing pending blindness, has already had four operations which have done little or nothing to prevent further deterioration of her vision, and now she is looking for a fifth operation which the doctors describe as having no better chance than 10% for success, who gets to make the call that this operation is social waste and should be canceled?

I really don't want to be melodramatic about it, but ignoring the coverage issue entirely means Krugman really is as bad as the Republicans. The issue matters for cost and any social contract that involves universal coverage will have to squarely take on the coverage issue. In almost any utilitarian argument that one can make, veil of ignorance or otherwise, coverage will be limited. The woman going blind will not get her operation. My dad, who was a brittle diabetic for the entire time I knew him (he passed away in 1999 at age 86) would not necessarily be able to get a surgery on his pancreatic cancer when at age 85. (OK, that is melodramatic.)

My own view on health care is communistic. By this I mean I favor a system where there is universal coverage and where there are explicitly set out limits to coverage that get defined by an actuarial analysis of health care consumption and where such limits are set to keep the system solvent. Moreover, there is the stipulation that the rich can't go to the marketplace and expand their coverage via their private purchases of health care. (I understand that there will be leakages either through an internal black market for the rich and ill or for an external market of this sort, say in the Bahamas. But if the leakages can be bounded then the core system will provide decent care.) This approach is egalitarian and recognizes there is no free lunch. Further, it allows us to make a social contract of the form - let's with intent reduce the amount we as a society spend on health care so we can spend more on education, particularly education early in the life cycle. I believe we are spending too much on senior citizens and that is only going to get worse as the society in general gets older. We should change that. (I'm 50 now and my kids are in 5th and 7th grade. I wonder if I'll still feel this way when they have graduated from college and I'm "ready to retire.")

Krugman, in contrast, offers the free lunch - go to universal coverage so as to expand health care to those who are not currently working and to the working poor, and the bureaucratic bloat that is eliminated will pay for it all and then some. None of the other health care issues matter, such as the hyperinflation in health care insurance costs. Give me a break. Krugman, you are a John Bates Clark Award winner and a potential Nobel Prize awardee. We deserve more from you.

Why am I so infuriated with Krugman? And why talk about health care in a blog that is supposed to focus on learning technology? Here is why. The crisis in health care cost is perhaps 30 years old. There has been substantial reform in the way health care is provided to address the cost. issue. Most of this falls under the umbrella "HMO" (some but not all of the reform has been for the good). We should have a mature view of the health care issues and hence there should be some lessons to learn from health care as we work through the crisis in higher education costs. So I'm looking for useful parallels because we haven't yet had the time to work through a mature view on the higher education issues.

And too, I'm being cast in the role of Darth Vader. The smart classrooms are a perfect example. Historically we've taken the large lecture halls and made them into fully featured smart classrooms. Most of our smaller classrooms don't have modern presentation technology (an analog to the no health insurance problem). We get pushed by the instructors to put more and better technology into the classrooms. (The same way doctors keep writing those expensive prescriptions.) But the activity itself has never been funded to include recurrent replacement or refreshment of the equipment. And now we're going to hit a wall because of the general budget situation. The communistic approach I embrace for the health insurance area follows in large part because that is the approach I see we must follow in the classrooms. And in the smart classrooms the analog to limits in insurance coverage will be harsh, because we are severely underfunded. So I've got to come up with some brutal cuts in service.

Being Darth Vader is no fun. I certainly didn't set out to play this role. In a very real sense I'm just the messenger. But I will be blamed when we implement the cuts and yet I will advocate for the cuts as the most sensible thing to do under the circumstances. What is the alternative? Krugman, you could do a lot of social good preaching in your column that there is no free lunch. But instead you give us pablum. I could scream.

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