Tuesday, June 20, 2017

Factual truths, substantive lies

The Washington Post is trying to scare you away from supporting single-payer health insurance.

First, they claim that "it would raise government spending by $32 trillion over 10 years."

Second, they go for the old "government is inefficient canard:
The public piece of the American health-care system has not proven itself to be particularly cost-efficient. On a per capita basis, U.S. government health programs alone spend more than Canada, Australia, France and Britain each do on their entire health systems. That means the U.S. government spends more per American to cover a slice of the population than other governments spend per citizen to cover all of theirs.
My colleague Jason Antrosio got into the comments section and pointed out two of the three flaws with this pair of "arguments," if that's what they deserve to be called.

On the second point, the Post's statement is factually true, yet misleading enough to be a sort of lie in substance. As Jason observes, the populations covered by Medicare and Medicaid are more expensive than average (old people and people with lower incomes).

In addition to people needing more medical care as they age, they're more likely to need care that comes under the term "long-term services and supports" (LTSS), of which the most familiar part is nursing-home care. That stuff is really expensive, with the average cost of a nursing facility being over $91,000 per patient per year (here, scroll down to Figure 2). The government covers 72% of the cost of LTSS, with most of that coming under Medicaid (same source, scroll down to Figure 3).

So here's the core of what's factually true in the Post's statement: in 2015 the average expenditure by private health insurance companies per person covered was $5,434, while the comparable number for Medicare and Medicaid was $9,638. (See note 1 below; the data are from Table 21 available within the zip folder "NHE tables" at the National Health Expenditure Data site of the Center for Medicare and Medicaid Services).

Beyond the logic of noting that these two programs cover inherently expensive people, and inherently expensive services like nursing homes, there's a data-based indication that the problem is not some ineradicable inefficiency of government. Because in addition to covering expensive populations through Medicare and Medicaid, the government also covers a relatively inexpensive population through CHIP, the Children's Health Insurance Program. The cost there is $2,417 per covered child.

When you fold CHIP coverage in with Medicare and Medicaid, the overall cost per enrollee is $9,298, which is a lot more than the $5,434 per enrollee in private insurance.

The takeaway: give the government an expensive population to insure, and their costs will be high; give them an inexpensive population, and their costs will be low. Government in the U.S. takes on the burden of covering the most expensive individuals within society. Combine that with a generally expensive health-care system, and it's hardly surprising that it costs more per capita than the cost of covering the population as a whole in countries with broader systems.

The Post uses this as "evidence" that government-run health insurance in the U.S. is fundamentally inefficient. That's a substantive lie, even if it's cleverly phrased in terms that are factually true.

On to WaPo's first point, about $32 trillion increased government expenditure over 10 years. Jason gets at the heart of the problem with this claim:
the figure of 32 trillion over ten years, even if it is completely correct, needs to be counterbalanced by the total cost people and corporations are currently paying for insurance. If the money currently spent on insurance is shifted to a government-administered single-payer insurance, it will most likely be a roughly equal amount.
Evidence for Jason's point is in the same Urban Institute report that the Post cited: overall health expenditure would go up by $6.6 trillion over 10 years (see p. 6). That's a lot of money, but it's also a lot less money than $32 trillion. The difference is exactly the kind of shifts that Jason pointed to: government spends more, while private actors spend less.

To focus on increased government expenditure without mentioning offsetting private savings is another case of a factual truth being a substantive lie, so the Post is 2-for-2 on that tactic.

But in this case, the Post has left out one crucial word that turns their statement into a factual lie, not just a substantive one. Because the increase of $32 trillion is only the federal government (specified on p. 6 of the Urban Institute's report). Meanwhile, state and local governments save $4.1 trillion (see p. 7).

The interesting question at that point is, Who came up with these argument? Did the WaPo editorial board think them up on its own? Or did some interested party pitch them, and the editors at the Post were too gullible to see through it?

Jason saw through it right away, and while he's a smart guy and a well-informed citizen, I don't think he'd consider himself an expert on health insurance. Doesn't WaPo have smart people they can talk to so they don't get blamfoozled like this? Assuming that's what's going on.

Note 1: Within that figure of $9,638 for Medicare and Medicaid combined, it was $11,904 per person in Medicare and $7,869 per person in Medicaid; the combined number isn't the simple average of those two figures, because it has to take into account that Medicaid covers more people than Medicare, so the combined figure ends up close to the Medicaid average.

1 comment:

  1. Many thanks for writing this. You may check out the new Op-Ed in the Washington Post called The dumbest criticism of single payer health care by Paul Waldman. I've posted a comment to try and direct readers back to your analysis. Maybe it works.