Tag: United States

Review: Priced Out

Review: Priced Out

Priced Out: The Economic and Ethical Costs of American Health Care by Uwe Reinhardt

My rating: 4 of 5 stars

Mantras about the virtues of markets are no substitute for serious ethical convictions.

There are a great many things for Americans to feel embarrassed about. Depending on your politics, you may bemoan the rise of identity politics and the snowflake culture predominating on college campuses; or perhaps you rage against racist policing or our lax gun laws. But I think that, as Americans, we can all come together and feel a deep and lasting shame over our health care system—specifically, how we finance it. According to Reinhardt, our system is so bad that it is routinely invoked in international conferences as a kind of boogey man, an example of what to avoid. And after reading this book, it is easy to see why.

I did not suspect that our system was quite so bad until I left the country. But, in retrospect, the evidence was quite apparent. Virtually all of my friends have expressed anxiety about their health care at some point—high premiums, high deductibles, or simply no health insurance at all. I have seen family members spend weeks negotiating with insurance companies for payment of their medicines (and even after the insurance chips in, the cost is still breathtaking). Meanwhile, in my five years here, I have yet to hear a single Spaniard express anxiety over how they will pay for a medicine or a medical procedure. Here, as in most of Europe, this type of anxiety is quite uncommon.

The U.S. system fails on many different fronts. Most simply, there is coverage. Millions of Americans have no coverage, and millions more have inadequate coverage (such as many of my friends, whose deductibles are so high that they may as well not have insurance). Second is cost. Both medical procedures and medicines are significantly more expensive in the United States. For example, the drug Xarelto (for blood clots) costs $101 in Spain, $292 in the U.S. The average cost of an appendectomy is $2,003 in Spain, $15,930 in America. A third failure— closely related to cost—is waste. Our byzantine payment system requires doctors and hospitals to spend great amounts of time and money communicating with insurance companies, which of course costs money, which of course gets transferred to the consumer.

But most fundamental failure is a failure of ethics. Or perhaps it is better to say a lack of ethical vision. As Reinhardt explains, while much of the debate on health care in America concerns itself with technicalities—risk pools, risk exposure, whether premiums should be actuarially fair or community-rated, etc.—this debate conceals the fact that we have yet to come to a consensus on the moral foundations of health care. Most of the world’s developed nations have established their systems on the presumption that health care is a social good. In the United States, on the other hand, we are sort of muddled, at times treating health care as if it is a commodity, and yet unwilling to face up to the implications of that choice—such as letting poor people die without treatment.

Aside from the ethical issues involved, health care has many features that make it unlike a typical commodity, and thus poorly governed by supply-and-demand. If I want to buy a car, for example, typically I am not in a great rush to do so. I can shop around, test-drive cars, compare prices across companies and locations, and read reviews. I can even decide that I do not want to buy a car after all, and instead buy a train pass. All of this contributes to control the price of cars, and incentivizes car companies to give us the best value for our money.

None of this is the case in our health care system. The demand is non-negotiable and, very often, time-sensitive. Furthermore, most patients lack the knowledge needed to evaluate what procedures or tests are justified or not, so oftentimes we cannot even be fully aware of our own ‘demand.’ Besides that, we have no ability to compare prices or to compare treatment efficacy. And even if we are careful to go to a hospital in our insurance network, there may be doctors ‘out of network’ working there, leading to the ugly phenomenon of surprise medical bills.

Added together, it is as if the car salesman blindfolded me, put a gun to my head, told me I had to choose a car in five minutes, while he was the only source of information about what car I needed (and medical bills can be quite as expensive as cars!). This is the position of the American “consumer” of healthcare.

My own brief experience with emergency medical care highlights the situation. The only time that I have ever been taken to an emergency room, I was unconscious. I woke up after being transported by the ambulance. Luckily, I was quickly discharged, and I also had insurance. But even though my insurance covered the hospital bill, it did not cover the ambulance, which I had to pay out of pocket. Again, I was lucky, since I was able to afford it. Many cannot, however, and have the experience of waking up from an accident, an injury, or an operation in debt. How can you be an intelligent consumer when you are unconscious?

The helplessness of the consumer creates a perverse incentive in our system. There is little downward pressure on prices. Instead, what results is a kind of arms race between health care providers and insurers. Insurers are incentivized to put up as many barriers as possible to paying out, which requires doctors and hospitals to invest ever-more resources into their billing departments, which of course only increases the cost to the patient. In many hospitals, there are more billing clerks than hospital beds; and when you realize that these billing clerks have their own counterparts in the insurance companies, you can get some idea of the enormous bloat created by our financing system.

I think there is a particular irony to this situation, since our American insistence on market values has created a labyrinthine network of incomprehensible rules, endless paperwork, and legions of bureaucrats—the very thing that capitalist principles were supposed to eliminate. Indeed, ironies abound in our system. For example, we endlessly discuss the affordability of government programs, while the tax incentives for employment-based insurance (which costs the federal and state governments an annual $300 billion in foregone revenues) is never mentioned. What is more, while the insurance mandates of Obamacare were roundly criticized as forcing the healthy to subsidize the unhealthy, as Reinhardt points out, the exact same thing occurs in insurance-based healthcare. And as a final irony:

It is fair to ask why, if socialized medicine is so bad, Americans for almost a century now have preserved precisely that construct for their military Veterans, and, indeed, why the latter are so defensive and protective of that socialized medicine system.

After reading this review, you may be excused for thinking that this book is a fiery manifesto about the evils of the system. Far from it. Uwe Reinhardt was a prominent economist and much of this book consists of tables and graphs. The writing is, if anything, on the dry side, and the tone is one of intellectual criticism rather than passionate outrage. Yet, strangely, this is why I found the book so effective. It is one thing for an arm-swinging socialist to condemn the evils of the system, but quite another for a calm economist to go through the data, point by point, and explain how it all works and how it compares with other countries’ performance.

You may also be excused for thinking that, given all this, Reinhardt would be an advocate for a single-payer system in the United States. After all, he was one of the architects of Taiwan’s single-payer system, which costs about 6% of the country’s GDP. (For comparison, America’s system costs us 17% of GDP!) But Reinhardt thinks that such a system would not work on American soil. For one, the libertarian streak in our culture runs too deep for such a system to be broadly acceptable. More importantly, however, Reinhardt thinks that our campaign finance system is so corrupt that the health care lobby would be able to exert a heavy influence on the government, thus canceling the benefit.

He instead advocates for an ‘all-payer’ system. The idea is to consolidate the market power of consumers by having standard prices set either by the government, or by associations of care providers and insurers. This would, at the very least, avoid the wild price variability that can be found in even a single city in the United States. It also helps to bring costs down, as demonstrated in Maryland, which has had an all-payer system for quite a while. Japan’s system is also established on this principle, and spends far less money per capita on its health care system, despite having a significantly older population than the United States.

In normal times, I was not exactly optimistic about the prospect of reforming our broken health care system. But in the wake of this pandemic, it does seem as if major reforms might not only be possible, but inevitable. Employment-based insurance makes little sense if people lose their jobs during a major health crisis, as has already happened to many millions of Americans. And high unemployment may persist for some time. What is more, a major health crisis, resulting in many thousands of additional hospital stays, will put pressure on private insurance firms and lead to a significant rise in insurance premiums. Basically, higher-risk patients create higher cost, and a pandemic puts far more people into the high-risk category. The greater strain on an already teetering system may be the proverbial straw on the camel’s back. We shall see.

View all my reviews

Review: The World at War

Review: The World at War

The World At WarThe World At War by Mark Arnold-Forster

My rating: 5 of 5 stars

Consisting of 26 episodes, each about 50 minutes long, The World at War traces the history of the Second World War from its pre-War beginnings to its aftermath. The program is remarkable in scope, covering the relevant political history of the United States, England, Germany, and Japan; the war efforts in north Africa and southeast Asia; the Russian and the Western front, as well as the final push against Japan; the bombing campaigns and their effects on civilian life; the struggle of the Allied shipping fleet against the German U-boats; the final peace negotiations in Europe and Asia, and the concomitant haggling between the U.S.S.R. and the West; the horrors of the Holocaust; and much else.

But the series has depth as well as breadth. There are hours and hours of archival footage—of battles, bombings, bombardments, protests, speeches, life on the front line, civilian life, negotiations, military parades, invasions, celebrations, triumphs, massacres, tragedies—much of it never used before, unearthed by the program’s research team.

Even more impressively, there are hours of interview footage, from from Poles, Russians, French, Germans, English, Americans, Japanese. There are interviews of gunners, tank crew, infantrymen, sailors, pilots; interviews of housewives, firefighters, barmen, taxi drivers; as well as from politicians, advisors, generals, and even Hitler’s personal secretary and chauffeur. Considering that these interviews were made specifically for the series, from people directly involved in the action, this makes the raw footage (most of it unused) a valuable primary historical document. And this is not to mention the wonderful narration by Laurence Olivier, which is always tasteful, often moving, and sometimes chilling.

In short, the documentary is a masterpiece, bringing the drama of the war to life while also being supremely informative. If you want to watch any documentary about World War II, make it this one.

To speak personally, watching this documentary had a strange effect on me, because it made me realize how much my perspective has changed since I was a kid. Back then, I used to watch World War II documentaries because the war seemed like a comic book. It was a story with clear bad guys and good guys, and the good guys won in the end. It was a story of personal heroism and bravery, of self-sacrifice and honor, of hardships endured and battles fought for the greater good. I was even fascinated with the military technology, the tanks, war planes, battleships, and guns. I remember going to the military museum at West Point, and seeing replicas of the nuclear bombs used on Hiroshima and Nagasaki. There was something undeniably awe-inspiring about the ability to create so much destruction, to wield so much power.

This time around, I had a different reaction. The more I watched, the more I became overwhelmed with a sense of pointless loss, destruction, and violence. Millions of young men marching off to shoot other young men, and for what? Towns blown to pieces, cities burned to the ground, and, most of all, countless lives lost. People shot, stabbed, drowned, burned; people executed by firing squad, hanging, the gas chamber. Beaches filled with bloated bodies, corpses rotting in the road, the remains grandmothers and children buried under piles of rubble. And it just kept going, the planes kept dropping bombs, the men kept throwing grenades, the tanks kept rolling on. By the end of the series, every episode made me feel sick.

When you see the numbers of the dead, it’s easy to grow numb. The totals become mere, meaningless statistics. But when you realize that those millions were composed of individuals, people with their own favorite song to whistle, shade of blue, local restaurant, people with their own quirks of personality, their own flaws and virtues, people who were loved and who loved in return, people who might have done anything had they survived the war, the enormity of the tragedy dawns on you. No matter what the aggressors hoped to gain from the war, no matter how glorious it seemed, it could not have been worth it.

The documentary does not shy away from the horrors of war, but dwells on them, and for good reason. For if there is any lesson to be learned from World War II, it is simply this: We must do everything in our power to avoid repeating that catastrophe.

View all my reviews

Review: Democracy in America

Review: Democracy in America

Democracy in America Democracy in America by Alexis de Tocqueville

My rating: 5 of 5 stars

I struggle to penetrate God’s point of view, from which vantage point I try to observe and judge human affairs.

A few months ago, bored at work and with no other obligations to tie me to New York, I decided that I would look into employment in Europe; and now, several months and an irksome visa process later, I am on the verge of setting off to Madrid. Unsurprisingly, I’m very excited to go; but of course leaving one’s home is always bittersweet. This is partly why I picked up Tocqueville’s Democracy in America, as a sort of literary good-bye kiss to this odd, uncouth, chaotic, and fantastic place which has, up until now, molded my character, sustained my body, and contained my thoughts.

This turned out to be an excellent choice, for this book is without a doubt the best book ever written on the United States. I am able to say this, even though I haven’t even read a fraction of the books written on this country, because I simply can’t imagine how anyone could have done it better. As it is, I can hardly believe that Tocqueville could understand so much in the short span of his life; and when I recall that he wrote this book after only 9 months in America, while he was still in his thirties, I am doubly astounded. This seems scarcely human.

Part of the reason for his seemingly miraculous ability is that, with Tocqueville, you find two things conjoined which are normally encountered separately: extremely keen powers of observation, and a forceful analytic mind. With most travel writers, you encounter only the former; and with most political philosophers, only the latter. The product of this combination is a nearly perfect marriage of facts and reasoning, of survey and criticism, the ideas always hovering just above the reality, transforming the apparently senseless fabric of society into a sensible and intelligible whole. Almost everything he sees, he understands; and not only does he understand what he sees, but so often hits upon the why.

Although this book covers an enormous amount of ground—religion, slavery, culture, government, the role of women, just to name a few topics—there is one central question that runs through every subject: What does the appearance of democracy mean for the future of humanity? Tocqueville sees this question as the most pressing and significant one of his time; for, as he perceived, what was happening then in America was destined to inspire Europe and perhaps the whole world to adopt this new form of government, which would forever change the face of society. In short, Tocqueville is seeking to understand America so that he could understand the future; and the plan of the book follows these two goals successively. The first volume, published in 1835, is a thorough analysis of the United States; and the second volume, published in 1840, is a comparison of democracy and aristocracy, an attempt to pinpoint how a switch to a democratic government causes far-reaching changes in the whole culture.

Tocqueville is famously ambivalent about American democracy. He often sounds greatly impressed at what he finds, noting how hardworking and self-reliant are most Americans; and yet so often, particularly in the second volume, Tocqueville sounds gloomy and pessimistic about what the future holds. Much of his analysis is centered on the idea of social equality. He often reminds the reader—and by the way, Tocqueville wrote this for a French audience—that Americans, rich or poor, famous or obscure, will treat everyone as an equal. The entire idea of castes or classes has, in Tocqueville’s opinion, been abolished; and this has had many effects. Most obviously, it gives free reign to American ambition, for anyone can potentially climb from the bottom to the top; thus results the ceaseless activity and endless financial scheming of Americans. And even those who are quite well-off are not spared from this fever of ambition, for the lack of inherited wealth and stable fortunes means that the rich must continually exert effort to maintain their fortunes. (Whether this is true anymore is another story.)

Thus we find a kind of money-obsession, where everyone must constantly keep their minds in their wallets. In America, money is not only real currency, but cultural currency as well, a marker of success; and in this context, the creature comforts of life, which after all only money can buy, are elevated to great importance. Rich food, warm beds, spacious houses—these are praised above the simpler pleasures in life, such as agreeable conversation or pleasant walks on sunny days, as the former require money while the latter are free and available to anyone. The central irony of a classless society is that it forces everyone to focus constantly on their status, as it is always in jeopardy. You can imagine how shocking this must have been for Tocqueville, the son of an aristocratic family. There simply was no class of Americans who had the leisure of retiring from the cares of the world and contemplating the “higher” but less practical things in life. All thought was consumed in activity.

This results in a society of the ordinary individual. In America, there are few “great men” (as Tocqueville would say) but a great many good ones. Americans are self-reliant, but not daring; they are often decent, but never saintly. They will sometimes risk their lives in pursuit of a fortune, but never their fortunes for the sake their lives. An American might temporarily accept hardship if there is a financial reward on the other end; but how many Americans would forsake their fortunes, their comforts, their houses and property, for the sake of an idea, a principle, a dream? Thus a kind of narrow ambition pervades the society, where everyone is hoping to better their lot, but almost nobody is hoping to do something beyond acquiring money and things. One can easily imagine the young Tocqueville, his mind filled with Machiavelli and Montesquieu, meeting American after American with no time or inclination for something as intangible as knowledge.

In the midst of his large-scale cultural analysis, Tocqueville sometimes pauses for a time, putting off the role of philosopher to take up the role of prophet. Tocqueville does get many of his predictions wrong. For example, he did not at all foresee the Civil War—and in fact he thought Americans would never willingly risk their property fighting each other—and instead he thought that there would be a gigantic race war between blacks and whites in the south. But Tocqueville was otherwise quite right about race relations in the slave-owning states. He predicts that slavery could not possibly last, and that it would soon be abolished; and he notes that abolishing slavery will probably be the easiest task in improving the relationship between blacks and whites. For although slavery can be destroyed through legal action, the effects of slavery, the deep-rooted racial prejudice and hatred, cannot so easily be wiped clean. In support of this view, Tocqueville notes how badly treated are free blacks in the northern states, where slavery is banned. Without a place in society, they are shunned and fall into poverty. The persistence of the color line in America is a testament to Tocqueville’s genius and our failure to prove him wrong.

But perhaps the most arresting prediction Tocqueville makes is about the future rivalry of the United States with Russia. Here are his words:

Americans struggle against obstacles placed there by nature; Russians are in conflict with men. The former fight the wilderness and barbarity; the latter, civilization with all its weaponry: thus, American victories are achieved with the plowshare, Russia’s with the soldier’s sword.

To achieve their aim, the former rely upon self-interest and allow free scope to the unguided strength and common sense of individuals.

The latter focus the whole power of society upon a single man.

The former deploy freedom as their main mode of action; the latter, slavish obedience.

The point of departure is different, their paths are diverse but each of them seems destined by some secret providential design to hold in their hands the fate of half the world at some date in the future.

While discussing such an obviously brilliant man as was Tocqueville, whose ideas have become foundational in the study of American society, it seems almost petty to praise his prose style. But I would be doing an injustice to any readers of this review if I failed to mention that Tocqueville is an extraordinary writer. I was consistently captivated by his ability to sum up his thoughts into crisp aphorisms and to compress his analyses into perfectly composed paragraphs. I can only imagine how much better it is in the original French. Here is only a brief example:

Commerce is a natural opponent of all violent passions. It likes moderation, delights in compromise, carefully avoid angry outbursts. It is patient, flexible, subtle, and has recourse to extreme measures only when absolute necessity obliges it to do so. Commerce makes men independent of each other, gives them quite another idea of their personal value, persuades them to manage their own affairs, and teaches them to be successful. Hence it inclines them to liberty but draws them away from revolutions.

In the brief space of a book review—even a long one—I cannot hope to do justice to such a wide-ranging, carefully argued, and incisive book as this. So I hope that I have managed to persuade you to at least add this work to your to-read list, long as it may be already. For my part, I can’t imagine a better book to have read as I prepare myself to visit a new continent, about the same age as was Tocqueville when he visited these shores, for my own travels in a strange place. And although, lowly American that I am, I cannot hope to achieve even a fraction of what Tocqueville has, perhaps his voice echoing in my ears will be enough to encourage me to look, to listen, and to understand.

View all my reviews