Health Care BS

Today promises much toil for a blogger dedicated to cleaning the Augean Stables of the health care reform dabate. I guess a good place to begin shoveling is the steaming pile of BS deposited by David Cutler and Brad DeLong in the WSJ.

An important part of their argument for the superiority of Barack Obama’s health care plan involves the claim that Obama will cure U.S. health care through the miracle drug of “modernization,” a euphemism for an extremely expensive health care IT mandate:

One-third of medical costs go for services at best ineffective and at worst harmful. Fifty billion dollars will jump-start the long-overdue information revolution in health care to identify the best providers, treatments and patient management strategies.

The obvious implication here is that, though the taxpayers will have to cough up a small investment of $50 billion, the efficiency associated with ”modernization” will save them a lot more than this in the long haul. But this canard has been repeatedly debunked. Per FactCheck.org:

Obama says his health care plan will garner large savings – $120 billion a year, or $2,500 per family – with more than half coming from the use of electronic health records. And he says he’ll make that happen in his first term. We find his statements to be overly optimistic, misleading and, to some extent, contradicted by one of his own advisers. And it masks the true cost of his plan to cover millions of Americans who now have no health insurance.

And the “true cost” of the Obama plan will be stupendous. A couple of months ago, I linked to a piece in the NYT that spelled this out in no uncertain terms. Kenneth Sack wrote the following about the combination of tax credits and subsidies that Obama’s plan envisions:

The subsidies are expensive, estimated at well over $100 billion. Other components of the Obama plan also bear up-front costs, like a pledge to spend $50 billion over five years to speed the computerization of health records, $6 billion a year on tax credits to small businesses that provide coverage to workers, and an unspecified amount to buffer businesses from high-cost insurance claims.

Their WSJ piece covers much more than “modernization” and health care IT, of course. But if you take the time to dig through the BS, Cutler and DeLong are touting a plan that makes hopelessly implausible assumptions. It is not better than McCain’s free-market approach. It is, in fact, far worse.

[HT Economist’s View]