Kevin Drum | Mother Jones

The High Cost of Technology

Ezra Klein quotes Kaiser Permanente CEO George Halvorson on the cost of healthcare:

The point is that CT scans in this country cost a multiple of what everyone else pays. It costs a few hundred dollars in Europe and over $15,000 here. You can't find a place in Europe than costs $15,000. You can't find a place here that costs less than $15,000. Anyone who is looking at the cost of care and is not looking at the unit cost of care is missing the point. ... To have a health care debate in this country that isn't aware of the price differential is not an informed debate.

Hmmm. This doesn't sound quite right. CT scan prices vary depending on the procedure, but in general they seem to range from around one thousand to a few thousand dollars. $15,000 seems like a stretch.

Still, CT scans and MRIs do cost a lot more here than overseas — upwards of 5x as much in some cases. Why is this? I sort of understand why doctors are paid more here and why prescription drugs cost more. But a CT machine is a CT machine. Siemens sells them for the same price in the U.S. as in Europe, don't they? So what accounts for the fantastic cost difference? And why don't insurance companies bargain the price down? This really does seem to be a little more mysterious than high physician salaries and high drug costs."

Internet Speeds and Costs Around the World, Shown Visually - Broadband - Gizmodo

Internet Speeds and Costs Around the World, Shown Visually - Broadband - Gizmodo: "This awesome infographic shows the internet costs and speeds around the world for the top 20 nations in the ITIF Broadband Rankings. Unsurprisingly, we don't compare too well.

Number one is, predictably, Japan, where the average broadband speed is 60mbps and they pay $0.27 per 1mbps. We, in comparison, average 4.8mbps and pay $3.33 per 1mbps, putting us at #15."

Getting ahead of ourselves | Inside Story

Getting ahead of ourselves | Inside Story:
"the most interesting of the report’s findings. According to the authors, the evidence suggests that “increasing the social mix within schools may increase performance of disadvantaged students with neutral or in some cases with positive effects on overall performance. Thus, policies aimed at encouraging such mix in neighbourhoods may, therefore, play a role in mitigating inequalities.” This means that policies to encourage students from a range of backgrounds to attend the same schools (the opposite of much government education policy in Australia over the past decade) will not only improve the performance of the least able students without lowering average performance, but could increase the overall performance of a classroom or a school."

The FY 2010 Defense Authorization

Cato @ Liberty:

Yesterday Congress passed the $680 billion FY 2010Defense Authorization Bill, which authorizes the largest such budget since the end of World War II. ...

The defense bill represents only part of our military spending. The appropriations bill moving through Congress governing veterans affairs, military construction and other agencies totals $133 billion, while the massive Department of Homeland Security budget weighs in at $42.8 billion. This comprises the visible balance of what Americans spend on our national security, loosely defined. Then there is the approximately $16 billion tucked away in the Energy Department’s budget, money dedicated to the care and maintenance of the country’s huge nuclear arsenal.

All told, every man, woman and child in the United States will spend more than $2,700 on these programs and agencies next year. By way of comparison, the average Japanese spends less than $330; the average German about $520; China’s per capita spending is less than $100.

The massive imbalance between what Americans spend on our military, and what others spend, flows directly from our foreign policy. Several decades ago, Washington opted to be the world’s policeman, and has ever since discouraged other countries from spending more on their own defense.

Why it's important to treat all Sept. 11 victims alike. - By Emily Bazelon - Slate Magazine

Emily Bazelon - Slate Magazine:

Nobody argued when Congress offered to set up a fund for the families of the Sept. 11 victims who would agree not to sue in exchange for compensation. Even the Association of Trial Lawyers of America—an entity that rarely cheers for anything that deflects big lawsuits—announced that its members would give free advice to the families who applied to the fund.

But only six months after setting up shop, the fund is stuck. Fewer than 10 of the 3,000-plus eligible families have signed up. Most of the rest are concerned the fund won't treat them fairly and think that they might be better off relying on the courts and tort law to compensate them for their losses. The problem with the fund as it's conceived is that it treats damage awards too much like a court would. The best way for the fund to gain the families' trust—and with it some momentum—is to act less, rather than more, like a court.

The fund currently proposes to give families different awards based on the projected earnings and life expectancy of each victim. This future-earnings principle is the standard basis for calculating damage awards in tort suits, but here it's a wrong turn. The impulse behind this fund wasn't really to compensate the Sept. 11 families for their economic loss—it was to ease, in some way, the massive suffering caused by a national attack. In the currency of suffering, there's no way to compare one family to another. So the fund should give each the same award. Obviously there's no perfect way to decide who's entitled to what here—just as there's no way to justify a federal fund for the Sept. 11 families, when the families of the Oklahoma City and 1993 World Trade Center bombing victims (not to mention Pearl Harbor) got nothing. But if you set aside the goal of universal fairness and assume it's OK for Congress to help the families hurt by this particular attack, then equal awards are a little more just and a little more practical than anything else the fund can do.

As it stands, the Sept. 11 families who sign up are hit with a 30-page application filled with actuarial tables. There's a table for a victim who died leaving a spouse and one child, for example, and another one for a victim with two kids and no spouse. Across the top of the tables are arrayed numbers from $10,000 to $225,000 representing the victim's annual earnings. Along the side are ages from 25 to 65. Using set formulas, the tables work up variables like projected pay raises and tax rates. To arrive at a first estimate for an award, you look at the table that matches the composition of your family after the tragedy and locate the box that corresponds to the age and salary of the person you lost. If you have a child and lost a 45-year-old wife, the government will pay you $828,974 tax-free if she made $30,000 a year. If she made $150,000, you'll get $2,145,697.

Socialized Medicine

Matthew Yglesias: "My understanding is that the post-Soviet collapse had more to do with lifestyle factors (vodka got cheaper) than problems in the health care system. But the point, broadly speaking, would be that the dread U.S.S.R. actually did a perfectly decent job of providing the sort of goods—health care, basic education, subways, nuclear missiles, vast prison camps, satellite launch vehicles—that in most democracies are provided by the state. It did a bad job of providing things like appealing clothing, consumer electronics, popular entertainments, cars, etc. that are generally provided by the private sector."

America, Heal Thyself

Shannon Brownlee: "the United States has the most expensive health care system in the world. We spend nearly twice as much per person as do other developed countries for health outcomes that are no better and in some cases much worse. Moreover, the citizens of most other countries, including Canada and the U.K., who are routinely reviled by opponents of 'socialized' medicine, express greater satisfaction with their health care systems than we do with ours.

All of which adds up to an obvious conclusion to author T. R. Reid: we have a lot to learn from these foreigners. 'We can bring about fundamental change [in our system] by borrowing ideas from foreign models of health care,' he writes. Part analysis, part amusing travelogue, The Healing of America represents an admirable mission, as Reid travels the globe in an effort to understand why our care is so much more expensive—and less effective—compared to that of other countries. Along the way, he takes his bum shoulder, the result of an injury sustained while serving in the military in the 1970s, to a series of doctors and healers in far-flung cities, to illustrate how different caregivers approach the treatment of joint stiffness and pain. Reid may be right that there are lessons to be learned from other systems that could inform the debate we’re now having about the quality and cost of our own health care, but they are not the lessons that are put forth in this book.

In trying to explain the root causes of our astronomically expensive system, Reid falls back on two widely held but inadequate assumptions about what’s driving American health care spending. The first is the price we pay for each medical service compared with prices for the same service in other countries. At each stop in his tour of foreign health care systems, Reid hammers this point home. We learn that an MRI of the head costs $105 in Japan versus anywhere from $1,000 to $1,400 in the U.S. A visit to the orthopedist to look at his shoulder in France costs $34, versus three to four times that in the United States.

Reid is right that we pay more for many individual treatments than do citizens of other countries. But in his relentless litany of price differentials he fails to convey the simple but vital point that costs in medicine, as in any industry, are a function of both price and volume. What also distinguishes us from other countries is the amount of health care we consume, especially of the most expensive kinds of care. We undergo three times more MRI scans than the OECD average. Our doctors prescribe more brand-name
drugs and fewer generics. We undergo more elective surgeries than citizens of France, Switzerland, and Germany. We run to the specialist at the drop of a hat, partly because we have more specialists and fewer primary care physicians. That specialist is often quick to recommend an expensive procedure or surgery when physical therapy, painkillers, or some other, less invasive form of treatment will work just as well or better. Reid’s own story about his aching shoulder illustrates this point. His American doctor immediately recommended a complete shoulder replacement, while every other doctor he saw in other countries suggested he try less draconian remedies first.

Reid’s second explanation for high American health care costs is the mammoth overhead built into our private health insurance market. '[I]nsurance firms … soak up a significant share of the premium dollar to cover the costs of marketing, underwriting, and administration, as well as their profit,' he writes. 'Economists agree that this is about the most expensive possible way to pay for a nation’s health care.'"

Education in Sweden

yglesias:

The world standard for measuring educational achievement is the OECD’s PISA scores...

Nordic countries are often said to be highly homogeneous, which is true of Finland, but Sweden has more immigrants than the United States though of course much less poverty and inequality.

The most noteworthy aspect of Swedish education is a fairly robust school choice system. This is often described in the Anglophone press as involving “vouchers” in that any Swedish parent is entitled to take his or her children out of the state-run schools and put into another school, with the new school assigned the same level of per-pupil funding as a municipal school would have gotten. But these schools are more like what we call “charter schools”—they can’t have exclusive admissions policies and they can’t charge tuition above the value of the per pupil allotment.

The big difference is that many Swedish charters are run by for-profit firms. We’ve had some experiments with that in the U.S. and it hasn’t worked very well. Nobody’s really found a great way of making consistent profits running K-12 schools in America.

It’s not really clear to me, however, if Swedish schools are actually performing at a higher level than ours. If our child poverty level were where Sweden’s is, our kids’ test scores would be way higher. By contrast, in the Netherlands the child poverty rate is much higher than in Sweden—though of course much lower than in the United States—and the test scores are substantially better.