Mark Thoma Is Unhappy with Greg Mankiw...

Mark Thoma http://economistsview.typepad.com/economistsview/2007/11/mankiw-beyond-t.html tells us that Mankiw's latest on health care might raise an eyebrow or two... http://www.iht.com/articles/2007/11/02/business/wbcolumn03.php:

"Beyond those health care numbers." By N. Gregory Mankiw. Saturday, November 3, 2007: Here are three true but misleading facts about health care that politicians and pundits in the United States love to use to frighten the public. The United States has lower life expectancy and higher infant mortality than Canada, which has national health insurance.

The differences are indeed significant. Life expectancy at birth is 2.6 years greater for Canadian men than for American men. Among women, Canadians outlive Americans by 2.3 years. Infant mortality in the United States is 6.8 per 1,000 live births, compared with only 5.3 in Canada. These facts are often taken as evidence for the inadequacy of the U.S. health system. But a recent study by June and Dave O'Neill, economists at Baruch College, from whom these numbers come, shows that the difference in health outcomes has more to do with broader social forces....

Americans are more likely than Canadians to die by accident or by homicide... these differences... teach nothing about the U.S. system of health care. Americans are also more likely to be obese, leading to heart disease and other medical problems... attributable to its ability to supply high-calorie foods inexpensively. Infant mortality rates also reflect... the prevalence of infants with low birth weight... correlated with teenage motherhood. Whatever its merits, a Canadian-style system of national health insurance is unlikely to change the sexual mores of American youths....

[T]he 47 million includes about 10 million residents... illegal immigrants.... The number also fails to take full account of Medicaid... millions of the poor who are eligible for Medicaid but have not yet applied. These... are uninsured in name only. The 47 million also includes many who could buy insurance... 18 million of the uninsured have an annual [family] income of more than $50,000....

In 1950, Americans spent about 5 percent of their income on health care. Today the share is about 16 percent. Many pundits take the increasing cost as evidence that the system is too expensive. But increasing expenditures could just as well be a symptom of success.... [I]ncomes are growing, and it makes sense to spend this growing prosperity on better health.... Those looking at reform plans should be careful not to be fooled by statistics into thinking that problems are worse than they really are...

Mark understates things.

Does Canada lack an ability to supply high-calorie foods inexpensively?

Low-birthweight babies are due to the failure to push prenatal care as well as to teenage motherhood, which is itself more the result of a failure to push birth control information and technologies than the "sexual mores of American youths."

The millions of the poor who are eligible but not enrolled in Medicaid will be signed up when they show up at the emergency room, but they are not getting the care that might keep them from winding up at the emergency room.

But the thing that should have led the article to be sent back for a rewrite is a very relevant fact that is somehow omitted. In 2003 the U.S. spent $5711 per capita on health care, while Canada spent $2998 http://www.oecd.org/health/healthdata; it's not just that the U.S. has worth health status outcomes than Canada; it's that we proportionally spend $800 billion a year more than Canada does, and yet in aggregate and overall have less than nothing to show from it.

Readers should not be fooled by the omission of relevant statistics into thinking that problems are not as serious as they really are.

Somebody in the New York Times editorial staff should have questioned this before they ran it. Shame on them.

Comments

[James Davis Nicoll]

Technically speaking, Canada doesn't have a "national health insurance". We have 13 provincial and territorial health insurance programs, as mandated by the Canada Health Act. Each program is run differently.

Heck, I'm lazy: some of the details were covered by Snopes:

http://www.snopes.com/politics/medical/canada.asp

[Unstable Isotope]

That post by Mankiw is very dishonest. Why do conservatives always try to cherry-pick health care statistics. The truth is that the U.S. lags the industrialized world in most measures of health, despite paying more per person for health care. Why do we not discuss why we spend so much more per person yet get worse outcomes?

Another thing that bothers me is conservatives pretend there is only one alternative health care system - we either have ours or Canada's or Britian's, etc. Why don't they believe that we can learn from the inefficiencies of other countries to come up with something better?

[dug]

See my comment over at Mark Thoma's about the Swiss health care system. It is the second-most expensive as a %GDP. It has a share of private expenditure as opposed to public that is not that different to the US. But we still pay less and get better results on almost every dimension. Infant mortality is lower; life expectancy is higher; more doctors and nurses per 1000 residents etc. Basic insurance is obligatory, but insurance companies are not allowed to refuse you. Basic insurance is actually cheaper than the very basic plans that the Americans described in that thread.

Public health care is clearly more efficient, but even with a private system, the US could do so much better than it is.

@ Isotype: what is there to learn from other countries' inefficiencies? Nobody can beat the inefficiency in the US health care system.

[Steve J.]

Mankiw asserts that the major difference is due to Americans greater chance of death by homicide or accident but that doesn't account for the fact that Canadians live longer than Americans, given that they reach the ages of 65-69. Canadians average 19.6 more years, Americans only 18.7

http://radamisto.blogspot.com/2007/10/life-expectancy-from-age-65-69.html

[Platypus]

One of the interesting things about Mankiw's article is what he, and presumably other mainstream Republicans, are willing to concede: The US spends twice as much as Canada on healthcare to get almost as good a result, yet still leaves millions of its citizens without health insurance (a major contributor to personal bankruptcy in the States but not Canada.) His willingness to stipulate these facts at the beginning of the debate should make the fight for health care reform that much easier.

[Doctor Jay]

I support some form of universal health care, and I don't think our health dollars are spent wisely, AND I also think that we have cultural differences from Canada that are unhealthy. It's not that the Canadians can't provide high-calorie foods efficiently, it's that they (1) don't buy as much, (2) get more exercise, (3) have a very different demographic, which since body weight is determined within about 20 pounds by genetics, is going to result in a less "obese" population.

There's lots of financial incentives under our system to develop better treatments, make them cheaper, faster, better. But there is no incentive for anyone, to convince me to avoid the problems that made me need the treatment in the first place.

You would think that the insurance companies would have this incentive, but they view it as saving money for my next insurer, not them.

[John Emerson]

OK, Mankiw is a liar. Will he still get his Nobel Prize eventually?

[save_the_rustbelt]

Allow me to express a beef about economists.

Despite a lack of any discernable credentials or healthcare expertise, economists such as Krugman and Mankiw regularly make sweeping statements about US healthcare.

I understand the columnist role is different from the academic and scholarly role, but economists use their academic credentials to get the columnist gigs.

And yes I understand that analysis and analytical skills are transferable and yada, yada.

I think Mankiw is talking like an expert about a topic on which he is not.

[save_the_rustbelt]

Allow me to express a beef about economists.

Despite a lack of any discernable credentials or healthcare expertise, economists such as Krugman and Mankiw regularly make sweeping statements about US healthcare.

I understand the columnist role is different from the academic and scholarly role, but economists use their academic credentials to get the columnist gigs.

And yes I understand that analysis and analytical skills are transferable and yada, yada.

I think Mankiw is talking like an expert about a topic on which he is not.

[pgl]

Brad - no blame for Greg? He wrote it and I suspect the NYTimes decided to respect the wisdom of a prominent Harvard economist. Of course Greg's forte is macroeconomics not health economics. If the NYTimes called me to write on health care economists, I'd tell them my Ph.D. in economics does not make me an expert on a field that I have not studied.

[Robert Waldmann]

Actually I think teen age pregnancy has a small effect on infant mortality. It is easy to find the raw correlation which is, indeed, that infants of teenagers are more likely to die, but teenage mothers are poorer and less likely to get prenatal care than older mothers. When on controls for race, income and medical care (I think self reported) the teenage effect becomes small (on the order of 10% of the baseline risk) see

Arlene Geronimus. 1987. On teenage childbearing and neonatal mortality in the United States. Population & Development Review 13(2):323-334.

Basically, the factor stressed by Mankiw turns out to be less important than the ones he claims are not critical when they go head to head in a regression.

You are, of course, correct that difference across developed countries in teenage fertility are not explained by differences in sexual activity (which are small : median age of first intercourse is around 16 everywhere) but rather in contraceptive use.

Of course you are much more expert than Mankiw on the first topic you discuss (sorry I really really couldn't resist)

More generally, Mankiw seems to be blaming the uninsured for their lack of insurance. Odd that he is opposed to mandating insurance given that view.

[sm]

There are plenty of fat Canadians and Canadians invented poutine: french fries topped with both cheese curds and gravy.

[Charles]

Stress is almost certainly a major factor in obesity. Stress caused in part by... lack of health insurance.

[allan_in_upstate]

"Somebody in the New York Times editorial staff should have questioned this before they ran it. Shame on them."

Somebody at Harvard University should have questioned this
before they granted him tenure.

[elliottg]

If Prescott can win a Nobel then nothing precludes Mankiw from winning one.

What's worse is he still gets to write NY Times op eds, collect royalties on his textbook, and call himself a Harvard professor. Of course, that is economically as it should be since it is trivial to prove that being willing to lie yields greater rewards than always telling the truth. It's unclear to me whether Mankiw is doing his cost/benefit analysis correctly though now that it appears that he is lying so transparently for no obvious gain. Maybe he is so rich and secure in his tenure at this point that any pretense of honesty offers no marginal utility while he perceives signalling his unabashed Republicanism has some value in future policy-making circles.

[Winston]

"In 1950, Americans spent about 5 percent of their income on health care. Today the share is about 16 percent. . . . The reason Americans spend more than their grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes. Medical science has consistently found new ways to extend and improve lives. Wonderful as they are, they do not come cheap."

Mankiw is attacking a straw man. Pundits are mostly complaining about the high cost of health care relative to other countries with similarly advanced medical technology and better health outcomes, not relative to 1950s America.

In any case, if the reasons for the growth in health care expenditures since the 1950s are advances in medical technology and growth in incomes, then why aren't we Canadians also spending 11 percent more on health care?

It seems that Mankiw is doing everything he can to ignore the conclusions of experts in the industrial organization of health care.

[Scott Martens]

"It's not that the Canadians can't provide high-calorie foods efficiently, it's that they (1) don't buy as much, (2) get more exercise, (3) have a very different demographic, which since body weight is determined within about 20 pounds by genetics, is going to result in a less "obese" population."

Um... I can't cough up statistics but, my experience as a Canadian is that we eat at least as much crap, we drive more and walk less (it's **cold** in winter) and that Canada has roughly the same proportion of people of European origin as the US, and more of them are Eastern European - which at least anecdotally means tends *more* to fat - and and more of them are Native American - who demonstrably tend to eat more crap and tend to be fat. The Asian population of Canada may be larger than the US, and the population of African origin smaller, but somehow I don't think it's enough to skew.

[walons]

Something doesn't compute for me here. If the OECD numbers the host quoted for dollar per person medical expenditures hold, and if the medical expenses as % of GDP are about 15% in the US and about 10-11% in Canada--as I read they are--that implies that per capita GDP of Canada is somewhere in the neighborhood of 70-75% the US level; but other numbers put it at about 85%. Anyone can enlighten me?

[RN]

There are so many material misrepresentations in that article.

He seems to earn the title with something he writes nearly every week: Mankiw is scum of the earth.

[Bill Harshaw]

Actually, the death rate from homicide and accidents can tell us something about healthcare--the emergency medicine category. Consider the death rate among US military in Iraq--the fact that the wounded don't die at the rate they did in prior wars reflects well on military medicine. It would be interesting to have similar figures on gun shot wounds and traffic accident injuries in the U.S. and Canada.

[D-Slam]

"Does Canada lack an ability to supply high-calorie foods inexpensively? "

As a Canadian, I'd answer this, but the lineups start early for our State-supplied 500 calorie "People's Lunch", that the heroic workers of Soviet Canuckistan are fed, so I'd better go.

First Samwick and his myths about pregant couples driving around for five hours to look for a hospital, and now this. Seriously, I wish Republicans who slag Canada would, like, VISIT the place or something before they run their yaps. This dumba** has tenure at Harvard?

[P Hogan]

"Um... I can't cough up statistics but, my experience as a Canadian is that we eat at least as much crap, we drive more and walk less (it's **cold** in winter) and that Canada has roughly the same proportion of people of European origin as the US"

Obesity rates [BMI >30]:
U.S. 31%
Canada 14%

---ethnicity----
Asian pop.
U.S. 4%
Canada 9%

Black pop.
U.S. 12%
Canada 3%

Hispanic pop.
U.S. 15%
Canada 1%

[andres]

John Emerson: The honor roll of Nobel Laureates in economics includes Milton Friedman, Friedrich Hayek, Robert Lucas, and Edward Prescott. Based on those august names, I would recommend to critics that they give up any hope that Mankiw will be denied the Nobel for reasons of political bias alone.

I could be wrong, but though Mankiw is a prolific writer in macroeconomics, I don't think he has made enough original contributions to macroeconomic theory to be Nobel material.

And for once I have to agree with STR: any column that argues that US health care does not need radical reform is coming from way out in left field and had therefore better be written by someone who is an expert in the area in a way that Mankiw (and Krugman) is not.

[baileyman]

It's my understanding that Mankiw is a professional economist. So I ask, do other professional economists take him seriously? aside from his influence in the halls of power?

[The Heretic]

Yes, Mankiw wrote a great deal about Post Keynesian Economics. I take him seriously as an economist.

I think though, after reading his blog, he tends to make a lot of unsubstantiated remarks, perhaps even politically motivated ones. He is quick to pounce on conservative ideas and not investigate them as thoroughly as he should or with any reason. I think he gets caught up in the politics 'gotcha' game.

Apparently, his knowledge of

[Psychohistorian]

Forgive me for not agreeing with every other poster.

"Does Canada lack an ability to supply high-calorie foods inexpensively?

Low-birthweight babies are due to the failure to push prenatal care as well as to teenage motherhood, which is itself more the result of a failure to push birth control information and technologies than the "sexual mores of American youths."

The millions of the poor who are eligible but not enrolled in Medicaid will be signed up when they show up at the emergency room, but they are not getting the care that might keep them from winding up at the emergency room."

None of these call for major health care reform. Obesity and low-birthweight argue for better education, birth control, sex ed, and some ingenious system of changing people's eating behaviour that massive social norms and a multi-billion dollar weight loss industry have thus far barely put a dent in (or, at least, have not kept down).

People not being signed up for Medicaid calls for, amazingly, signing more eligible people up for Medicaid. Not national health care, Not even a noticeable change in health care policy.

The cost point is a significant issue. But the article is not about the relative merits of government vs. private efficiency. Though somehow I suspect the evidence comes down a bit more on the private side, which would suggest mild regulation and improving competition and information. Not national health care.

Ultimately, Mankiw left out the cost statistic; the others mentioned are irrelevant to the national health care issue. The column was about misconceptions with health care and why maybe we shouldn't completely reform the entire system to help 2-3% of the population who are really uninsured and without any options. It was not an argument for government versus private sector efficiency. Thus, this hardly seems like a big deal.

[Karl K]

Mankiw made three main points that no one on here has refuted.

--Life expectancy is a poor measure of the effectiveness of our health care delivery system. Other factors come into play.

--The "47 million uninsured" was, is, and always will be a misleading number, and those who use it, like the Democratic presidential candidates, to argue for some vast sweeping reform of our health care system (presumably to some government run approach) are engaging in demagoguery.

--The fact that we pay more for our health care could be attributable to the fact that we are more prosperous and spend that kind of money because we want to.

These are reasonable arguments and worth debating civilly. But what do we have on here? We have commenters here accusing Mankiw of being "dishonest," or being a "liar" or "being willing to to lie"...while others rail against him for getting tenure at Harvard, when the guy has written some of the most influential articles in economics and a textbook that is a model of clarity.

I am so disheartened here by some of the reactions -- reactions, I daresay, are typical of a certain strain of leftists in this country.

[IM]

"--The fact that we pay more for our health care could be attributable to the fact that we are more prosperous and spend that kind of money because we want to."

This "fact" makes sense if somemone compares the U.S. with, say, Uganda.
But if you compare the U.S. with Luxemburg or Norway or the already mentioned Switzerland the "fact" simply is't true. All could spent as much a the U.S. on healthcare but don`t do it. All have at least equal if not superior outcomes.
Richer countries spent more relative and absolute on healthcare but the U.S. still stand out. Why?

[Bruce Steinback]

Well, looks like this is moribund, but just in case anyone wanders in here, fascinating stats from McKinsey - http://www.mckinsey.com/mgi/publications/Framework_Health_Care_System.asp

Nothing from Canada, but for US vs. UK and Germany...
% overweight - Almost exactly matched:
US (F/M) 28.1/42.2
UK 33.7/43.4
Ger 26.9/44.1
So much for that argument Mr. Mankiw.
(BTW, Japan had predictably much less overweight, but like double the smokers).

Oh, and I vaguely remember reading that actually teenage births in the US have been dropping like a rock in the last few years too.

[Margaret Lance]

"We have 13 provincial and territorial health insurance programs, as mandated by the Canada Health Act. Each program is run differently. "

While this is true, the national health identity is maintained at the federal level - it's a world stage we're playing on and the feds aren't stupid, they are wrestling for control as much as possible in this climate of segregated care systems.

I think canadians want change in this respect - it's creating divides in sub-cultures, from Quebec to Ontario to Alberta, we're becoming less alike, and this is contrary to our cultural asparations as a whole nation. There has to be a shift in mindset here.