A new study by researchers at the Cambridge Health Alliance and Harvard Medical School shows another way that our patchwork system of private health insurance is, to paraphrase FDR, both bad morals and bad economics. Doctors David Himmelstein and Steffie Woolhandler, who are also primary-care physicians, show that emergency room waiting times in the U.S. have increased starkly in the last decade—the median wait increased from 22 minutes in 1997 to 30 minutes in 2004, a 36% increase; a quarter of heart-attack patients now have to wait over 50 minutes—as more Americans have had to rely on emergency rooms for routine coverage and as hospitals have diverted emergency-room resources to more profitable uses (what a law-and-economics type might call "highest and best" uses). Lack of universal coverage doesn't just leave tens of millions of Americans uninsured and even more only precariously insured; it also directly affects the quality of care that those with insurance can receive. As this paper makes clear, supporting universal healthcare isn't just about the uninsured, but about everyone.

Himmelstein and Woolhandler have also (in a different study) demonstrated how our system of private insurance creates enormous administrative costs relative to single-payer systems. Their data show that the U.S. system entails administrative costs that are, per capita, three-times those in Canada. Although all the Republican presidential candidates—including the "maverick" John McCain—recite from their ideological cue cards how the U.S. system needs to increase competition and consumer choice, in this context empirically sound economic analysis actually indicates that the opposite is true. While conservatives talk about "moral hazard" in health care—the concept in economics that insurance leads people to engage in riskier behavior—the real problem is "adverse selection," i.e., that insurance companies, in a free-market, will screen out people who are sick.

The costs come in because our system employs scores of people whose job is not to provide care but to pass off the cost. According to Himmelstein and Woolhandler's data, 27.3% of the U.S. health care labor force was devoted to administration in 1999, a number that mostly likely has grown since then. In Canada, the percentage was 19.1%. Bureaucracy—that beloved punching bag of the Right—consumes five times the amount of our private system as it does of Medicare (a single-payer system!) and eleven times the amount as of the Canadian system. Doctors offices, insurance companies, and hospitals must pay people whose entire job is to wrangle over the bill, not to mention the hours of productivity patients must spend in this battle of attrition. But the underlying cost never goes away. 

Private insurance companies will even skimp on things like preventative care that are cheaper for the system as a whole.  For example, someone with Type-1 Diabetes, crudely put, can either monitor their blood-glucose closely—which entails paying for insulin, test strips, glucose meters, and either syringes or an insulin-pump—or face tragic results, such as amputation. Now, paying for all of the test strips is a lot cheaper than paying for an amputation, but a patient's current insurance company won't pay for the test strips because it figures, rightly, that it won't bear the cost of the amputation. Some other company will be insuring this patient in 20 years and have to pick up the tab. It's perfectly rational if everyone is acting to maximize profit.

Somehow, conservatives manage to propagate their ideology as hard-headed, while patronizing liberals as naïve, if well-intentioned, do-gooders. For example, in the debate over the so-called economic stimulus package, Edward Lazear, the chair of President Bush's Council of Economic Advisors, responded to Democrats who argued that the plan should send money to low-income individuals by saying, "There are many noble goals, and there are many things that we want the government to do. But remember that the goal that we are thinking about right now is to ensure that the economy does not slow significantly." Careful to report "both sides," news coverage—such as this piece in The New York Times on the package—enables them with its he-said—she-said coverage. (See this morning's column by Paul Krugman critiquing the plan.) When it comes to healthcare, the most progressive policies are also the most empirically sound