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Rethinking The Gruber Controversy: Americans Aren’t Stupid, But They’re Often Ignorant — And Why

December 29th, 2014

M.I.T. economist Jonathan Gruber, whom his colleagues in the profession hold in very high esteem for his prowess in economic analysis, recently appeared before the House Committee on Oversight and Government Reform. Gruber was called to explain several caustic remarks he had offered on tortured language and provisions in the Affordable Care Act (the ACA) that allegedly were designed to fool American voters into accepting the ACA.

Many of these linguistic contortions, however, were designed not so much to fool voters, but to force the Congressional Budget Office into scoring taxes as something else. But Gruber did call the American public “stupid” enough to be misled by such linguistic tricks and by other measures in the ACA — for example, taxing health insurers knowing full well that insurers would pass the tax on to the insured.

During the hearing, Gruber apologized profusely and on multiple occasions for his remarks. Although at least some economists apparently see no warrant for such an apology, I believe it was appropriate, as in hindsight Gruber does as well. “Stupid” is entirely the wrong word in this context; Gruber should have said “ignorant” instead.

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Unpacking The Meaning Of ‘Rationing': A Response To Dowd And Allison

June 27th, 2013

Bryan Dowd and Kirk Allison are to be thanked for their lengthy treatise on the word “rationing.” It is a term whose interpretation economists have left to politicians — not invariably models of erudition. Check the subject index of introductory textbooks or even intermediary textbooks in economics and rarely will you see there the term “rationing.”

Part of the lack of clarity on the term can be laid at the doorsteps of the profession that claims to know all about resource allocation but rarely ever takes up the subject of rationing in its teaching. Sadly, modern textbooks in economics are, by and large, just copies of one another — worse than me too drugs in which at least one molecule is changed. At some point, someone forgot to cover the term, so all other texts followed.

But another reason for the lack of clarity on the term reflects the fact that even economists cannot seem to agree on its meaning.

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Competing Visions: A Response to John Goodman

April 4th, 2013

In his post “Why don’t Republicans Have a Vision for Health Reform” (April 2, 2013) John Goodman offers interesting comments on my earlier post “Reflections on The Federal Budget Resolutions” (March 21, 2013). I thank him for the comments.

My post was focused strictly on the vision for U.S. health care that Democrats and Republicans on Capitol Hill now project through the Senate budget resolution and the House budget resolution. Goodman, on the other hand, builds from my post a bridge to the vision some Republicans – including Goodman himself – have in the past projected for U.S. health care.

I can understand why Goodman used the well-known technique of the bridge, because he believes that Republicans currently do not have vision for health care. On this point, however, I beg to differ. There actually is a current Republican vision. It has been expressed through the House budget resolution.

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Reflections On The Federal Budget Resolutions

March 21st, 2013

According to a process laid out in the Budget Act of 1974, the budget resolutions put forth by the House of Representatives and the Senate emerge as modifications, sometimes substantial, of the budget to be submitted by the first Monday in February by the President of the United States.

Alas, for governance, the President has missed that deadline for fiscal 2014 (starting in October 1, 2013). He is likely to submit a budget only by early April – two months late. In the meantime, both chambers have worked up their own budget resolutions, without the President’s budget as a starting point. It shows, because the tax- and spending numbers in these two budgets, and the visions for America they reflect, differ so starkly that it is hard to imagine the emergence of a joint conference report reconciling the two budgets in one that could pass both chambers.

But all is not lost. At least the American people now have before them the visions the two parties have for our country, especially in regard to health policy.

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Assessing The ‘Gang Of Six’ Deficit Reduction Plan

July 22nd, 2011

The “Bipartisan Plan to Reduce our Nation’s Deficits” developed by the “Gang of Six (or Seven)”, a group of Senators from both parties, certainly is not something I would brag about before a group of Princeton students who, I routinely tell them, will have to grow up quickly to clean up the mess their parents […]

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Will More Insurers Control Health Care Costs Better?

July 9th, 2010

A common theme among health reformers has been that the small-group and individual markets for health insurance are too concentrated and thus inadequately competitive. The proposed remedy is to have more independent insurers compete within local markets.  Reformers left of center on the ideological spectrum – President Obama prominent among them – advanced this thesis […]

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Lessons From The Health Care Summit

March 1st, 2010

Many journalists have called and asked me what I have learned from watching the much heralded Health Care Summit at Blair House. Actually quite a bit, as the discourse there crystallized so clearly the ideological division that makes coherent and comprehensive health reform so difficult in this country, if not impossible. In thinking about this […]

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Grading The President’s Health Care Speech

September 14th, 2009

After decades of teaching, I view everything around me as a final exam and assign it letter grades. Naturally, I graded President Barack Obama’s speech as well. The overall grade is A–, a highly respectable grade at Princeton, although there is variation around this overall average for the different themes in the speech. The elegance […]

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A Modest Proposal On Payment Reform

July 24th, 2009

Editor’s Note: In the post below, Uwe Reinhardt proposes to move from the present, price-discriminatory system of private-sector pricing of health services toward an all-payer system that could serve as a transition to an eventual system based on bundled payments per episode of illness for acute care, or capitation for chronic care. In a response to […]

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INSURANCE: A Closer Look At HSAs

April 12th, 2007

Do high-deductible health insurance policies, coupled with tax preferred Health Savings Accounts (HSAs) championed by the Bush Administration and a number of health policy analysts, actually reduce rather than increase cost sharing for many groups? Dahlia K. Remler and Sherry A. Glied made this case in a Health Affairs paper which was quickly picked up […]

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HEALTH REFORM: Porter And Teisberg’s Utopian Vision

October 10th, 2006

In their recently published manifesto, Redefining Health Care (2006), Michael E. Porter and Elizabeth Olmsted Teisberg — hereafter simply PT — offer a utopian vision of a health system that might occur to anyone possessed of a modicum of common sense but not too familiar with the real world of health care.

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