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| A Skeptical Economist Reviews the Funding For Elizabeth Warren's Medicare for All Plan | Login/Join |
Has Achieved Nirvana |
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Has Achieved Nirvana |
As the Atlantic recently pointed out, it’s not the numbers so much as the assumptions behind them. I can tell you my plan to eliminate the debt in 8 years, just need to cut spending by x% and increase taxes by y% while increasing the growth rate to z% while keeping interest rates at i%. And the numbers will add up.
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| Has Achieved Nirvana |
Which assumptions seem wrong to you? | |||
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| Has Achieved Nirvana |
Lets see... That hospitals can survive the cuts in reimbursement rates she is proposing. (especially smaller rural hospitals) That drug prices could be lowered 70%(!) for branded and 30% for generic. That administrative costs could be lowered to 1/3 the rate that the Urban Institute figured was feasible. That health care cost growth rate can be cut by 30%. That the huge swathe of new taxes won't affect the growth rate in the economy. I'm sure there's more. Not to mention the big assumption that any of this could ever pass.
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| Has Achieved Nirvana |
Let's start here. What do other countries pay for the same medications? Canada? Germany? The UK? Japan?
That is unfair, because that's an assumption for every candidate of either party, from the beginning of time until the end of time. | |||
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| Has Achieved Nirvana |
You also have to wonder how much she is double counting revenue since some of it was mentioned for other large scale programs like free college and ‘canceling’ student debt, whatever that means.
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| Has Achieved Nirvana |
Quirt - re other countries... right now we subsidize drug development for the rest of the world. It’s been said about drug development that the first pill costs a billion dollars and second pill costs $5. We’ve been paying for the first pill while much of the world buys the second. It isn't a fair system, obviously, but we can't pretend that we could just remove that subsidy and everything would go on as it does today. Not everyone can just order the second pill. Also, just look at it from a top down perspective. I think branded drugs represent something like 3/4 of the market (by $, not by #), with generics the other 1/4. Do you really think we could eliminate ~60% of Pharma revenues with no ill effects? (not to say that drug prices aren't out of. control, they are, and we should have a medium term plan to expand the burden of subsidizing development beyond the US, but this isn't that plan)
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| Has Achieved Nirvana |
It's naive to think that, if we were to spread the "first pill" subsidy around the industrialized world, it wouldn't bring pharma costs down in the U.S. | |||
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| Has Achieved Nirvana |
It would be, good thing nobody thinks that.
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| Has Achieved Nirvana |
Ah! So you agree that forcing the "first pill" cost to be spread around the industrialized world would save us money, and be fairer. With that said, how do you know that doing so would not bring down brand name drug costs by 70%? Do you have any analysis? I know you dislike Warren, I'm trying to figure out whether there is a principled basis for disliking her funding plan for Medicare For All. | |||
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| Has Achieved Nirvana |
Yes, that's why I said as much in the post you quoted.
A plan to do so would have to unfold over some years, because Pharma companies tend to have multi-year contracts, not to mention (one would hope) there's be at least a little diplomacy to grease the transition with all of our allies. Warren just assumed the savings for all ten years, as it we just press the '70% off' button and voila. Like I said in the post you quoted, we need a plan to do this. But this isn't it.
Go back to my original post. I listed a number of rather absurd assumptions that she is making, leaving even places like the Urban Institute shaking their heads. And those were just off the top of my head.
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| Has Achieved Nirvana |
Yes, I saw your original post. And yet, there's an economist at CNN who dislikes Medicare For All, who says that the numbers in her plan add up, and he doesn't challenge her assumptions, even though that's an obvious point of attack.
Is there a particular reason you focus on economic analyses that say her plan won't work and ignore economic analyses that say her plan adds up? I'd love to hear what our resident economist thinks. | |||
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| Has Achieved Nirvana |
I didn’t focus on or ignore anything. This guy’s analysis seems fine as far as it goes, but he’s only commenting on numbers, not the reasonableness of the assumptions behind them.
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| "I've got morons on my team." Mitt Romney Minor Deity  |
Our resident economist thinks that Jon has pointed out a lot of deeply problematic assumptions in Warren's "proposal." On the other hand, kudos to her for proposing something that gives people like Jon real information to chew on. Unlike the stuff that GOP pseudo-wonks like Ryan have proposed in the past, this one isn't filled with magic asterisks to plug all the holes. Her assumptions (the good ones, and the head-shaking impossible ones) are there for all of us to see. | |||
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| "I've got morons on my team." Mitt Romney Minor Deity |
Some pushback on the estimates The Atlantic Article Jon referenced And the Urban Institute study (not a right-wing think tank). Urban Institute Report | |||
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well-temperedforum.groupee.net The Well-Tempered Forum Off Key A Skeptical Economist Reviews the Funding For Elizabeth Warren's Medicare for All Plan