US Politics Of Medicine

After presiding over an economy with a record disappointing performance, which usually gets incumbent presidents fired, Intrade puts Obama’s chance of re-election at 79%! I attribute an important part of this to the politics of medicine. Here’s recent US medical politics in a nutshell:

Seniors vote a lot more, and they love their free medicine, so US politicians have long written them a blank check, leading to rapid cost increases. Wonks have long said “something must be done” about costs, and the left has long wanted to expand the number with health insurance. So Obama pushed through a law requiring such an expansion, and declaring an intention to do something about costs. Later. But something, they swear.

This created a vague unease among seniors that their free medicine might get cut. Vague because seniors don’t really get how exactly costs might be cut. But still, cuts! Which created an opening for a Republican to get elected president by promising to never cut senior medicine. Except that the frontrunner Republican candidate was someone who had implemented a similar program when he was governor. And then he made a “bold” move to pick a running mate with a bold plan to turn Medicare into a voucher system. Which Romney thought would give him credit for taking problems “seriously.”

Bad move. Voters don’t really like “bold” politicians. Since seniors have a better idea of what “vouchers” mean, and how exactly they lead to cuts, that let Obama more effectively attack Romney as planning to cut seniors’ free medicine. Which is sticking, because although everyone says “something must be done”, seniors don’t actually believe that their free medicine needs to be cut. So seniors in key swing states move toward Obama, and he gets re-elected.

And after the election, there’s pretty much no chance Obama will let senior medicine get cut, at least in any way they could trace back to him. Nor will the next president after him. Maybe we’ll go into more debt, or raise taxes, or cut military spending. But no way will they stop writing medical blank checks to seniors, and letting costs rise as they will.

Here’s the recent data fleshing out this public opinion story:

Voters in three critical swing states broadly oppose the far-reaching changes to Medicare ­associated with the Republican presidential ticket. … For seniors in Florida, Ohio and Virginia, Medicare rivals the economy as a top voting issue. And by majorities topping 70 percent, seniors say they prefer to keep Medicare as a program with guaranteed benefits, . … [Romney’s] choice of Ryan — who wrote a proposal that would move Medicare toward vouchers as part of an overall attempt to curb the deficit — is considered a bold and politically risky move, given Medicare’s popularity. …

Although seniors nationwide dislike the idea of moving away from the current system, their opposition is even more pronounced in Florida, Ohio and Virginia, where both candidates have spent weeks saturating the airwaves with Medicare attack ads. Obama hammers the Ryan plan continually, telling supporters at a campaign event in Milwaukee last Saturday that Romney and Ryan would “turn Medicare into a voucher program in order to pay for tax cuts for the very wealthy.” …

Underlying support for not changing Medicare is the widespread belief that the system is functioning smoothly. In Florida, 70 percent of all voters say the system is working well — rising to 91 percent of the state’s seniors — and positive assessments of Medicare are nearly as high in the other states. … There is also a widely held public perception that changes are needed to keep Medicare sustainable for future generations. The problem for Republicans is that swelling budget deficits are not a sufficient motivator for voters. Across the three states, about three-quarters of voters say that Medicare cuts are not essential to deficit reduction. (more)

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  • Wonks Anonymous

     Robin, you should have checked with some political scientists. The Monkey Cage regularly complains about people assuming the economy would normally doom Obama, when a number of models (which take into account growth from a low base) actually have it favoring him.

    • Robin Hanson

      Yes, there are always a wide variety of models, in which you can find any conclusions you want, if you dig enough. I’ve read that literature, and stand by my statement.

      • sartke

        You stand by your extremely limited, single issue model where you’ve decided to find the conclusions you wanted. Seniors in those states – seniors! – still find the economy more important than Medicare in the poll you’re citing.

        That’s not to say that this issue doesn’t matter. It does matter. Lots of things matter. Give up your temptation to explain millions of individual decisions through an overarching narrative.

      •  To find the limits of a theory, you must try to push it beyond them.

      • Jadagul

        Robin, could you elaborate on that?  You’re the only person I’ve read who makes that claim and I’d like to hear more.

      • Peter McCluskey

         If the academic literature disagrees with Intrade, why should the literature be taken seriously?

        I’ve been betting on Obama at Intrade based mostly on how the economy has been doing recently.

        I was puzzled by claims that Obamacare might hurt Obama. But it’s not obvious that the benefits he’ll get from it are much larger than what a typical Democrat gets for appearing to care more about providing medicine.

        I may increase my bet slightly in response to your analysis, but I don’t consider it as important as you do.

  •  I’m not disappointed that voters recognise that Obama inherited his economic problems rather than creating them.

    Healthcare costs are rising everywhere. The pre-Obama system was the most expensive pre capita in the world. Every public healthcare system is more efficient than it. So there is an answer to how to cut costs. Run it more like the NHS.

    • Doug

      Both the pre-Obama and post-Obama system are the most expensive per capita systems in the world. Healthcare costs have already grown >10% since ACA.

      Every other public healthcare system is more efficient because it doesn’t cut a blank check for unlimited medicine. Every other system rations publicly funded medicine in some way or another . That means that popular, high-demand procedures will either not be reimbursed or reimbursed at such a low rate that supply effectively goes to zero.

      Medicare, neither pre-Obama or post-Obama will ever do that. Medicaid does that to a certain extent, and consequently medicaid is much more like European health systems, both in terms of per-capita expenditures and degree of rationing.

      So you don’t have to say anything about the NHS. There’s a simple homegrown replacement. It’s called medicaid. Simply replace medicare with medicaid. Heck, if you want to go full European make everyone universally eligible for medicaid (at current reimbursement schedules).

      Let’s see any American politician try to get elected on the platform that he wants to replace medicare with medicaid. American voters simply don’t want Euro-style medicine. They want unlimited un-rationed medicine for seniors.

      • weareastrangemonkey

        European health service systems are far superior to medicaid. They are really not comparable. The reason they are so much cheaper is because they face better incentive structures than US health providers. My experience of Americans in the UK, including people with new born babies, is that they find the health care service comparable as to being on their work health insurance schemes. Not as many frills but the actual health care about the same. This is at a considerably lower cost. There really isn’t any evidence for public health care leading to low quality provision.

      • No, its cheaper because they very, very strongly limit and delay the expensive stuff.  

        How long does it take to get an MRI for something non-life-threatening but extremely painful in the UK?: Months.  
        How long in the US?: You often can same day.

      • weareastrangemonkey


        I suspect I may have underplayed the shortfalls of the NHS. This was a reaction to the completely absurd comparison of the euro health systems to Medicaid.

        I would be amazed if the US system did not provide a better service than the NHS to those with Insurance or Medicare. It spends 2.5 times as much per capita and delivers a very low quality service to a large proportion of the population.

        What I do think is that is that the NHS could deliver the same objective quality of healthcare as standard US health insurance for much less than 2 times the current budget. The NHS is just run more efficiently than the US health care system; as are the majority of OECD health care systems.

      • JW Ogden

        I thought that they spend less in Europe mainly due to price controls.

      • Peter Jones

         Economies of scale are important, if that’s what you mean by price controls. Having a patchwork of systems and providers is something that leads to high costs.

  • spindritf

    > Intrade puts Obama’s chance of re-election at 79%!

    How much money is riding on those predictions? That is: how much money will actually change hands after the elections? How does one calculate that from data Intrade provides?

    • Open interest is

      739,359 shares; these are $10.00 each, so we’re talking about a pool of $7,393,590; this can change, so it’s not quite “how much money will actually change hands after the elections.”

  • Michael Vassar

    Robin, why don’t you create a Kickstarter campaign to fund intrade decision markets?

  • There are two sources for the (in my view laudable) resistance of seniors to relinquishing medical care benefits:

    1.  The loss aversion that is implicated in deleting a broad benefit;

    2. The symbolic implications of “uncaringness” toward seniors when benefits are deleted. (Under Robin’s theory that medicine is showing caring.)

    Most people recognize only #1; Mitt Romney chose Ryan because he had a “realistic” plan that didn’t threaten existing senior beneficiaries.

    Romney miscalculated because he omitted Robin’s reason (#2). Seniors are moving away from Romney in closely contested states not because they think Ryan threatens their medicine but because lowering benefits decreases the demonstrated caring toward seniors in general.

    I think that’s better than ‘Romney tried to show boldness.’ When has Romney ever tried to be bold? It’s also more theoretically congruent: had Romney understood Robin’s analysis, he might have avoided this decisive mistake.

  • gc.wall

    Single payer universal healthcare. The Olympic opening act demonstrated what the British majority think of their “government run” healthcare.

  • gc.wall

    A single tragic incident or a chronic illness can deplete the savings of responsible individuals and families long before the afflicted die.

  • Actually seniors, on average, prefer Romney by a fairly decent margin.  Its everyone else that prefers Obama.

    •  But the point is that the fact (or what I take to be a fact) that they’re supporting Romney less than expected that’s wrecking Romney’s election plans.

      •  To be precise, I just saw that Romney’s lead among seniors has declined from 20% to 4%.

  • Drewfus

    So this got me thinking about constitutional limits on government spending, which might be a remedy for sectional interests like Medicare. So how could a constitutional limit on GDP spending – say 25% – be distrubuted or managed given three tiers of goverment? Perhaps by ordering the tiers as;
    Federal > State > Local
    and then requiring that each level below Federal can spend no more than;
    25% minus Federal percent [State], or
    (25% minus Federal) minus State percent [Local]
    In each case weighted by State (or perhaps Local) total income.

  • ThaomasH

    Medicare costs will have to be cut, not just the same rising costs passed on to Medicare recipients.  Vouchers were not a solution to higher costs, so no solutions have been forclosed. 

  • My theory is that Obama is going to be re-elected in spite of the bad economy because it is impossible for any reasonable candidate to survive the Republican primary season. Basically, this election is the Republicans’ to lose, and they’ve decided they’d rather lose it than agree to adjust their platform in the direction of the proverbial median voter. In contrast, Obama’s positions tend to match the median voter pretty well. Obama may be in the same kind of pickle that Jimmy Carter was in when he ran for re-election, but his opposition is no Ronald Reagan. (Imagine if the only candidates for the Republican nomination in 1980 were Gerald Ford and Barry Goldwater, and you can see why Obama is doing as well as he is.)

  • dmytryl

    The main issue with Romney has been that he’s been acting like he is simply stupid. Everyone I know who at all followed news here – I’m speaking of perspective outside the US – considers Romney to be simply stupid, and that’s the end of it, without looking at all into how he would influence this country (as we aren’t voting).

    I don’t even think two party democracy substantially works via choosing candidates on basis of personal agreement with their plans. If you want to choose plans, you should decide them by referendum. What you get is two parties trying to pick not obviously evil, intelligent candidates, to win the election, and this happens to be more effective than a king, and less disruptive (and more coherent) than having a referendum on every issue. Anything fancier and more direct than ‘elect good guy to be a temporary, power limited king’ would require instant runoff voting at least.

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  • vanessa p

    U.S. medical students are considerably more likely to be liberal than conservative and are more likely to be liberal than are other young U.S. adults.