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I'm going to be a little Labor Day weekend lazy here and jot down a few questions I'd like to look into, rather than provide any actual information about them. If you have any answers, please comment!

1. Credential inflation.  My wife, a certified nurse-midwife, rolls her eyes at the increasing impossibility of getting credentialed in her field without a doctorate. She spoke recently to a young labor & delivery nurse who's planning to become a midwife and is facing four years of study and likely debt. Apparently you can't get certified as a midwife in NJ now without doing the doctorate (not a Ph.D.), and that's a nationwide trend. "We have to do it," was the word for a university program director, because all the other nursing specialty and other non-physician medical professions like OT are doing it.

Why Americans spend so much on health care: The big picture

Stimulated, like a lot of people, by Bernie Sanders' single-payer healthcare plan, I spent some effort this week speculating about how the U.S. might attain affordable healthcare for all. Government efforts focus mainly on how to strain out wasteful care, how to coordinate care, how to pay for performance. To my mind, a possibly more important question is: how to gradually squeeze down payment rates for hospitals, doctors, and pharmaceuticals?  How to move toward all-payer if not single payer -- that is, phase out or reduce healthcare providers' divide-and-conquer leverage?

3 a.m. this morning,* looking for something else on my Kindle, I stumbled on a book I'd bought and forgotten about that offers a very different answer as to why the U.S. spends so much more on healthcare than comparably wealthy countries. The authors made quite a splash with their central hypothesis four years ago**, and their insight is no secret, but it had faded into the background for me.

The book is The American Health Care Paradox: Why Spending More is Getting us Less, by Elizabeth H. Bradley and Lauren A. Taylor.  Their answer: we spend more because we're sicker, and we're sicker because we spend less than peer countries on social services that have a bigger impact on health than medical care does: housing, nutrition, education, the environment and unemployment support. Here's the core argument:

A question for healthcare economists (update)

I have a question for healthcare economists. Bear with me through a few bullet points to get there. [Note update at end: there's an answer of sorts in Kenneth Thorpe's analysis of Bernie Sanders' plan.]

• It's well known that the U.S. pays far more for healthcare -- per capita, per procedure, and as percentage of GDP --  than any of its developed-world peers. According to the OECD, the US spent 16.4% of GDP on healthcare in 2013. The next highest spenders, Holland and Switzerland, spent 11.1% of GDP.
  
• A main reason, if not the driving reason, is that in the U.S. healthcare payers are fragmented, diminishing their buying power. Private insurers and self-funded employers pay rates that may average 150-160% of Medicare rates.
  
  

Tax code progressivity isn't everything. But the top line matters

"Don't soak the rich," Edward D. Kleinbard admonishes U.S. policymakers in today's Times. Countries with less progressive tax systems than the U.S., which tax everyone more and spend more on social services and other public goods, do a better job of reducing inequality (and fostering citizens' welfare) than the U.S. does. Lower income citizens get disproportionately more value from government spending, and an adequate tax base must be broad-based.

I take the point -- made with equal force two days ago by Vox's Cathie Jo Martin and Alexander Hertel-Fernandez [update: Mike Konczal and Matt Bruenig both demonstrate the alleged US progressivity is an illusion -- see below]. But there's a counterpoint. The U.S. may have a more progressive tax system and skimpier social welfare than the wealthy countries of Europe -- that's a longstanding reality. But all these countries have moved in the same direction over the past thirty years, and all have suffered widening income inequality. Here's Thomas Piketty's explanation:

The bipartisan consensus on healthcare cost control

It would be inaccurate to say that there are two main methods of controlling healthcare costs. But it's fair, I think, to say that there are two poles, with an important if unproven class of measures between them.

One pole is government control over the price of medical services, procedures and products, including drugs. The means vary widely, from direct government payment of providers (the U.K.) to regional government approval of rates negotiated by all insurers (Switzerland, for hospitals). Government rate-setting is employed by every wealthy country except the United States, which is also to say every country that provides universal health insurance to its citizens. Not coincidentally, the U.S. spends two-and-a-half times the OECD per capita healthcare spending average and almost twice as much as a percentage of GDP (as of 2011).

The other pole is to offload an ever-increasing share of the healthcare tab onto consumers, causing them to restrict their healthcare consumption.  The U.S. has de facto taken this route. According to Kaiser Family Foundation research, the percentage of workers who pay an annual deductible of more than $1,000 for a single-person plan provided by the employer rose from 10% in 2006 to 38% in 2013. From 2003 to 2013, while premiums overall rose 80%, the cost of the average worker's share of the premium rose 89%, from $2,412 for a family plan in 2003 to $4,565 in 2013. According to the 2013 PwC Touchstone Survey of major US companies, 44% of employers were considering offering high-deductible health plans as the only benefit option to their employees in 2014; 17% did so in 2013.  Deductibles have also skyrocketed in the individual market, a trend accelerated by the Affordable Care Act. In the ACA exchanges, the average bronze plan's single person deductible was just over $5,000 and the average silver plan's, just under $3,000.

What's Obama's peer group job creation ranking? Way better than 47th of 50

Romney's job creation record as governor of Massachusetts bears a striking -- if superficial -- resemblance to Obama's as President: a first year of job losses followed by three years of weak growth (actually, for Romney, a rather strong final year following two near-flat years).

Romney has been attacking Obama's job creation record since...forever.  You know the drill: Obama made the recession worse, Obama isn't working, nearly a million jobs lost on his watch.  This week, as the Obama team turns the tables and broadcasts that Massachusetts ranked 47th out of 50 states in job growth during Romney's tenure, the Romney camp finds an excuse: you can't blame him for first-year job losses. Of course, if you give Obama that pass, the country has gained nearly 4 million jobs on his watch.  Or, as Michael Tomasky calculated: excluding each executive's first year, and through April of their fourth year, Obama has presided over 2.35% job growth, Romney over 1.9%.

Hence, two Obama spox pounced this morning on Twitter:

Jim Messina: Romney economics: Under Romney, MA fell to 47th out of 50 on job creation. Under POTUS, we see 27 months of private-sector job growth.

Stephanie Cutter: Romney campaign undercut its entire strategy by arguing that he inherited bad economy so 1st yr shouldn't be counted.

What's needed to concentrate fire, it seems to me, is an apples-to-apples comparison to Romney's 47/50 ranking, or a reasonable facsimile thereof. In reality, any local economy in any given period is sui generis; Rick Perry is not a "better" job creator than Mitt Romney. But with Romney shamelessly manipulating the stats to attack Obama, it's fair to come up with a "peer group" for the US during Obama's term.  And what could be fairer than the OECD, which includes Korea, unemployment rate 3.7% at present, and Japan, clocking in at  4.5%?  So let's have a look.

I'm in Mitt Romney's tax bracket...

not really, but in 2011 my wife and I paid the same 14% (roughly) in federal taxes on our income as he did. Which seems not right, since his household income is over 100 times ours.  In any case, the Romneys and the Galeota-Sprungs are among the two thirds of American households that, according to David Leonhardt, pay less than 15% of their income in federal taxes.

Our tax return is an interesting cross-section of the current federal tax system -- in one way quite typical (net result) and in another not so typical (how we got there). While my wife is a salaried worker, I am self employed, and that introduces somewhat self-canceling distortions. The two salient features are the self-employment tax, which doubles Social Security and Medicare taxes on income up to $106,800, and  the individual 401k, created in I think 2005 for solo self-employed taxpayers, which allows solo self-employed people over 50 to contribute up to $54,000 yearly to their retirement plans, deducting that contribution from their taxable income.

Oh for a health care monopsony

Those who blame for-profit health insurers for high U.S. health care costs usually focus on administrative and marketing costs. As Ezra Klein has highlighted, however, these are difficult to calculate; they're not always significantly higher in the private sector than in the public; and they don't fly as a primary cause of the U.S.'s uniquely high per capita health care spending.

Yet our Balkanized health care payment system does have a huge impact on health care costs. Klein again, citing Kaiser Permanente CEO George Halvorson pointing out that CT scans cost about 3x as much in the U.S. as in Europe, links to a 2003 study published in Health Affairs ("It's the Prices, Stupid...", Gerard F. Anderson et al. ) analyzing why procedures cost so much more in the U.S. than in OECD countries with universal healthcare.

The conclusion of this study bears out T.R. Reid's reporting in The Healing of America. Countries with universal health care all accord government the power of monopsony - "a state in which demand comes from one source." That is, the governments of France, Germany, Japan, Canada and England all set the prices for every procedure (or patient, in a capitated system) -- regardless of whether or not payments are funneled through private (nonprofit) insurers. All of them, by American standards, squeeze doctors and hospitals. Anderson et al:

In the U.S. health system...money flows from households to the providers of health care through a vast network of relatively unccordinated pipes and capillaries of various sizes. Although the huge federal Medicare program and the federal-state Medicaid programs do possess some monopsonistic purchasing power, and large private insurers may enjoy some degree of monopsony power as well in some localities, the highly framented buy side of the U.S. health system is relatively weak by international standards. It is one factor, among others, that could explain the relatively high prices paid for health care and for health professionals in the United States.

In comparison, the government-controlled health systems of Canada, Europe, and Japan allocate considerably more market power to the buy side...

Even a pure monopsonist is ultimately constrained by market forces on the supply side -- that is, by the reservation (minimally acceptable) prices of the providers of health care below which they will not supply their goods or services. But within that limit, monopsonistic buyers enjoy enough market clout to drive down the prices paid for health care and health care inputs fairly close to those reservation prices. It can explain, for example, why Fuchs and Hahn found that "U.S. fees for procedures are more than three times as high as Canadian fees [and] the difference in fees for evaluation and management services is about 80 percent."

From this perspective, individual health insurance companies are not "to blame" for high U.S. health care costs. But the system that allows them to exist is. When the government abjures monopsony power, patients lose.

Doctors do consider themselves underpaid and in some cases overmanaged in monopsony systems. On the other hand, they generally have to cope with zero medical school debt, piddling malpractice insurance fees, and minimal administrative burdens (in France, where national health cards record every procedure and fee, the time and money doctors spend on administration is close to zero). Ironically, one reason U.S. insurers pay doctors and hospitals so much more than their rich country peers is that the balkanized payment and claims system imposes onerous admnistrative costs on providers.