IN SEARCH OF THE USA 9400: Paul Krugman in 2005!


Part 2—Sadly, a futile attempt:
Except on nights like last night, when cable news got totally hijacked, you'll hear a lot, in the next few weeks, about American health care.

You won't hear about the USA 9400, a very important group whose very existence is constantly disappeared.

That USA 9400! They're disappeared on "cable news" and in the New York Times. They were missing from the Times editorial we quoted in yesterday's report—the editorial which cited the very high cost of insurance for the average American family.

You aren't allowed to know that the 9400 exist. Sic semper contemporary pseudo-journalists! Also, manufactured consent!

Who are the USA 9400? How are they relevant to the ongoing pseudo-discussion? To answer your thoughtful questions, we're going to take you back to 2005, when Paul Krugman, perhaps naively, published a series of columns.

At this point, we're going to take a guess. Even as late as 2005, Paul Krugman may have believed that it's possible to introduce information into the mainstream discourse.

We'll guess he knows much better now. Back then, perfectly sensibly, he may have been a believer.

At any rate, Krugman published a series of columns about American health care. More precisely, he discussed the level of spending in American health care, as compared to the level of spending in other developed nations.

Uh-oh! In his series of columns, Krugman reported a very important fact. Our Here in our exceptional nation, we were spending much more on health care, on a per person basis, as compared to other nations whose health care systems were as good as ours, or perhaps even better. Over here in our struggling but self-impressed nation, a very large amount of money seemed to be missing in action.

Krugman's nugget column appeared on April 15, 2005, the very day when modern presidents refuse to report their taxes. The column bore this headline:

"The Medical Money Pit"

Uh-oh! Krugman planned to compare American health care spending to that in other nations. Early on, he issued a sensible note of caution:
KRUGMAN (4/15/05): Before I get to the numbers, let me deal with the usual problem one encounters when trying to draw lessons from foreign experience: somebody is sure to bring up the supposed horrors of Britain's government-run system, which historically had long waiting lists for elective surgery.

In fact, Britain's system isn't as bad as its reputation—especially for lower-paid workers, whose counterparts in the United States often have no health insurance at all. And the waiting lists have gotten shorter.

But in any case, Britain isn't the country we want to look at, because its health care system is run on the cheap, with total spending per person only 40 percent as high as ours.

The countries that have something to teach us are the nations that don't pinch pennies to the same extent—like France, Germany or Canada
—but still spend far less than we do. (Yes, Canada also has waiting lists, but they're much shorter than Britain's—and Canadians overwhelmingly prefer their system to ours. France and Germany don't have a waiting list problem.)
Say what? Per capita health care spending in Great Britain was only forty percent as large as ours?

Already, that sounded like a rather remarkable fact. Still, Krugman said the more important comparison would be to countries like Canada, Germany, France. He seemed to say that those countries had better health care systems than Great Britain, "but still spend far less than we do" on a per capita basis.

How much less were those countries spending as compared to us? At this point, Krugman turned to the numbers—to the types of numbers our modern news orgs and big cable stars constantly disappear:
KRUGMAN (continuing directly): Let me rattle off some numbers.

In 2002, the latest year for which comparable data are available, the United States spent $5,267 on health care for each man, woman and child in the population. Of this, $2,364, or 45 percent, was government spending, mainly on Medicare and Medicaid. Canada spent $2,931 per person, of which $2,048 came from the government. France spent $2,736 per person, of which $2,080 was government spending.

Amazing, isn't it? U.S. health care is so expensive that our government spends more on health care than the governments of other advanced countries, even though the private sector pays a far higher share of the bills than anywhere else.
Say what? In the most recent year available, France and Canada had spent roughly half as much on health care, per person, as we had spent over here?

For our money, Krugman complicated the issue a tad when he broke that spending down into private and government spending.
But yes! Unless we Americans were receiving much better health care, those spending numbers did seem somewhat "amazing."

Were we getting much better health care? Sadly, no, Krugman said:
KRUGMAN (continuing directly): What do we get for all that money? Not much.

Most Americans probably don't know that we have substantially lower life-expectancy and higher infant-mortality figures than other advanced countries.
It would be wrong to jump to the conclusion that this poor performance is entirely the result of a defective health care system; social factors, notably America's high poverty rate, surely play a role. Still, it seems puzzling that we spend so much, with so little return.

A 2003 study published in Health Affairs (one of whose authors is my Princeton colleague Uwe Reinhardt) tried to resolve that puzzle by comparing a number of measures of health services across the advanced world. What the authors found was that the United States scores high on high-tech services—we have lots of M.R.I.'s—but on more prosaic measures, like the number of doctors' visits and number of days spent in hospitals, America is only average, or even below average. There's also direct evidence that identical procedures cost far more in the U.S. than in other advanced countries.

The authors concluded that Americans spend far more on health care than their counterparts abroad—but that they don't actually receive more care. The title of their article? ''It's the Prices, Stupid.''
Uh-oh! According to Krugman, we Americans were spending much more on health care than our peers in other developed nations. But despite our (roughly) double spending, we weren't receiving more or better health care.

Where was all that extra money going? In that nugget column, Krugman offered a few quick ideas, then said he'd discuss the question in a later column. But way back then, twelve years ago, he'd described a remarkable state of affairs:

We were spending twice as much as our peers, but receiving no extra health care!

As you may have noticed, the USA 9400 didn't appear in that column. There was a very good reason for that:

The USA 9400 didn't exist at that time.

Today, that disappeared group does exist—and you'll see them disappeared from every report you read about health care. They weren't mentioned in the Times editorial we quoted in yesterday's report. Rachel would jump off the Golden Gate Bridge before she'd interrupt her corporate clowning with news of this very key group.

Who are the USA 9400? Tomorrow, we'll remind you. They were glancingly mentioned by Bernie Sander's in Chris Hayes' brilliant hour from West Virginia on Monday night—a program whose power was wiped away as cable news dumbly agreed to chase a shiny nothingburger last night.

Twelve years ago, Krugman wrote a series of column designed to help us grasp the current role of the USA 9400. At that time, he may have believed that information could be injected into our discourse.

Sadly, we'll guess he knows better now. Today, as our big news orgs pretend to conduct a discussion of health care, the 9400's very existence is almost completely unknown.

Tomorrow: Meet the 9400


  1. I don't get your obsession with this particular aspect of health care. I'm Canadian. I think people have a right to health care. Even given the warts - and the Canadian system has warts - it is a far better and cheaper system than what Americans have.

    So what? We live in a real world. Our system evolved because one Canadian politician had an excellent idea decades ago that set us on a path to a single payer system. The American system began evolving into an employer based system decades ago.

    If you were starting from scratch, medicare for all might be best, but nobody gets to start from scratch. There is no practical political way to move from one system to another. If the American system was better, it would be impossible for us to switch to your system. We are both too far along our current path to build something entirely new.

    About 175 million Americans are covered in a plan provided - and largely paid for - by their employer. They have better health care than Canadians do. They have forgone pay raises for decades to protect their health care.

    Under what circumstances will these Americans vote for a large tax increase to get a system that will provide better care for all Americans but marginally worse care for themselves? They will never choose that. Even if the results in the long run will be probably better for the country. Obamacare is a kludge that was designed to provide health care to those outside the employer based system. All in all, for a kludge, it isn't that bad.

    The reason we pay so much less for healthcare is that a single payer system forces politicians to address costs or raise taxes. They are forced to ration care (waitlists for non-emergency surgery, for example) and negotiate hard on salary costs. Doctors, nurses and other health care professionals make far less in Canada.

    1. Tom, you're damn right.

      What a lot of people are missing is that this whole kabuki play the goopers are putting on to a large extent has fuck all to do with health care for their constituents, but rather as a stepping stone to their real goal of major tax cuts for the 1%. That's it, end of story.

    2. Paying doctors less is a good thing. Doctors are paid too much in the US; even when you take into account the costs of medical school and liability insurance, they are paid a lot more than doctors in France, Germany, Canada, Etc. If we paid them less (like what they are paid in other countries), large amounts of savings could be passed along to our citizens. Why be opposed to that?

    3. If I was given the option of choosing between my employer-based health care and the Canadian single payer system, I would chose the Canadian system. Since I live close to Canada, I might even be willing to travel their for healthcare. Too bad I don't get to have that choice...

    4. Shorter Tom:

      Don't bother pointing out how bad America's healthcare system is! It'll never change, so don't even try! Just keep getting gouged by powerful, moneyed interests! Shut up, rubes, and let The Man keep his hand in your pocket!

    5. Really hardindr? This is a fair summary of my post?

      I can think of many ways to address the problems. Most of them more or less builds on what is in Obamacare. There are ways to bend the cost curve despite the mess of a ridiculous system.

      I can't, however, see any way you can convince 175 million Americans they should sacrifice their plan and their care and their tiny premiums for the common good. I think the choice is to embrace the Bernie Sanders approach, throw rocks and accomplish nothing or you try to address existing problems one at a time.

      Your mileage clearly varies. Fine. Good luck with the windmill.

    6. I think Obamacare could have put us on some kind of path to a single payer system, and it was worth fighting hard to do so after it was passed, rather than giving up after it was passed, like so many media liberals and commentators did. Bernie voted for Obamacare, so while he would have preferred a different option he supported it.

      To me, even more important than getting a single payer system, which would be great, is sharply reducing he costs of healthcare by ending the patent monopoly system for drugs and medical devices, and ending protectionism for doctors and dentists. Doing both would drastically reduce current medical costs, rather than just reduce further increases in medical costs. For an example about how to accomplish both tasks, consider reading this book:

    7. "I think Obamacare could have put us on some kind of path to a single payer system, and it was worth fighting hard to do so after it was passed, rather than giving up after it was passed, like so many media liberals and commentators did."

      I think you are dreaming. The only reason Obamacare could get off a dime was the first promise made was, "If you like your plan..."

      All the Berniebots managed to do was make Obamacare consistently unpopular across the political spectrum. Instead of defending the law and working to improve it, Sanders piled on the right wing criticisms, labelled it a failure, one that had to had to be replaced with a unicorn.

    8. Well, I guess we will have to agree to disagree on this issue. Not sure if you would call Harry Reid a "BernieBot," though...

    9. Hey Tom, when do you think the Berniebots made Obamacare unpopular- after Sanders declared for the presidency in late April, 2015? Try again. *LINK*

    10. Vox has a good summary of what the inescapable problem is *LINK*:

      [QUOTE] The Affordable Care Act did not aim to regulate health care prices in the United States. Instead, it emphasized reducing the volume of health care in the United States. It tried to get rid of the financial incentives of a “fee for service” system that pays doctors for every test or procedure, regardless of whether it's actually necessary.

      Obamacare had dozens of experiments that aimed to move the health care system to a “pay-for-value” system, where doctors would be rewarded for making patients healthier — not just providing medical services.

      Some of these experiments have been successful. Unnecessary readmissions to hospitals, which the health care law began penalizing in 2013, have plummeted. There is some evidence that these programs have led to slower health care cost growth too.

      None of these changes put the United States on the path to having health care costs more in the neighborhood of Canada or France or other developed nations. That’s just really hard when an MRI costs, on average, $1,119 here — but $503 in Switzerland or $215 in Australia.

      The United States pays health care workers much more too. Nine of the 10 top-paying jobs in the United States are different medical specialties. American orthopedic surgeons earn an average of $442,000 — three times as much as what their counterparts in France earn.

      Regulating health care prices was never a serious part of the Affordable Care Act debate. The Obama administration made a conscientious decision, at the start of its health care effort, to get all major industry groups to stand behind the law — or at least not work against it. Regulating health care prices would have meant that hospitals, doctors, and pharmaceutical companies would all earn less. The idea was a nonstarter.

      But America’s high health care prices are at the core of what Obamacare enrollees dislike about the program. High prices mean high premiums and big bills when customers remain in their deductibles, the two parts of the law that get the lowest favorability ratings from those who rely on the marketplaces for coverage.

      Trump has shown some interest in regulating health care prices, particularly in allowing Medicare to negotiate drug prices. Any serious effort to constrain health care prices would likely need to go far beyond pharmaceuticals, which make up 10 percent of American drug spending annually. To prevent $2,237 bills for Band-Aids, you’ve have to tackle the rest of the health care system — and that is not something either political party has proposed. [END QUOTE]

    11. Mike, they started as soon as Obama started the process. They have taken the same position my entire life; single payer or bust. It busted in the sixties seventies and nineties. As soon as Obama abandoned that idea - even though he abandoned it in his campaign - he was opposed from the left. A lot of the "unfavourable" views of Obamacare in the polling came from the left because it didn't go far enough.

      This allowed Republicans to claim Obamacare was unpopular for the entire Obama presidency. It is ironic that the same left that blasted Obamacare as a corporate sellout is now in a full throated defense of the ACA.

    12. Oh, so it wasn't the Berniebots you were referring to, it's the left. All these years it's been an out of power fringe that's ruined the realization of the benefits promised by neo-liberalism through the dismantling of New Deal/Great Society America- that's quite an explanation you've got there.

      By the way, us Berniebots aren't defending Obamacare. We're still in favor of Medicare-for- all. However, even though we're not in favor of Obamacare, that doesn't mean we want things to get worse. But if doing the right thing is not in the cards at the moment, let's at least hear the Democrats start right now advocating for a next step policy along the lines outlined in the closing comment from that Vox article I quoted earlier:

      [QUOTE] For Democrats, those lessons are relatively straightforward. It is easy to imagine the next Democratic president passing a health care bill that does four things: expand Medicaid coverage up to 200 percent of poverty, boost subsidies in the exchanges, add a public option that can use Medicare or Medicaid’s pricing power, and let people above age 50 buy into Medicare. [END QUOTE]

      As for the role of the leftist, this is close to the way one lefty has put it [LINK]:

      [QUOTE] First, I must confess that over the past few years I have been gravely disappointed with the... moderate... who constantly says: "I agree with you in the goal you seek, but I cannot agree with your methods..."; who paternalistically believes he can set the timetable for another man's [rights]; who lives by a mythical concept of time and who constantly advises... wait for a "more convenient season." Shallow understanding from people of good will is more frustrating than absolute misunderstanding from people of ill will.

      I had hoped that the... moderate would understand that [political processes] exist for the purpose of establishing justice and that when they fail in this purpose they become the dangerously structured dams that block the flow of social progress. I had hoped that the... moderate would understand that the present tension... is a necessary phase of the transition from an obnoxious negative peace... to a substantive and positive peace, in which all men will respect the dignity and worth of human personality. Actually, we who engage in nonviolent direct action are not the creators of tension. We merely bring to the surface the hidden tension that is already alive. We bring it out in the open, where it can be seen and dealt with.
      [END QUOTE]

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  2. The 9400 is the amount we spend per capita on health care in the good old USA!

    1. You will pay 2 Euros for a coke in most of Europe. Things cost different amounts over there because our economies are different. We should be focusing on what care is provided, such as the emphasis on preventive care for all.

    2. I would pay 2 euros for a coke, if it meant I got the healthcare they have in France or Germany. Would probably just switch to tea, though...

  3. Manufactured consent? How about Manufacturing Consent?

    1. Chomsky and Herman blended public intellectual Walter Lippmann's "manufacture of consent" and public relations genius Edward Bernays' "engineering of consent" terms to come up with their title. That leaves a lot of linguistic room for anyone else's formulation. Here's Lippmann in 1921 [LINK]:

      [QUOTE] ...That the manufacture of consent is capable of great refinements no one, I think, denies. The process by which public opinions arise is certainly no less intricate than it has appeared in these pages, and the opportunities for manipulation open to anyone who understands the process are plain enough.

      The creation of consent is not a new art. It is a very old one which was supposed to have died out with the appearance of democracy. But it has not died out. It has, in fact, improved enormously in technic, because it is now based on analysis rather than on rule of thumb. And so, as a result of psychological research, coupled with the modern means of communication, the practice of democracy has turned a corner.

      A revolution is taking place, infinitely more significant than any shifting of economic power. Within the life of the generation now in control of affairs, persuasion has become a self conscious art and a regular organ of popular government.

      None of us begins to understand the consequences, but it is no daring prophecy to say that the knowledge of how to create consent will alter every political calculation and modify every political premise. Under the impact of propaganda, not necessarily in the sinister meaning of the word alone, the old constants of our thinking have become variables.

      It is no longer possible, for example, to believe in the original dogma of democracy; that the knowledge needed for the management of human affairs comes up spontaneously from the human heart.

      Where we act on that theory we expose ourselves to self deception, and to forms of persuasion what we cannot verify. It has been demonstrated that we cannot rely upon intuition, conscience, or the accidents of casual opinion if we are to deal with the world beyond our reach.... [END QUOTE]

  4. In the US we are currently paying nearly double per capita for same or worse care than you are in Canada. If US voters knew that (the whole point of Somerby's post is that they don't), who knows what they would vote for? It's impossible to say now b/c the vast majority of voters have no idea they are being ripped off by the private US insurance "market".

    I am relatively young and have good corporate-subsidized health care. But thanks to Somerby I know I'm being looted, and I would eagerly vote for "medicare for all" (aka public option) were any politician bold enough to offer it.

    The first step to that is for the media to tell US voters that they are being ripped off. Until that happens there will be no political force for change. That is why Somerby keeps coming back to the topic.

  5. ICYMI
    I am reposting a comment.
    These are a bit dated, but I don't think they are completely out of date. The facts are there, and were compiled in real time.

    For those that claim ACA was cobbled together, it was. It's hard to build a first-class edifice in the middle of a battlefield.

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