(This is really two posts: one on health care and one on taxes and spending, but they are tied together by the theme of ideological consistency — or a lack thereof.)

Health Care

On his show Real Time yesterday, Bill Maher said this: “A sixth of our economy is based on people getting sicker.” He also said, “People are sick and we make money off sick people.”

That struck me as an extremely pessimistic, upside-down view of health care. In Bill Maher’s world, money spent on health care is based on people getting sicker. In his world, it’s a giant corporate conspiracy, whereby Big Agriculture produces horrible food products that we stupid Americans ingest, some other cabal of corporations figure out a way to get us to stop exercising and become couch potatoes (not sure who does that – but I’m sure Sony, Microsoft and Nintendo are all involved), then Big Pharma comes in and gives us pills to fix everything. Everybody makes money in the process, while Americans just get sicker. In this pessimistic world view, it’s obvious that we would want to reduce health care spending. I have a more optimistic view of our health care system, where drug companies find cures for diseases that allow us to live longer, more productive, more enjoyable lives. Yes, providing statins that can reduce cholesterol levels might reduce a person’s incentive to exercise — but providing unemployment insurance reduces a person’s incentive to find a job and we have no problem with that. It seems that if Bill Maher had his way, we wouldn’t spend any money on health care and people would just have to eat better and make smarter health decisions. Fine, Bill — just don’t get sick. And be sure not to age, okay? (more on this later)

Taxes and Spending

On that same show, Bill Maher brought up a speech made earlier this week by Sarah Palin. In it, she said that if we want to create jobs, we have to reduce income taxes, reduce payroll taxes, reduce capital gains taxes, and eliminate the estate tax (the death tax if you’re a Republican). It’s the classic supply-side argument that has been shown to increase labor supply when it has been done before. The debate is usually about whether doing this will also increase tax revenues, and that depends on which side of the Laffer curve we are on. Paul Krugman had a different  take on this proposition, ignoring the tax revenue question and basically saying it would result in less employment: “What she’s saying basically is we need to do more of what George W. Bush did.” He goes on to say this is like a witch doctor making a sick patient bleed more to cure him, wonders why we would want to continue the policies that led to the worse employment-creating presidency since Herbert Hoover (patience, Paul –just wait until Obama’s done with the economy) and argues that instead the solution to our current unemployment situation is an increase in taxes. Many macroeconomists, including Richard Posner and Krugman himself, have gained a newfound respect for Keynesian economic theories as a result of our current economic situation. But even Keynes himself would have a really hard time rationalizing how higher taxes would increase output in the short run, but somehow Krugman thinks it can happen. The problem I have is that I’m not sure how that squares with what he’s written already about this financial crisis. For example, in this article, he argues that cutting spending during a crisis is an absolutely crazy, horrible thing to do — yet somehow raising taxes is the right thing to do, Paul?

I also find it laughable that people like Krugman will point to the Bush economy and say “he did X, and it didn’t work out well, so it would be insane to do even more X,” as if X were the only thing that happened in 8 years. Nevermind 9/11, wars, increased globalization, and a variety of other factors — it’s all because of tax cuts. Yet even if this were true, this is a new philosophy for politicians (admittedly, Krugman is not a politician, but when your weekly column consists entirely of bashing Republicans, you’re flirting with the label). Usually, their strategy is: spend money on X, and if that doesn’t fix the problem, spend even more money on X. Democrats have been fighting the “war on poverty” for decades and aren’t getting anywhere. Republicans have been fighting the “war on drugs” for just as long and with just as much success. We keep increasing spending and government control over education, and our country’s educational performance continues to get worse and worse, yet the solution proposed by Democrats  is to spend even more. (This includes Michael Moore this week on the Howard Stern show — no transcript available unfortunately, but I was listening to the show and heard him say that the problem is we don’t spend enough money on education.)

If spending increases are good, then tax increases should be bad. If “doubling down” on wars or tax cuts is bad, then doing so on education should also be bad. There seem to be no principles left in either party — it’s just bashing the other side and trying to get votes. How about a little ideological consistency?

Back to Health Care

Here’s where, as much as it may pain me to do so, I am going to give Bill Maher some credit. On his show last week, he slammed Obama for not asking Americans to sacrifice anything. He said that those who chastised George Bush for not asking Americans to sacrifice after 9/11 (remember that he basically said that if we don’t keep shopping, the terrorists win), should also be chastising Obama for not asking Americans to make any accomodations on health care. If this is in fact a crisis, as we keep hearing from the President, then he can’t come out and say “we’ll pass health care and you can keep your doctor and keep your insurance and we’ll cover everyone and it won’t increase the deficit and everything will be perfect, I promise.” (Not an actual quote, just my paraphrasing.) Maher argued that Obama needs to come out and tell us that we can’t keep doing what we’re doing, and that we will have to sacrifice. We need to eat healthier, we need to exercise more, we need to stop smoking — those 3 things account for a significant part of our health care spending and are 100% preventable.

I don’t agree with Bill Maher on much, but I’m completely behind him on his proposition. The only problem is that if we were to do all of that, health care spending in our economy would likely increase, not decrease. Studies have clearly shown that the longer people live, the more expensive each year of routine health care becomes. We’ll spend a lot more money on expensive procedures like hip replacements, knee replacements, bypasses, etc. for people who used to die of a heart attack at age 50 but now have statins, read nutritional information on their food, and exercise regularly. The number of hip replacement surgeries is expected to double from 2002 to 2015, and only 5-10% of them are performed on people under age 50 (stats). Seventy percent of knee replacement surgeries are on people over the age of 65, although as the technique become better, we’re starting to see more of them performed on younger people (stats). Hip replacements cost $39,000 on average and knee replacements cost $35,000. Expect the cost of health care to continue to increase as we live longer lives. These cost increases are obviously not due to people being sicker. They’re due to an aging of the population and improvements in technology and surgical techniques that allow more people to qualify for the surgery than before.

Governor Pawlenty made waves about a year ago when he proposed that he wanted MnSCU to have 25% of its credits generated through online courses. The current amount is 9%, so he wants to almost triple online enrollment in 7 years, quite a hefty feat. Yet there are no real guidelines passed down from MnSCU or SCSU about what an online course must contain. There are some outside standards (the one I am going to be using is by Quality Matters), but nothing from the administration. As educators, we like flexibility and academic freedom, so I appreciate nobody telling me exactly how an online course is supposed to look. However, a mandate for increased production of something without any standard on quality will likely lead to a reduction in quality, and some of us in academia are concerned about that.

I’m in the middle of a redesign of the online principles courses in the Economics department to take advantage of new technology and a new and growing understanding of what it takes to create a good online course. There are many issues to consider and I’d bore you if I went into them here. Let’s just say that I have a very good vision for what I want the online courses to look like and am trying to make sure I can get the technology to do it in a way that is easy for students to follow. But as professors, sometimes we find that our vision of a course conflicts with what students want in a course. In that kind of a disagreement, the professor usually wins, but sometimes the class as a whole loses as a result. Our job is not an easy one: to balance our professional expectations for what goes into a course with an understanding of what our students will and will not do; to push students to do work we know will be beneficial for them, making them live up to our expectations, without pushing too hard and risking a revolt.

For example, I would love it if all my students read their textbooks before class. It would allow me to spend more time on applications and extensions of the concepts and less time going through the basics. A few years ago, I started using pre-lecture quizzes to force students to read the book before lecture. The questions weren’t too difficult, but you had to read the chapter if you wanted to pass. I eventually came to find that students just skimmed the book  or searched through the book to find the answer to the question without really paying attention to what they were reading. The pre-lecture quiz performance was never good. Students did the quiz but didn’t learn much, so I had to go over the basics anyway. My students told me, through their behavior, that they’re simply not going to read their textbook before lecture, since they felt I did a good job communicating the concept in lecture and they didn’t need to read the book. The pre-lecture quiz idea was great in theory but just didn’t work well in practice. (I got the message, loud and clear, and have dropped the idea from my courses.)

The purpose of this post is to solicit feedback from students about online courses. For those of you who have taken online courses: what made it a good or bad course? Why did you choose the online course instead of a lecture-based course: convenience or a perceived lower level of difficulty? Was it easier or harder than a lecture-based course? Was it just as educational as a traditional lecture course would have been? If you had a bad experience, what could your professor have done differently to have made it better for you?

Please share your thoughts so that I can understand why students take online courses and what makes them successful from a student perspective. Our goal is to make our department’s online courses as educational and informative as a traditional lecture course — I’m just trying to figure out what that means for students.

I’ve been so busy at work that I haven’t written anything in over a week, and I have to rectify that. I’m starting to get tired of all the health care and budget deficit discussion, and I’m supposed to be relaxing this weekend so it’s time for something a little lighter. I thought I’d share one of my favorite stories.

My good friends Dave and Kim have a timeshare and can use their points just about anywhere they want. In June 2004, they decided to spend a week in Cancun and invited me along — most of the couples I know have found that I usually do a pretty good job playing the third wheel and I don’t mind it at all. After a few days of lounging in the beach, drinking demasiado tequila, and swimming with dolphins (everyone should do that at some point in their lives), we decided to get a little culture.

We set off on a day tour to Chichen Itza with a crazy bus driver who almost ran us off the road a few times. Three hours and a few mild heart attacks later, we set off on our tour of the Mayan ruins. It was both awe-inspiring to see what that civilization accomplished, and haunting to learn of the savage nature of some elements of the culture. The highlight, of course, was the pyramid, El Castillo. Dave and I agreed we would run up the whole thing without stopping — I still remember to this day that there were 91 steps. At the top of the pyramid, there is an inner room but it’s dark, cramped and pretty creepy so you take a quick walk through. Most people just hang out on the outside rim, which is about 6 feet wide, and survey the landscape below. There is room for a few dozen people up there, butit was a hot day and those 91 steps aren’t easy for all the overweight American tourists, so it wasn’t crowded. Maybe a dozen people were up there with us. You get to the top, look around for five minutes, and make your way down. Carefully.

In the picture linked, if you stand at the edge of the left back corner, you can see the entire ruins in the background. It’s a popular place to get your picture taken. When I got to the top, I looked over and saw someone I thought I recognized. He was waiting for a few people to get their picture taken so he and his wife could take each other’s pictures. He looked a lot like a guy who played on my softball team in St. Louis at the time but I thought there was no way that could be him. Then I started thinking. I remembered that he missed our last game because he was getting married and was then going on his honeymoon. I wasn’t sure where he was going on his honeymoon but Cancun seemed like a likely destination. I couldn’t remember his name – everyone on the team called him by his last name and I couldn’t remember that either. I told Dave, “I think I know that guy,” and he said there’s no way. After a minute or two, I finally remembered his name, so I walked over. ”Matt?” He shook his head in disbelief. “Switz?”

Neither of us could believe that in the middle of the jungle, on top of an ancient Mayan pyramid with only about 10 people on it, someone we knew was there at the same time. I told him and his wife that they had to let me take a picture of them, since they each had only a solo picture taken by the other. Still a little shocked at how surreal the situation was, they of course agreed. I hope they have that picture hanging somewhere in their house now so they can tell that story.

It remains the strangest thing that’s ever happened to me. It just goes to show that, as trite and cliche as the saying may be: it really is a small world after all.

By now, we all know that President Obama said he would not pass a health care reform bill health insurance reform bill if it adds to the deficit. And one significant problem is that the Congressional Budget Office (CBO) has scored the reform that has made its way furthest in the political process (H.R. 3200) and said it would add $1 trillion over the next 10 years. That has left some House Democrats angry, saying that the CBO has not accurately accounted for the savings that will come from increased preventative care.

Unfortunately for them, the facts don’t support their claim. CBO Director Doug Elmendorf cited a study from the New England Journal of Medicine saying that in 80% of preventative care programs, the costs of treatment actually increase. A new article in the journal Circulation says that increased diagnosis and treatment of diabetes actually costs more than the alternative.

How can prevention of disease be more expensive than treatment? Two reasons. First, you have to test a whole lot of people before any of them show symptoms and many of them would not get the disease anyway, so that costs money. Second, because unfortunately it is cheaper to let someone go undiagnosed with diabetes and die prematurely than to spot it early and pay to treat them every year they live, especially when that treatment will make them live longer. As Stuart Varney essentially put it this morning: it’s cheaper to have someone drink a fifth of Jack Daniels and smoke a carton of cigarettes every day and die at 50 than it is to have them live long lives and have to spend money on them for 90 years. If you want to save on health care costs, encourage unhealthy behaviors and people die sooner, as health care costs rise significantly the older a person becomes.

That sounds absolutely horrible, right? Well that’s what happens when all you focus on is costs. When conservatives get up in arms over health care costs in this manner, they’re falling victim to the same distorted logic that liberals use when they say that our health care costs too much. Not all health care costs are bad — when we save lives with new pharmaceuticals and surgery techniques, and prevent disease with new methods of testing and diagnosis, that costs money. But aren’t those things good?

(Aside: We have a lower life expectancy in the U.S. than in many countries, but much of that is due to violent crime and automobile accidents, not health care — adjusting for that, we perform much better, and it’s likely due to our advances in medicine. If memory serves correctly, about 80% of Nobel prizes in medicine in the last 30 years have been given to Americans.)

When we make people live longer, that costs more money too. This is worsened by our Social Security system: since the program was created, life expectancy has increased by more than 10 years, yet we have only pushed back the age at which you can receive full benefits by 2 years. Old people keep living longer and they retire at the same age, so that increases the burden on everyone else. But despite this increase in costs, my questions remain: is the cost of health care the only thing that matters? What about the benefits?!

I remember a study I read about a few years ago which stated that the increase in life expectancy that has occurred in the last century has increased the overall benefits of the average person by over a million dollars. You live longer and have more health care costs, sure — but you have more time with your family, your quality of life increases, and we’re all better off as a result. Democrats say “we spend too much on health care” despite the fact that this spending ends up making us better off. (Here’s a study saying this very thing about the US, and another one saying the same thing for Japan.) And now Republicans are saying that spending more money on prevention is bad just because it costs more, ignoring the potentially beneficial effects on quality of life.

I think  Charles Krauthammer puts this in its proper context: prevention is not the magic bullet that some Democrats think it is, and it has its own costs – but it still can be a good thing, and worth paying if it means people live longer, healthier lives. A little more emphasis on the benefits of health care, not just the costs, would be a refreshing change — from both sides of the political spectrum.

P.S. I think there is an analogy here to the global warming climate change debate: some would argue that we should focus on prevention regardless of the cost, and impose taxes on carbon and other costly regulations, while others say we should focus on treatment — work to adapt to future climate change if and when it happens with economies that are stronger and better able to withstand fluctuations in climate.