The Issue that Surrounds Everything

One of the things we're going to need in the future is a lot more entrepreneurial activity. The old economy, based on gigantic and ever-increasing flows of energy and materials (and wastes) is grinding to a halt, and won't be coming back. In the future, there will be a lot fewer massive institutions employing hundreds of thousands of people in big bureaucratic kingdoms, with benefits. People will have to make a lot more of their own livelihood, and they will have to do so much more locally.

One of the big barriers to the kind of innovation and entrepreneurial behavior we need is our weird system of health insurance that's tied to employment rather than citizenship. By tying access to health insurance to working for someone else -- and typically, that means a very big someone else -- we discourage people from creating precisely the kind of ventures that we will need the most of in the future: small, local services that are aimed at meeting each others' basic needs.

People in the health insurance industry are, no doubt, occasionally wonderful people -- just like some of the people who sell guns and drugs in the black market are sometimes wonderful people. But their industry is a parasite, consuming 30% of our sky-high health care costs and producing exactly no health benefit. In fact, our insurance system is one of the root causes of our insanely poor overall rankings on national health indices: we are far and away #1 in spending but about 35th in health results. A good deal of that is due to the fact that we treat health care like a non-essential, and we allow other people do without access to it (so long as we ourselves have access). Thus, people don't follow good health maintenance and illness-prevention strategies and the giant money-sucking leeches in the health insurance biz don't want to pay for prevention because there's no guarantee that the eventual savings will accrue to them instead of their competitor.

Truly an insane system, but one that is so fantastically profitable for a few that it will not die easily, despite the huge amount of suffering and needless waste that it inflicts on us.

Socialist Health Plan? In Norway, Obama's Plan Not Even Close

If Michael Steele and the Republicans really believe that President Obama is proposing a socialist health plan, they need to get out more.

I've just returned from a research trip to Norway, where their universal health system really is socialist. It's also much less expensive than the current U.S. system, so maybe the Republicans would like it if they checked it out. The non-socialists in Norway support it because it works so well, especially compared with "the bad old days" of private medicine, when even the doctors' association advocated for socialized medicine as the only affordable way to make quality care available to all Norwegians.

One reason Norwegians like their system is that it's pro- economic innovation because it's not tied to the employer. Norwegians are free to change jobs for more challenging opportunities, or try their wings as entrepreneurs, because they don't have to worry about insurance - it's with them wherever they go. Economist Jonathan Gruber of MIT is one of many economists who believe that U.S. employer-tied health insurance is a drag on progress. But Obama's plan accepts the status quo even though it might not be affordable.

Norwegians like their system because it cuts red tape. The patient-doctor relationship isn't complicated by multiple insurances; if you need care, you get it as a matter of right. No bills to pay, no plans to juggle, no worry about your dependents, and no worry about your becoming a burden to your children.

Because Norwegians are practical, they enjoy saving money for quality health care. On a per capita basis, Norwegians spend $4,763 per year, and cover everyone, while U.S.'ers spend $7,290. By various standards of health quality, like life expectancy or rate of preventable deaths, Norway does better than the U.S. One key measure is physicians per capita: the U.S. has 2.43 physicians compared with Norway's 4 doctors per 1,000 population, even though Norway spends a third less of its Gross Domestic Product on health care than the U.S. does. (These numbers are from Bruce Bartlett, Forbes magazine columnist who was a former U.S. Treasury Department economist.)

While in Norway I did hear complaints - Norwegians famously believe everything can work better than it does - but I didn't interview anyone, from left wing to right wing, who would change the basic system. Maybe it's time for U.S. politicians to learn from what other countries are doing right.