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Larry Summers’ Shocking Ignorance About Health Care Economics

Lawrence H. SummersJust when I think there aren’t enough reasons to disdain Larry Summers he goes out his way to create new ones.

Last week Summers said it was a good thing America didn’t adopt a universal health care system in the 70’s. When Ezra Klein challenged him to defend this statement Summer could only provide confusing nonsense that got all the basic facts wrong. From Wonkblog:

[Summers -] There are cost problems in American health care and favorable quality issues in American health care. I don’t think it’s clear at all that the nation would’ve been better served by passing the kinds of universal health care bills that were fashionable in the 1970s. I think there is at least a real possibility they would not have contributed to the control of costs —  after all Medicare has not been hugely successful at that — and I think there are real differences in the cultures of physicians in the United States.

Of course my sympathies lie on the progressive side. In periods of conservative rule, a variety of things might have passed if we’d not had stronger safeguards. There was a substantial negative income tax in the late ’60s and ’70s. That would’ve been the opposite direction of welfare reform.

This is some powerful stupid from Summers.

Every country that has adopted a universal health care system decades ago, be it socialized, single payer, all-payer private insurance or some combination of those elements, spend substantially less than the United States on health care. Many countries adopted systems very similar to what the United States was considering in the 70’s around the same time and now spend significantly less. To make the bold claim that what worked in every other country wouldn’t have worked in the United States requires some powerful evidence. Instead Summers makes a vague claim about culture and gets his facts wrong about Medicare.

Medicare has not been a cost control failure. It has done a much better job at controlling cost than private insurance. The main reason Medicare hasn’t done better is because it is limited in size and has to deal with the dysfunctional private system. The CBO concluded that putting people in a Medicare like program would be have been substantially cheaper than using private insurance companies under the Affordable Care Act.

Summers was Obama’s top economic adviser during the health care fight and he apparently doesn’t know the most basic facts about the issues.

Photo by Monika Flueckiger released under Creative Commons License

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at