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Momma said wonk you out

WILL CHINA HAVE UNIVERSAL HEALTH CARE BEFORE AMERICA?

China just decided to spend $123 billion by 2011 to build a universal health care system for its $1.3 billion people. So they'll likely have universal health care before we will. This American exceptionalism thing is getting out of hand.

But it's worth zooming in on why the Chinese are making this a priority right now: Chinese economists see universal health care as a way to induce consumption and economic dynamism. The Chinese have a high savings rate -- indeed, an absurdly high savings rate, between 30 percent and 40 percent of income -- and one of the reasons is fear of medical expenses. China lacks a safety net, and so people spend less because they need to plan for catastrophe. And if catastrophe doesn't befall, then they've simply spent less. Which is a problem when you're facing down a potentially long recession. And so China is trying to make it safe for its citizens to spend, which means making future expenses more predictable, which means offering health care coverage.

The American situation is, of course, somewhat different. We spend, or at least spent, plenty. But if the Chinese save because they're worried about paying for medical care in the future, Americans yoke themselves to bad jobs or dying industries or hollowed-out regions because they're afraid of losing their health care coverage in the present. That's never exactly been a good thing, but it's more worrying now. We're about to have to adjust to an economy that's not powered by bubble-charged consumption. That's going to force a number of unpleasant changes in our standard of living. But one way to mitigate the harm is to free workers from the more useless drags on their productivity, and the instability of our health care system certainly counts.



COMMENTS

I was wondering when you'd make this post.

I think the point in your last paragraph is an excellent one-- but it also highlights the reasons why I never thought the Obama/Clinton/Edwards plans were good ones-- none of them address the deficiency you rightly raise. If we have a universal health care system based on employer-provided health insurance, the synergy that you're espousing can't be realized. So an Obama UHC plan may be morally right to give almost everyone coverage through some mechanism, but in terms of providing the social safety net that encourages greater risk-taking/entrepreneurialism rather than sticking with bad jobs for health coverage-- the pending health reform plan falls woefully short on this measure.

In short-- you're making an argument for Wyden's plan (much better) than for Obama's.

There you go again, Ezra. Being logical/analytical when people's hair is on fire is just wrong.

The US people want a law repealing disease and death, not some wonky evil liberal plan to make them eat their children.

How can the US enact universal health insurance when the biggest baddest commie country just proved that socialism is sweeping the planet (did I mention RED?)

Who is going to give America to the commies? Yeah, those Obamafascists. (Don't confuse us by saying fascists are not socialists when the word socialist is part of their name: National Socialist Obamafreaks. )

The banner of freedom won't wave until every American takes responsibility for personnally fighting cancer in the streets - literally.

[/end of snark for the clueless]

Man China must really value it's people. At $1.3 billion per person it'd have like $1.69 quintillion in human capital.

Are you sure that the Chinese save a bunch because of medical fears? Me, I wonder whether it's the standard rapidly-industrializing-country-shoves-a-ton-into-savings pattern that we saw with the Soviets. See Krugman's book "Pop Internationalism" for more on this. The upshot is that everyone feared the Soviets' rapid economic growth, but that growth was unsustainable. Productivity wasn't increasing; it's just that capital was getting thrown at industry as rapidly as possible.

I don't know whether this is actually what's happening in China, but it's my null hypothesis.

Ezra, I have always thought that one of the problems with our current health care 'system' is the job lock it creats and the creativity/productivity drain associated. Have there been any studies to back up this intuitive claim? I am not aware of any, but sure someone must have studied this......

Well, in China they jail dissenters. Really bad doctors likely get a bullet to the head, too.

Maybe we should just start with the "Fairness" Doctrine and go from there. Maybe we only need to be a little more Chinese to do what they do?

disagree with post.

China has a health care crisis about as severe or maybe a little worse than we do here. Decent health care is remarkably difficult to get if you're not a foreigner or a Chinese living in one of the top 4 cities. They practice the same fee-mania that we do here, to even worse effect there, i.e., do you want the real thing or a placebo?

I *think* this is a "we should be seen to do something activity" by the Chinese leadership and not a serious attempt at remediation. There doesn't seem to be evidence of the necessary structural changes, and the body that passed this bill is rather notorious for unfunded mandates. That $123 may simply just be majority demands that provinces fund health care more, with little additional money for the pot.

I was rather surprised to find when I lived there that China had no universal health care, what with being commies and all that.

While I agree with your actual argument, I work on this issue peripherally and should mention that "universal health coverage" means a lot less in China than here - it's the provision of the most basic of healthcare to all Chinese. In a sizable proportion of China, proper infrastructure doesn't even exist (rurally) or proper services are unaffordable to much of the population (both rural and urban residents).

Shah8: Actually, their public health insurance system exists in some detail, and has been growing for some time; it's just being accelerated by this spending. It wholeheartedly incorporates moral hazard reduction theory, with individual-linked accounts that can both be exhausted if you use too much care. "Universal" would be a bit excessive a term even if it covered everyone.

David Broudy: They had more-or-less universal health care back when it was cheap.

Oh wow, China did it. Yes, they should be our model. How about the one child policy, and the "harvesting" and sale of organs from dissidents? Let's do what the communist Chinese do. How about the "jetplaning" of dissidents on stage at public rallies? Fucktard.

Good post Ezra,

But America's appetite for stupidity is too great to be shamed into seeing themselves honestly.

Minivet:

My impression was that what you were talking about was classic substitution of health insurance for health care. I was saying that this doesn't work because the insurance doesn't really pay enough for health care and that dispensers of health care simply sees this as an opportunity to exercise more rents on medicine and knowledge.

shah8: I see what you mean there, but my impression from what I hear is that the insurance is indeed letting people consume more health care. Not enough, to be sure, the problem of the gap between more insurance and more care still exists, but things are changing structurally nevertheless.

Let's definitely adopt their transplant program. People given the death sentence have organs immediately removed and sold. There is reasonable suspicion that organs are sometimes removed from live, doomed people. Hey, that would help people in need of transplants! Also, the Chinese government lies notoriously, so their claims about healthcare in that country are not worth much. What about healthcare in Yemen? Would that be better than here, and worth emulating?

Unless the Chinese are stashing their "absurdly" (is there really such a thing as saving too much??) large savings under a mattress, then the money is already in circulation within the economy. Money that is invested or in savings accounts is being lent out and put to good use. It's not just sitting around gathering dust.

And funny that fear of medical expenses doesn't induce Americans to save more. Perhaps the Chinese are just a wise and thrifty people and haven't fallen for "spend yourself rich" theories.

Scott,

“Have there been any studies to back up this intuitive claim?”

You will never see any studies because it is not true. Just thinking through it shows how illogical the concept of job lock is. Who does it even apply to? Vast majority of large companies and just about every public entity offers benefits. So anyone working for any government or company with more then 50-100 employees has nothing to worry about.

It must be people working for small companies looking to leave and go to another small company then? Or is it people looking to start their own business? Either way your talking about a small group of people. With the passing of HIPAA and guarantee issue for employers under 50 lives that’s not an issue either.

Any show who these poor job locked people are and where they are trying to go that can’t offer them insurance.

And don’t let them scare you with the only 40% of small businesses offer insurance, millions of small businesses are part time meaning they have day jobs that provide insurance. Many have spouses that cover them. When you office only has 2-5 people it’s very possible everyone has coverage elsewhere or decided it was cheaper to buy individual plans then purchase expensive group plans driven out of range by regulation.

Did Anonymous forget his meds today?

Wait. I thought universal health care was part of the commie plot to take over the world. The Chinese don't have it yet? They need to brush up on their commie skills. I guess this is a step in that direction.

The biggest problem is they keep using the word "affordable" in health care reform. That means we still pay for rates regardless.

If France, Canada, and Britain can offer fair universal health care we have no excuse not to be able to.

Our government has been treating are veterans and citizens like crap and I'm tired of it.

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About Ezra Klein

Ezra Klein is an associate editor at The American Prospect. An archive of his articles for The American Prospect can be found here.

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