Medical Costs

A number of discussions about healthcare in the US note that the US spends more per capita on health care than any developed nation, but far less bang for its buck.  Reading Rajan, I finally found an explanation.  He describes the major and three minor causes.  

MAJOR CAUSES

1) High prices for inputs.  Basically, the shit costs more in the US than in other countries.  A hip replacement is twice as expensive in the US as it is in Canada.  Rajan notes that part of this is caused by higher salaries for doctors.  I'll add that the fact that the pharmaceutical industry has the largest number of lobbyists of any industry is probably related to high costs.  

2) Doctors and hospitals are paid for services provided rather than results.  Basically, people are having unnecessary procedures done because insurance pays the bill, when a smaller amount of care is actually required.  

3) The system adopts innovations, even when there's nothing to suggest that they work.  Rajan notes the use of $100 million nuclear particle accelerators to treat prostate cancer.  The accelerators have been proven very effective at treating rare brain and neck tumors, but not more so than less capital-intensive treatments that are used to treat prostate cancer.  Essentially, they're using a Ferrari for the daily commute when a Civic will do just fine.  

MINOR CAUSES

1) High administrative costs, approximately 10 times as high as other developed countries.  

2) Lack of operational efficiency.  Increased specialization by doctors shortens operation times, leads to better results, etc.  "Even though good surgeons in India earn about as much as surgeons in the United States, the cost of operations is often an order of magnitude lower."  

3) The threat of malpractice suits.  "Expenditures for Medicare beneficiaries in states with larger malpractice awards are about 5 percent higher."  Basically, doctors are recommending additional procedures to cover their ass and keep from getting sued.  

The Future of American Foreign Policy

Foreign policy pundits have been in a little bit of a tizzy lately, partly because Tim Pawlenty made a speech about foreign policy, and partly because our newfound drive towards austerity will inevitably impact the extent to which we meddle in the affairs of the rest of the world.  The debate typically focuses on a spectrum of intervention, with Obama/Bush-style liberal interventionism/neoconservative intervention on the hands-on end of the spectrum and Ron Paul's isolationism on the other end of the spectrum.  


It's interesting to me, because the discussion is always ideological in nature, and side steps the point of foreign policy.  The point of foreign policy is to advocate our self-interest within the community of nations.  The criteria by which to evaluate strategic actions should be as follows:


1) What is the desired outcome?
2) How feasible are options for achieving that outcome?
3) How expensive are options for achieving that outcome?
4) How critical is the matter to national security or strategic posture?


Political ideology will inevitably play some role in the decision-making process.  For example, following 9/11, the purely pragmatic response would be to broaden intelligence operations to gather better intelligence about non-national organizations, coordinate intelligence collection into a more coherent picture, treat terrorist organizations organizations as credible and serious threats to national security, and to gradually kill terrorists and dismantle the infrastructure of terrorist organizations through special operations, tactical missile strikes, economic sanctions against nations and organizations providing financial support, etc.  This response would have amounted, however, to political suicide, given the rage of a wounded nation.  So too was the decision to invade Afghanistan rather than Pakistan, which was a more significant supporter of Al Qaeda, politically oriented.  


The decision to invade Afghanistan rather than engage in a more diffuse counterterrorism policy or invade Pakistan, while politically motivated, were relatively sensible.  The details of the invasion of Afghanistan were not given due diligence with respect to the criterion identified above.  As stated, the desired outcome was a relatively secular, stable Afghan nation that could act as a mitigating force against Pakistani extremism, and which would not provide safe harbor to terrorists.  Because of the flawed calculus of the political actors involved, the feasibility of the course of action ultimately adopted as well as the criticality of the issue at hand were analyzed poorly.  


This failure was largely due to ideological distortions of reality.  To the Bush/Cheney/Rumsfield groupthink, democracy blooms like flowers after desert rain, the judicious use of limited force is an adequate precondition for this democratic bloom, and because of the limited resources required to install democracy, democratic crusades could reform the political and economic landscape of the region.  Obviously, this proved not to be the case, and a particularly expensive misstep.  


The last decade of war should have forced us to rethink our strategic paradigm.  It should be manifestly obvious that democratic institutions cannot be installed, but must rather be adopted by the governed populace.  Because the idea of democracy is generally popular, the installation of democracy by conquest is possible; however, the attempt to do so will inevitably involve the use of a great deal of non-military resources, as well as force the invading nation to deal with millennia of tribal and ethnic tensions, problems with corruption, all the burdens of domestic administration, etc.  It is a time, labor, and money intensive process that is largely dependent on the cooperation of a populace that is most likely hostile to the occupying force.  Accordingly, nation-building should be reserved for the most critical of national-security threats.  


For less critical issues, such as those posed by the Arab Spring and various repressive reactions to populist movements, significantly less effort should be put forth.  Libya, for example, is not particularly critical to our interests.  The choices were realistically limited to "blow shit up and hope for the best" and "don't blow shit up and hope for the best."  The most realistic outcome was a prolonged civil war.  The decision to bomb Libya as part of an international coalition is not particularly flawed, inasmuch as it shows that we are team players and care enough about democracy to bomb a bunch of people.  Our commitment to military action in Libya should have been for only the shortest term, given the high probability of what Thucydides called stasis.  


Libya, however, was a special case.  Limited military action was likely to have significant effects in favor of rebel forces.  In Egypt, the risk of large-scale violence against he population was small, the military seemed disinclined to unconditionally support Mubarak, and there was no realistic chance that military action would have significant benefits.  With countries like Bahrain and Syria, action will most likely lead to nothing more than chaos, wasted time, money, and effort, and regional instability that is unlikely to resolve itself into a favorable outcome.  So why bother?  


Realistically, both liberal and neoconservative interventionism lead the US into easily avoidable quagmires and depend too heavily on the use of force.  Isolationism does too little to defend our interests.  The ideal balance requires us to effectively evaluate and prioritize threats, preferably before they become major problems, and to engage them through diplomacy and humanitarian aid where possible, surgical force if necessary, with war as only a last resort.