PRESS RELEASE: Economists decry political attacks, urge serious exploration of universal, publicly financed health care



Economists decry political attacks, urge serious exploration of universal, publicly financed health care

Friday, February 26 – Senator Bernie Sanders’ proposal for universal, publicly financed, single payer health care has prompted a raucous public debate among economists.

The debate rose to a crescendo last week when four former heads of the Council of Economic Advisors (CEA) and economist and New York Times columnist Paul Krugman lashed out at Sanders and economist Gerald Friedman (a Hillary Clinton supporter who conducted an independent analysis of Sanders’ health care plan) in what many are calling a dishonest political attack.

The four CEA chiefs criticized Friedman for making “extreme claims” based on “no credible economic research,” and Krugman followed suit with a stinging column calling Friedman’s work “horrifying,” “embarrassing,” and “voodoo.” Their criticism focused on skepticism of Friedman’s projection that universal health care and other public stimulus programs would induce the economy to grow significantly in the coming years.

As soon as the five economists lashed out, other economists rushed in to defend the integrity of Friedman’s work, calling out the five economists for what they saw as an attempt to smear Friedman and Sanders, and pointing out that they had done no rigorous economic analysis on which to base their claims. A number of economists are urging serious exploration of publicly financed universal health care, arguing that such a system would be more sensible, pragmatic and ethical than the current for-profit insurance system.

James Galbraith, a former Executive Director of the Joint Economic Committee, wrote an open letter to the CEA chiefs calling their accusations “not fair or honest.” Galbraith continues, “What the Friedman paper shows is that under conventional assumptions, the projected impact of Senator Sanders’ proposals stems from their scale and ambition. When you dare to do big things, big results should be expected. The Sanders program is big, and when you run it through a standard model, you get a big result.”

Ron Baiman, an economist at Benedictine University, wrote on his blog that “the CEA’s appear to believe that their status entitles them to a blanket dismissal, without a shred of argument or analysis, of a standard economic analysis of a raft of economic proposals the scale and scope of which have not been seen since the New Deal.”

Dean Baker, co-director of the Center for Economic and Policy Research, says, “It is understandable that those opposed to Senator Sanders’ candidacy would want to belittle his health care proposal, but it would be more helpful in advancing health care policy if we could have a serious discussion of why the U.S. health care system costs twice as much per person as the average among other wealthy countries.

A number of economists have pointed to the high costs and inefficiencies inherent to the for-profit insurance system.

Katherine Moos, Economist and Visiting Faculty at Sarah Lawrence College, says, “It is well known that the U.S. health care system is fragmented, costly and inefficient. Single payer, publicly funded health care would expand access while reducing wasteful and excessive spending.”

Patrick Mason, an economist at Florida State University, says that for-profit employer-sponsored insurance “is an inefficient and costly approach to providing health insurance.” He points out that a publicly provided national health care program would be much more efficient than the current system both because it would considerably lower administrative costs and because by expanding health care access to everyone, it would create a healthier population with fewer costly illnesses.

Robert Chernomas, Professor of Economics at the University of Manitoba, says, “The US has by far the most expensive health care system in the world, the worst health indicators among wealthy industrialized nations and is the only industrialized nation without some form of truly universal health care. The overwhelming findings of the New England Journal of Medicine, the Journal of the American Medical Association, the Canadian Medical Association Journal and the Harvard School of Public Health is that private, for-profit health care is more costly, of lower quality, provides lower patient satisfaction and has a higher mortality rate than not-for profit health care.”

Chernomas asks, “Why spend $1.50 on inefficient private health insurance, ineffective and more costly for-profit hospitals and a poorly regulated pharmaceutical industry when for $1 or $1.10 you can get higher quality universally accessible health care paid from taxes and protected by democratically elected governments?”

Other economists argue that because health care is not only part of the economy, but also a fundamental human right, universal, publicly financed health care is both good economics and a moral issue.

Mark Paul, a PhD candidate in the Department of Economics at the University of Massachusetts Amherst says, “The current health care system is based off bad economics. Single payer health care in the United States can save billions of dollars. Not only are the economic numbers in favor of a single-payer system, but more importantly, it would save lives.”

Terrence McDonough, an economist at the National University of Ireland Galway, says, “Universal single payer health insurance is the only way forward for the United States health care system. Health care is a human right and should not be rationed according to ability to pay. For this reason universal coverage is the only ethical option.”

A number of economists contend that the reason there has been so much resistance to a policy that would both cost less and produce better health outcomes is that powerful health care companies have overwhelmed the political process.

Jose A. Tapia, an economist at Drexel University, says, “The only explanation of this absurd situation is the strength of the forces opposed to single payer national health care. Huge private and public costs of health care in the United States flow into enormous profits for those companies and individuals who benefit from the health care business.”

Paddy Quick, Professor of Economics at St. Francis College in Brooklyn, says, “The need for a fundamental restructuring of the health care system of the United States is clear. The opposition comes from the many insurance, pharmaceutical and other health-related corporations (as well as the many so-called ‘non-profit’ institutions) who profit from the current system. In this they are supported by those whose income enables them to purchase the ‘best that money can buy.’”

Yavuz Yasar, Associate Professor at the University of Denver, says, “What makes the single payer plan radical is the existing wasteful, outrageously expensive and inefficient U.S. health care system that helps health insurance firms, pharmaceutical companies and providers to increase their profits at the expense of ‘we the people.’”

Baiman too sees the current debate as more a political debate than an economic one. “No one assumes that Bernie’s economic program will be passed as currently conceived. The fate of these proposals depends on the power of the ‘political revolution’ that the Sander’s campaign is leading. … This is not a technocratic economic debate. It’s a political and ideological debate.”



Ben Palmquist

National Economic and Social Rights Initiative

(212) 253-1710 ext. 304, ben at nesri . org