Friday, June 12, 2009

George Shultz and John Shoven: New Thinking on Health Care Reform

George Shultz and John Shoven presented their ideas for a reform of Social Security and health care in a featured program last night at The Commonwealth Club of California in San Francisco. Shultz, former U.S. Secretary of State and former Secretary of Labor, is a noted economist and chairs the Governor of California's Economic Advisory Board. He is co-author, with Shoven, of Putting Our House in Order: A Guide to Social Security and Health Care Reform. Shoven is a senior fellow at the Hoover Institute and the director of the Stanford Institute for Economic Policy Research.

Noting that the goals of health-care reform should include full coverage and would entail subsidy for people unable to get coverage on their own, Shultz then sought to explain their proposals for reforming these two gargantuan social programs and related industries.

The event, underwritten by Koret Foundation Funds, occurred just a few days after President Obama's Council of Economic Advisors chair, Christina Romer, spoke to The Club on the economic aspects of health-care reform. She argued that the costs of not reforming health care in this country would be enormous, but that the savings from doing it would improve the economy in many ways.

To see Shultz and Shoven discuss their ideas, watch this video of their Commonwealth Club event:


The Mad Hedge Fund Trader said...

Economics professor at MIT and the University of Chicago, former Treasury Secretary and Secretary of State, George has certainly covered all the bases. Now 89, he is the senior statesman and eminence gris of San Francisco, as well as a major philanthropist. When I read his bio, I feel like by comparison, my own life has been spent watching Archie Bunker on TV in All in the Family. I first ran into George in the seventies as the President of Bechtel, and pursued him while in the White House Press Corp. I have since occupied the box next to his in the San Francisco opera, and joined him in several Marine Corps charities. George said that America’s health care headache started in WWII, when wages and costs were controlled, but not benefits. So companies competed for labor by offering increasingly generous, tax free benefits programs. And when something is free, you lose a lot off it, driving total costs through the roof. The end result is large misallocations of resources that you don’t see in other businesses. Private American companies have made possible tremendous medical advances for a profit, and this system should be allowed to continue. But we need to incentivize future advances with cost containment. We need a universal, subsidized plan that heads off intergenerational conflict by not allowing healthy young people escape obligations, nor be denied to older people with preexisting conditions. Allowing consumers to buy private insurance across state lines would be a start. Today your average 65 year old lives for 20 years, compared to 13 years in 1965, and two years in 1900. An equitable system would enable those who wish to continue working after 65, without burdening employers with health care costs, adding $1 trillion to GDP that will help us pay for this all. If George represents the conservative response to Obama’s proposals, then I can see enough common ground for something major to get done this year.

Anonymous said...

I have to say that this lecture given by George Schultz and John Shoven was biased, one-sided, full of inaccuracies and outright false facts. Example Tort reform Schultz was asked if this would help, which he of course said yes, too many lawsuits. He gave no evidence, just his opinion. Yet recent article in the New York Times showed that Texas, which has had major tort reform, has seen no reduction in health care costs. Try having a more balanced panel next time. This was just terrible.

Anonymous said...

I heard the Shultz speech and i was absolutely amazed at his brass for repeating the same old tired arguments that have lead to our present crisis.

Shultz still argues the same old lame 'free market' hypothesis that stands condemned for it's failures in the Financial Markets. It is failing the same way in healthcare.

Shultz offers NO plan for covering the 50million Americans currently not covered. He just mumbles something up his sleeve about 'subsidies'. In fact, the number of uncovered people will increase inexorably as insurance companies continue their malevolent use of 'rescission' to exclude more 'clients' from the care that they have already paid for with their premiums!

Shultz offers NO plan for reducing and eliminating the 20,000 people per year (that we know of) who die from unavailability or denial of medical care.

Shultz offers NO plan for reducing the implacable increases in costs against the GDP, currently at 18% and heading toward 30%. Beyond that, why not 60%, why not 100%. Health 'industry' costs threaten to engulf the entire US economy.

Now Shultz wants to apply his baleful 'free market' fantasies to Social Security, presumably to enrich Wall Street (which has proven flamboyantly inept even at managing financial affairs) because it would certainly ruin millions of Americans hoping to retire. To do that he tells lies, in particular, that SS is going broke, which is totally untrue. SS turns a SURPLUS of about $160million per year, and has a net surplus of $2trillion+. Under the tender ministrations of the circus barkers on wall street that will surely be eliminated and the proceeds pocket by The Usual Suspects while American pensioners go hungry. And SS taxes will rise when the wall street gamblers are in charge.

Privatizing SS will make SS like healthcare: overpriced and underperforming.

SS is a public sysstem that is a huge success.

Healthcare is a private system that is an abject failure.

Compare and contrast.

Dan said...

Umm, Shultz and Shoven are for a voucherized universal health care program. They also says private SS accounts won't do anything for the solvency problem. (Yes, it's solvent for the moment, but absolutely everyone agrees it isn't for the future. It also happens to be one of the most stupidly designed programs I have ever studied.) They think SS is easily fixed with minor changes.

Shoven is also one of the greatest financial economists in the world, and he's an extremely fair, kind man. Also the coolest professor I've ever had.

Read their book.

Post a Comment

Thank you for visiting us. Please post your message. We ask that all comments be considerate of the many viewpoints and backgrounds of our other readers.