Robert Wright notes that "we already ration health care; we just let the market do the rationing." This is a true point made by the proponents of health care reform. But I'm not sure why it's supposed to be so interesting. You could make this statement about any good:
"We already ration food; we just let the market do the rationing."
"We already ration gasoline; we just let the market do the rationing."
"We already ration cigarettes; we just let the market do the rationing."
And indeed, this was an argument that was made in favor of socialism. (No, okay, I'm not calling you socialists!) And yet, most of us realize that there are huge differences between price rationing and government rationing, and that the latter is usually much worse for everyone. This is one of the things that most puzzles me about the health care debate: statements that would strike almost anyone as stupid in the context of any other good suddenly become dazzling insights when they're applied to hip replacements and otitis media.
The rationing is, first of all, simply worse on a practical level: goods rationed by fiat rather than price have a tendency to disappear, decline in quality, etc. Government tends to prefer queues to prices. This makes most people worse off, since their time is worth much more than the price they would pay for the good. Providers of fiat-rationed goods have little incentive to innovate, or even produce adequate supplies. If other sectors are not controlled, the highest quality providers have a tendency to exit. If other sectors are controlled, well, you're a socialist, and I just agreed not to call you a socialist, because you're not a socialist.
But there is also a real difference between having something rationed by a process and having it rationed by a person. That is, in fact, why progressives are so fond of rules. They don't want to tell grandma to take morphine instead of getting a pacemaker. It's much nicer if you create a mathematical formula that makes some doctor tell grandma to take morphine instead of getting a pacemaker. Then the doctor can disclaim responsibility too, because after all, no one really has any agency here--we're all just in the grips of an impersonal force.
But this won't do. If you design a formula to deny granny a pacemaker, knowing that this is the intent of the formula, then you've killed granny just as surely as if you'd ordered the doctor to do it directly. That's the intuition behind the conservative resistance to switching from price rationing to fiat rationing. Using the government's coercive power to decide the price of something, or who ought to get it, is qualitatively different from the same outcome arising out of voluntary actions in the marketplace. Even if you don't share the value judgement, it's not irrational, except in the sense that all human decisions have an element of intuition and emotion baked into them.
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Unless rationing cards become tradable, market rationing also has the advantage that you can get more of one thing by choosing to get less of something else. I doubt I will be able to get better health care by buying less gasoline.
Of course not. Buy less gas, you pay less tax, there are less funds for health care.
Why not? You could either buy health insurance or gasoline with the same dollars. You could also buy an HMO and have more gasoline, or a PPO and have less. Same with deductibles, etc.
Of course, you don't directly trade dollars for health care, but that's because most people choose to buy insurance instead, because we like to smooth our cash flows.
We are thus insulated from cost choices to a degree that is probably unhealthy, but at least we have some choice; gov't will simply decide for us how much to allocate, with all the effects Megan describes above.
This probably helps explain why Americans get the best medical treatment: people were willing pay higher premiums to have more MRIs than anywhere else, better cancer screening, better research hospitals, better drug development. Governments were not.
To paraphrase H.L. Mencken:
A free market is a system where people can get what they want-and get it good and hard.
In other words, if we spend more on something than we used to, its probably either because its more scarce or because we like to consume more of it now. I doubt the first option applies to healthcare, so I'm going with the second.
Love it!
I'm not sure what price rationing has to do with our current system, which provides care to privileged groups (the elderly, those employed by corporations, etc) without price and the rest at an unknowable mystery price.
I don't think anyone has accused the US of having a good healthcare system in the last 30 years or so. They're just saying the fully public system would make it even worse.
No one provides care without price - private insurance companies do evaluate the cost and effectiveness of certain treatments, drugs, and devices. They are doing more of these analyses each day. Medicare is known to benchmark some of its pricing, particularly for product reimbursement, from insurace companies.
The theory is that if you take the profit incentive away from private insurance companies by crowding them out of the market, or punitively regulating them, the only semblance of a price discovery mechanism in the current medical care marketplace will go the way of the dodo. Medicare/Medicaid/Whatever-New-Govt-Plan will then rely on a) post-hoc claims analyses, b) scientific panels, c) lobbyists and other politically connected voices to determine their reimbursement strategies (not to say they don't do this already.)
No pricing mechanism can really be efficient in a third-party payer system. However, if you take profit motivation out of it, and only leave cost-control motivations plus political incentives, you can probably expect a lot of bad decisions to be made.
Good post!
maybe the reason liberals find this point so "interesting" is because many conservatives -- those who apparently don't find this as obvious as you do -- say that we need to fear health insurance reform because it would bring about rationing.
That's because we call government rationing "rationing" by convention. This is no more useful than saying that we didn't have rationing in WWII because after all, before the war, the market was rationing too.
Also, there is a difference to rationing based on what I have or don't have (money) versus what some damn bureaucrat THINKS I don't need or don't deserve. I can fix the money issue (save, get a loan, rob a bank...whatever). I can't fix some elitist boob's opinion of me.
If you get cancer, and some damn insurance industry bureaucrat has previously decided that you are not a good insurance risk, you are going to need to rob a lot more than one bank to pay for the treatment, unless you as a medical consumer decide not to purchase the treatment.
Ah, but you missed my point. Currently, if I have the money, I can get the help.
But when rationed by a decree, if, for whatever reason (my age, I smoke, I am overweight, I am a man, I am white, whatever other prejudice used to deny benefits), the MAN says I am not worthy, then I am screwed. As I said, based on price, I have the chance to fix it. Based on some law / regulation / power tripping pol, then I just get to take a pill and die with dignity.
and where is anyone proposing rationing by decree that would prevent you from buying the treatment you desire?
Because somewhere along the way, some politician is going to claim that people who buy the treatment are "jumping" the queue ahead of those who can't afford it and consuming all of the rare resources associated with the treatment, leaving little or nothing left for the masses. Then they'll get a law passed to prevent it.
So you acknowledge that nobody is actually proposing any rationing--you just think someday somebody might? Is that really relevant to current health plan issues? Or is "rationing" just a scare-word to derail rational thought?
Currently, the way "price rationing" works is as follows: If your insurance company decides that you are worthy of treatment, you can get it at a price that you can afford. If they don't, you can get it at a price that you might be able to afford if you sell your house.
I don't see how the proposed system is any different from that, except that you might actually have a choice of insurance plans.
"I can't fix some elitist boob's opinion of me. "
You can, it just takes a lot of violence and conflict. They are usually called revolutions, and they are really bad for most businesses, including health care.
No, I don't concede at all that rationing isn't being proposed. It is, in a milder form, and the stronger form most certainly will come if we allow this "reform" to proceed.
There's nothing in the proposed system that will ensure competition in the insurance market. If there was room for cheaper insurance, someone would offer it. Having the government simultaneously offer a plan and being able to regulate what plans must offer is a quick means to establishing a government monopoly.
There would be plenty of insurance options available to people if the government hadn't already taken steps (some intentionally, and some not) to make that difficult.
This is no more useful than saying that we didn't have rationing in WWII because after all, before the war, the market was rationing too.
I imagine it would be quite useful in a discussion with people who insist that prior to WWII rationing the market provided every American w/ sufficient food, clothing, etc.
Define sufficient
Conservatives fear rationing on principle, but most other people fear rationing because it may prevent them from getting something they need. The case is quite strong that health care markets have serious failures and thus they prevent people from getting things they need. In other words, the perception that health care markets don't work is why both forms of rationing are equated in this case. As an aside, you must have a truly myopic view of the world if you think most people see "(government)" before the word "rationing"
It's not a market where goods are appropriately priced, and people can get what they need, because of the existence of current government intervention (Medicare) and the third-party payer system.
If third-party payers went away, you would see a much more efficient market.
@Matt C:
Medicare certainly changes the way health care works somewhat, but I've never seen any clear explanation as to how medicare's problems are causing the failures of the private market.
And yes, moral hazard due to third party payers is certainly a problem. Insurance is a response to the uncertainty of illness, and therefore an intrinsic problem to healthcare markets. Third party payment is independent of government's involvement or lack thereof.
In fact, healthcare markets have several fundamental issues which make them dysfunctional when compared to your market for cars or refrigerators.
#1 Uncertainty. As noted above, individuals cannot accurately predict when illness will strike, this makes normal financial planning impossible.
#2 Rationality. When illness strikes we are at our worst, we are unable to apply our normal decision-making skills.
#3 Asymmetric information. While I can be reasonably well informed about whether to buy a Prius, unless I have a degree in medicine, I have no idea whether I should buy Vincristine to treat my leiomyosarcoma.
#4 Externalities. My decisions affect not only myself, but the people around me. My failure to get tested for Tuberculosis might create a major health crisis.
It is no conspiracy or coincidence that there aren't examples of industrialized nations with functioning private healthcare markets. This is one case where markets just don't work.
That argument is disingenuous, though. The invocation of the WWII example implies shortages; there is no reason to assume that there will be any shortages in the supply of medical care should the underlying financial mechanisms change.
Whoops. I think what you meant to say is, everything we know about economics demonstrates that there will be changes in the supply of medical care should the underlying financial mechanisms change. The question is whether there will be a supply increase, due to higher prices, or decrease, due to lower prices. (Prices are paid in combinations of dollars, time, and influence. But they are paid and they don't go away because of bureaucratic ukases.)
When conservatives criticize rationing we are pointing out that liberals claim market based rationing proves the system a failure, yet are perfectly fine with all other rationing. Once you accept rationing is required or inevitable the alleged unfairness of the current system ceases to be differential. The reason for change becomes solely price & quality, and government interference will reduce both.
The reason social democrats, liberals, progressive, w/e you want to call 'em can't accept price rationing in medical care is because, fundamentally, they believe everyone living human being should get whatever (effective) medical care they need at any point in time. Then they cry about costs. Go figure.
The "rationing" line of argument reflects two rhetorcial strategies progressives like to employ: (1) argue at a very, very high level of generality: "rationing by price and rationing by fiat are both rationing" and (2) wherever possible, strip out all identification of the human actors involved in market decisions, so that the myriad decisions of individuals just become "the market" which of course can be placed on a par with "the government". But in the common political vernacular in America, whatever "rationing" may mean in academics, "rationing" invokes memories of the 1970s gas lines and WWII restrictions on fuel, rubber and metals, and means that the government is going to limit quantities a citizen can purchase regardless of means or desire. And, while academic analysis of economics may operate cross-border and without regard to national distinctions, in the US, government control of means and desires always runs up against our political culture of individual freedom embedded in the Declaration of Independence and the Bill of Rights. Which rationing by price does not implicate. Which is why this is a very effective theme to combat progressives with.
no, its NOT ".. a very effective theme to combat progressives with." because 1. it only exposes your hypocrisy. in the same way rep-cons tried, and FAILED to redefine stuff like water boarding was not torture, they are going to fall flat on their faces trying to redefine "rationing" so that it doesnt apply to free markets and they can use it as a slur in their current argument.
2. you are missing the basic point, this is not about exchanging brain farts! 45 million people and counting are without regular health care, health care costs are skyrocking until they will eventually sink our budget. the right has failed totally to come up with a "free market" solution for this crisis, except for your cheap little pontifications on the perfection of a free market health care system that doesnt exists. if you have some REAL answers, not that roll or toliet paper the rep cons presented last week, but some FOR_REAL free market plans, write them down and send them to washington, post haste! life is just too dang short for pi%%ing around, especially when you dont have health care.
I'm in over my head, but aren't there some differences between rationing goods and rationing services? The turnaround between a high price sending a signal to the manufacturer to increase production seems to be somewhat shorter than a high price sending a signal to increase the number of radiologists? How long will it take to convert financiers to MDs?
Consider the entire supply chain. Boosting production within capacity can be done in a matter of years, sometimes months. If capacity needs to expand than factories need to be built, workers trained, some of whom will take years to educate. If suppliers need to expand capacity than the same process needs to repeat on several levels.
In other words, if someone was to start making hydrogen cars worth having, how long would it take to increase the supply of the hydrogen commodity, and compare that to how long it is going to take to train more MD's
Um...so rationing by the market is suppose to make us feel better, than say, government rationing? I guess it would be a more ideologically pure misery? I'm sorry, I'm just not quite getting what your argument is Megan.
I don't think "liberals" (and I'm not sure which one, because there is this kind of sweeping generalization going on here) are saying that market rationing happens already, so let's just have government rationing 'cause it's all the same anyway. I always took the argument to mean, (a la Klein and Yglesias, I'm gonna try and be specific here) that making a case again rationing (whether it's market or government) is not a good enough point in itself in a debate against national health care. I'm not sure which liberal we are talking about, but I don't see Mathew Yglesias or Ezra Klein (the only liberals I read who write about this stuff extensively) making "it's all rationsing either way, so what?" type of arguments. I think the debate is much deeper than that. This seems a bit glib.
The argument is that "well, it's all rationing anyways" is a silly argument, because market rationing has a far better track record than government rationing.
quite true, insurance companies are much more efficient at denying coverage for a service,procedure or medicine than the govt. could ever be.
It's not "all rationing either way" though. Price rationing in medical care means that a profit-motivated entity with capital is trying to preserve/increase said capital by making reimbursement decisions off of projected costs-of-care. This motivation is purely fiscal (leaving ethics/morals aside), to increase the overall value of the company and keep the company's service competitive.
Government rationing is inherently political; no matter how much the propents of reform try to frame this debate technocratically, we know at the end of the day this system will be influenced by politically connected and corporate interests. For example, as Megan has said before, cost controls are a political motivation now. If the administration can sell its program it scores political victory, even if the cost curve does not bend downwards over the long haul.
Contrast this to a private company that has to make decisions to maintain profitability and longevity. The gov't has no interests in a) fiscal balance (let alone being in the black), or b) longevity (particularly the President).
I would be so much more in favor of a left-wing reform that focused on anti-trust laws and the monopolization of state-specific healthcare companies. I would totally support the severing of employment and medical insurance (e.g. remove employer tax deductions). I know that some of the legislation proposed does seek to increase choices, but once you have it centered on government regulation or, worse yet, actual government-run medical insurance, all bets are off.
You should really and truly read some Hayek (I think it's the Road to Serfdom) on how pricing works dynamically versus a command (i.e. centralized, gov't run economy). It's a very succinct demonstration and should be free at your local library.
Here's a link though that gets at the meat of some of it.
http://www.sjsu.edu/faculty/watkins/hayek2.htm
Yeah, I'm aware of how libraries work. thanks.
Yeah, I'm helpful. Sorry bout that. :)
Well, if you go to Whitehouse.gov you'll find a video clip entitled "Reform will stop rationing, not increase it" and you might also check out David Leonhardt's and Uwe Reinhardt's columns in the New York Times Economix blog that each make the "it's all rationing either way" argument.
Of course the argument "it's all rationing anyway" is totally silly. My comment was not an argument for or against rationing, or a comment about private industry rationing vs. govt. rationing in itself.
My comment was directed at Megan's post, which I think implied a misunderstanding of where some liberals are coming from when they do say "we have rationing already." I don't know who she is talking about here, i don't know of any "credibel" liberal voice for nationa health care just stopping at the argument "it's all rationsing so what?" which would be glib and ridiculous. It's not just rationing, and as you Denverflyer pointed out, there is much complexity here when we talk about rationing. I just don't think Megan was being fair to some liberals (who I don't even know really, since she wasn't specific so how can I be). I mentioned Ezra Klein and Mathew Yglesias because of my understanding of what these liberal health care policy bloggers think about rationing and other facets to this problem. I think her critcism was glib and superficial and had a tinge of a strawmen accusation here. My critcism isn't about Hayek, or the efficacy of rationing in itself. It's Megan's argument that theese phantom liberals are "stupid."
I discussed this recently here: http://blog.aynrandcenter.org/the-irrational-argument-for-rationing-health-care/. Most relevant part:
To impose rationing, Ayn Rand explained in a letter to a friend, means “to distribute [goods and services] in a certain particular manner–by the decision of an absolute authority, with the recipients having no choice about what they receive.” Rationing means that the government decides how much of some good or service you are allotted.
This bears no relation to what happens under the price system of a free market. On a free market, goods and services are not rationed. They are produced by individuals and then voluntarily exchanged for the goods and services others have produced. A craftsman builds a chair, which he sells for money, which he uses to purchase a doctor’s services. A doctor trades his services for money, which he then exchanges for a lawnmower.
The difference between prices and rationing is the difference between you choosing what groceries to buy and the government telling you what food you’re allowed to eat.
I'd agree completely with your remarks if they addressed, say, Ipods or cauliflowers. If anyone is arguing that fiat rationing is good for a classical market situation, then they're socialists, right?
To make this a convincing argument you also have to support the claim that the medical marketplace is close enough to this model that the conclusions still hold - that's the hard part of your argument, and I haven't seen anyone make it effectively. Market failures in this area are legion, and there is also a moral dimension which doesn't apply to Ipods. Even strong free market types usually stop short of protesting those busybody bureaucrats who force emergency rooms to treat gunshot victims even if they can't pay.
Can you acknowledge the many ways the medical market is different, and still make the case?
Of course there are health care market failures. What we don't know is whether those market failures are worse because of the amount of government intervention that already exists in the market. My parents did not have medical insurance (other than major medical coverage) until I was in high school. That was common back in the day. If you went to the doctor, you paid. It wasn't until you were hospitalized that the insurance company started picking up a share of the costs. My parents were much more careful about taking us to the doctor than my wife and I have been with our kids. Why? The way we pay for things is large part of it. That way (a/k/a medical insurance that covers "routine" medical care) exists in a highly regulated insurance market. This payment regime greatly distorts what and how much medical care is consumed in the market place.
Would we like it better if the local doctor had to worry more about whether he or she were charging more for an office visit than his patients were willing to pay unless they were "really" sick? I don't know. I do know the current market bears almost no relationship to a "free" market and that begs the question of how much of any market failure is the market's fault.
Sure. One aide is claiming that what we have us a very imperfect market, that could probably be improved by being more like a free market. The other side is claiming that what we have is a very imperfect market that could be improved by being less like a free market
Ken,
I was actually looking for somewhere to make this point. Especially the point that, in my opinion, the constraints on the market are the bigger problem, and scrapping the whole system in favor of government rationing is a much worse alternative to merely reducing the restrictions (state barriers, incentives to continuing the connection between employment and health insurance).
On another note, I'm glad the administration is finally calling this health insurance reform. But what about actual health care reform? Like the problem with massively underpaid Primary Care Physicians and a fee for service payment system with inherently bad incentives? I certainly agree there are some issues with health insurance that need to be addressed, but I believe the only way to actually bend the curve is to reform health care itself.
We don't have a true market either for medical care or medical insurance. While "market failures" may be legion, government's failures in this area are legion as well. Insurance availability would be very different if there were a) no legislative mandates for coverage of esoteric treatments and b) if there were no tax break for the provision by employers of coverage.
The moral dimension is also not one-sided. There are issues of what duty each citizen owes not to be a burden on others, or to minimize one's claim on others if circumstances arise that turn one into a burden; a duty to live a healthy lifestyle before claiming on others for care; to bear the ordinarily bearable burdens of life and to care for yourself as much as possible, like taking your medication when you're supposed to. If A owes B some duty of paying B's medical expenses, what duty does B owe A to use best efforts to minimze them? I think that duty is substantial. The progressive program discards all of those duties in favor of coercing open-ended wealth transfer, a position that is itself highly questionable morally given the income levels of those who would get subsidies as proposed.
My rationing is done my insurance company.
I'm certain they have a gold mine of information driving that rationing. What's disturbing is the conventional wisdom that they deny coverage out of hand. I would prefer a lot more openness about the rationing, because it's already being done by faceless masters with a formula.
No your rationing isn't done by your insurance company
If you don't agree with insurance company, pay for it out of your own pocket. There is nothing stopping you. No law, no regulation, no ethical reason why you can't just pay for it yourself. It is not rationed.
However, if you don't have the money, your insurance may or may not pay, depending on the what insurance you bought. That is between you and the insurance company (yeah, yeah, I know, most insurance contracts are negotiated by employers / unions, not individual...nothing stopping you from getting your own insurance. This part of the deal sucks, and is yet another unintended consequence of tax law and government meddling in the free market).
And NOTHING in the plans being discussed in Congress will prevent you from paying out of pocket for any medical services, either.
If the government takes over enough of the market to really force prices down, then yes you could lose out on paying out of pocket. If the government has enough market power to force prices down on say 80% of the market, then the remaining 20% will be even more expensive. This will probably be where you would have to go to pay out of pocket, and more people will be priced out of the market than are currently. So, in an effort to decrease inequality you end up with increased inequality.
anirprof, it isn't clear that nothing in the plan discussed in Congress will prohibit paying out of pocket. I don't know what is being discussed in Congress, and you don't either. That is one of the chief complaints; the bill is too damn big for anyone to understand. There is no final text to even debate at present, yet the Congressional leadership was hellbent on passing a bill, any bill, before the August recess.
You missed the important bit; insurers have information that their rationing is based upon. And I have no knowledge of the decision-making process that goes into that rationing. Is it because they see a trend of other problems from taking certain drugs? Risks of complications from certain surgeries? Too short a life-expectancy to justify a certain course of chemo? An alternative treatment is significantly cheaper and has nearly-as-good outcomes? What's behind their decision to approve this and not that?
Insurers do ration; and the folks on the other end of the contract deserve more information about that rationing.
Seems like advocating laws or incentive to disclose information would fix that. Also, increased competition in the insurance market.
In most cases the insurance companies are simply agents for the people who actually pay the bills,whether employers or multi-employer groups or individuals. If employers are willing to pay for pre-existing condition coverage from day one, as opposed to day 730 ( two years), which is usually the case, insurance companies will sell the coverage. But the costs for such add-ons are usually so high that few companies will buy it.
The best examples of real rationing by fiat are being found in Canada. Alberta has been allocated federal funds to purchase 8500 cataract surgeries this year,as in years in the recent past. When economics and oil incomes were good, the province bought and paid for the 2000 additional worthwhile cases that presented themselves to the eye surgeons. But now the money isn't there in the Alberta budget to do so after July 1,2009. So a backlog will build up and someone will have to select which of the patients are worthy to get one of the 8500 procedures.
In some provinces you cannot buy private surgery; only public surgery is available. Until the teams threatened to fly their players to the US, Ontario was not going to allow professional athletes to jump the queue for MRIs for sports related injuries.
Rationing is a real issue and money is a real problem. It is being confronted now most directly in the collectively bargained multi-employer plans, where the trustees decide what will be covered and what will not,since the money comes out of the wage adjustments for the workers. But at least the decisions on what to buy and what not to buy are being made by people in direct contact with the workforce that needs health care coverage and pays for the coverage.
If you don't agree with insurance company, pay for it out of your own pocket. There is nothing stopping you. No law, no regulation, no ethical reason why you can't just pay for it yourself. It is not rationed.
What happens if you can't afford the treatment? Say, a woman, for breast cancer? Stop being willfully obtuse.
It's called a "fundraiser." My friend's sister-in-law recently died of a brain tumor at a tragically young age. They raised over $3000 for her care at one bake sale alone. I proudly contributed to this bake sale, as did many others and all of the people who bought the baked goods. People even just donated money without taking baked goods at all. My daughter and her friend held a separate bake sale of their own and raised over $100 all by themselves. If 11 year old girls know how it works, why don't you? YOU stop being willfully obtuse.
Your answer seems to be that people come to my house, take my money, and pay for her treatment.
I may go along with that, but don't I now get a say in how people live their lives, so as to reduce the chance that they will come to my house, take my money for their illnesses, including cancers?
Sounds reasonable to me. If I am required to pay for them, that that they must account to me.
Does she smoke? How is her diet? What is her age? Does she have kids or live alone? Is she working or a drug addicted thief?
I care because every dollar you take from me for her health care is one not spent on schools, defense, my personal enjoyment or any other use for my money that I may prefer to paying for her treatment.
In sum, if you make me pay via taxes, I take an interest in the matter beyond the extraction of my money. If my interest in her life is somehow an invasion of her privacy, well, so is taking part of my life by taking some of my money. Funny how the left never seems to grasp that.
"rationing isn't done by your insurance company.."
of course thats rationing! you are just making up the definition.
you are talk as if rationing doesnt occur in "free markets" when of course it does. an insurance company that even makes decisions of what it will and will not pay is the very definition of rationing.
i have to buy my insurance directly and they absolutely do ration the care that will be covered. in a "pure free market, the insurance companies would be no different. take your premiums and find a way to deny you coverage, thats how they make a profit, after all.
"My rationing is done by my insurance company."
What medical product or service did your insurance company prevent you from obtaining? What did they refuse to pay for, even after both you and your doctor plead your case, including all necessary appeals?
So many people throw around this line, but I've yet to read someone's post about how they were denied care because their insurance company refused to pay for something.
And please don't stoop again to the excuse of "pre-existing conditions." There is already strong legal protection against denial of coverage for pre-existing conditions — the fact that some people fail to take advantage of that protection isn't the fault of the insurance industry.
Do you have any links about how to make insurers cover pre-exisitng conditions? I have such a situation.
circleglider, where do you live? Because "strong legal protection against denial of coverage for pre-existing conditions" is a matter of state law. Some states have it, others don't.
The don't states trap people with pre-existing conditions in jobs, and fail to cover many who need coverage.
The do states trap people into plans that are unaffordable.
One of the great difficulties about the health-care debate is the level of regionalism involved. You talk about your state, assuming all others are the same. Most of the time, we're not talking about the same problems.
Another issue is states rights. A state that's required mental-health coverage or family planning coverage will be reluctant to give these things up. Right now, there are 50 different systems out there, not one.
Beyond the legal framework, there are other variations. In rural states, the problem may be a lack of medical facilities. In urban areas rich with teaching hospitals, the problem may be too many specialists or too high a cost because of the need to support the education component of the medical delivery system.
29 U.S.C. § 1181(a)(2) governs exclusions for pre-existing conditions. It's part of HIPAA Title 1. And it's Federal legislation, not state. So regionalism isn't an issue.
Generally, if you haven't let your coverage lapse for more than 63 days, you can switch jobs or plans without suffering any exclusions. Even if your coverage has lapsed, pre-existing conditions can only be excluded for 12 months. Without some penalty for forgoing coverage, no one would pay for health insurance until (or unless) they were sick.
Since you didn't cite any specific instance where your insurance company prevented you from obtaining medical services or products, it's reasonable to assume that's never happened to you. In other words, either you're healthy or your insurance plan has taken care of you.
As for out-of-pocket costs of health care — that's really an entirely separate issue. As a society, we already help people who are unable to help themselves, and try to insure that they have adequate food and nutrition, housing, health care, education, police protection, etc. Some people may feel that society should do more, but there are established ways to funnel services to targeted populations without having the Federal government take over a major portion of the U.S. economy.
All of these arguments in favor of "doing something" seem very abstract and not grounded in direct personal experience. Maybe that's why many people in the country are just now becoming very concerned about what Washington maybe doing to their health care system.
This reminds me of an interview I once watched on the News Hour several years ago. The subject of the interview was a law professor at Yale (or some such) who was advocating "nudging" the private sector to produce a more equitable distribution of goods and services. He was asked, "What do you say to those who argue your approach will interfere with the working of the market?" He answered that they weren't going to be interfering with the market. Private enterprise follows rules. They were just going to change the rules. Currently, the rules were designed to prevent people from being harmed (through fraud or some other problem). He advocated keeping those rules and adding others that would produce a more "fair" result. The market wouldn't change. Just the way the market operated. Sort of like basketball was still basketball after the introduction of the shot clock and the 3 point line. The example the guy gave of the kind of rule making he had in mind was one that required banks to give more mortgages to the poor. What could be wrong with that?
I mention this memory in this context because my reaction to his argument was similar to the reaction I had the first time I heard the "market rations, too" argument. Both arguments are true and at the same time fundamentally misleading. Just because the market rations goods and services it does not follow that we should not care if that rationing function is replaced by another mechanism. Tweaking with the rules does not "fix prices", but it still changes the market from what it was (or else, why do it?). Tweaking rules thus interferes with the market just as fixing prices would interfere with the market -- the only difference is the method. Stating that you are not going to fix prices may be a true statement, but that doesn't mean there are no valid objections to your plan to change the market by another method. The fact the market rations health care does not mean we should be willing to replace the market with another rationing mechanism.
Most professors would fight to the death any attempt to tweak the rules that governed the selection of new faculty members for their departments.
At a glance there's a big difference between the free market deciding the true value/availability of an item and health care. If a good is too expensive for me, like say an ipod or a car, I would have to do without. On the other hand, if I could not afford health care the consequences are more dire. No one is going to care if I have do without a car or a house, but people would care if I was going to suffer. And people should care. I would not want to live in a society where people don't care if others suffer, healthwise, because of market forces.
Things get murkier when you think about people have worse or better care and not about the extremes of death or life. To me the idea of some government panel rating medical options, which leads to limits on care, is really no worse than a private insurance company deciding that I'm entitled to such and such a treatment. The recent macroeconomic events have belied the mantra that the free market is always better.
Food was actually mentioned too. Its actually a really good analogy, since the consequences of going without food also kill you. But we don't take over a significant portion of farming or grocery stores. No, we give people money/food stamps to buy it. Why doesn't anybody propose this for healthcare? Is it because hard-core libertarians still think its welfare-statism? Or is it because progressives are in love with beautiful technocratic machines that supposedly will make us all happier. Maybe our hostess could comment on this-since she can probably do better research than I can.
First off, government already provides a significant portion of insurance through Medicare.
Second, nobody's currently suggesting a takeover, that's one of the conservative lies being spread about. As much as liberals would like it, a nationalized system isn't on the table.
Perhaps you could favor us by identifying which self-identified conservatives are spreading the alleged lie. My position is that a plan like the one on the table is laying the groundwork for a future system which will be de facto nationalized, except we will slouch into it through scope creep and increased distortionary regulation of the remaining markets, as opposed to taking the thing over in one fell swoop.
All you need to do is meddle further and further outward from the original scope in the name of public good -- either by taking control of industries through regulatory structures that only allow one right answer, or by inserting regulatory inefficiencies that generate successive "market failures" that government must then expand to address -- until the whole line of dominos falls neatly into central control.
If the history of other major US government regulatory bureaucracies is any guide (the FDA and EPA come particularly to mind: compare their Day One charter with their present regulatory reach), scope creep and takings are the rule for regulatory power structures, not the exception.
sound like a conspiracy theory to me.
You said it yourself, "future system," meaning your fear, not a proposed reality. I don't really want important decisions about the future of health care made based on your delusional fears.
If private insurance is so great, it will compete. UPS/Fed Ex compete. Private prisons compete. Schools compete.
Regulation is legal framework -- rule of law that defines an operating environment-- not a service that competes. You're confusing your apples and oranges, particularly since there's so much regulatory capture that gives for-profits an edge.
So you're going to accuse multiple people of lying, but when pressed to elaborate, you won't deliver even one example? That's a vote of no confidence for the rest of your judgment. I'm also extremely suspicious of all thought processes emnating from anyone proposing a system overhaul which, out of their own acknowledgement, will quite possibly be subject to regulatory capture.
It is even more telling that you cite examples such as e.g. schools. In the case of primary education, the "competition" to the government alternative has limited enrollment on account of the government dominating the industry, and therefore compete by doing one of:
a) Operating solely on religious or charitable grounds.
b) Charging tuition rates that necessarily favor the rich or families willing to make an extreme sacrifice in order to access the non-public option.
c) Somewhere in the middle of (a) and (b).
d) Home schooling, which is and always will be a very limited practice for practical reasons.
As a result, the quantity of those who can participate in the alternative is correspondingly restricted. Meanwhile, the public schools function partially as a lottery and partially as a system favoring the rich, as the quality of public schooling is notoriously broad and the rich are generally able to bid up and access the more favorable districts by proxy of housing prices. And the worst-run school district in the nation, without dispute, is the one and only that reports directly to the federal government.
If you see a conspiracy theory in my objection, then IMO it is possible that cause, effect, and history don't enter deeply into your consideration of this issue.
Gee Mouse, bombloader said it. You said it. Last night, I watched Huckabee and he said it. Lots of clips of Republican kongress-kritters saying it on Huff Post. Would you like me to go dig up a half dozen and link to them for you?
So many on the right are out spreading lies around that it's hard to get a truthful notion of what's actually being proposed.
I'm waiting for any kind of response from the right that's not filled with smears of death panels, takeover threats, or the collapse of small business as we know it. A responsible, measured response.
Instead, we get fear bombs to stop discussion. I don't much like the fear mongering from the left, either. But from the part that's supposed to have personal responsibility as a pillar, it's particularly disgusting to me.
Mouse, I forgot. In speaking of schools, I was thinking mostly of higher ed, where public schools -- you know, state universities such as Dartmouth -- compete against private schools,. Harvard, for example.
Umm where did I say the government was going to take over the whole market? I said a portion of the market. BTW, if a lot of liberals do like it, you wonder why conservatives are suspicious. Also, it not a conspiracy to point out that incentives could lead to greater and greater government involvement. For example, if the USPS delivered packages at much lower than cost, then, no UPS couldn't compete. Would this mean that government package delivery was better than private? If Wal-Mart can sell stuff at less than cost long enough to drive a smaller store out of business, is this because its a "better" retailer?
BTW, I've said I'm not one of the conservatives who thinks rationing is likely, just that I understand that it is a possible outcome. More likely is that we'll have a system that is just like Medicare and we still won't know how to pay for it.
Again you are uninformed. Just google "obama single payer system" and you will see news articles and even videos of Obama touting a complete government takeover. He states specifically that he expects his plan to eventually evolve to a single payer system.
Somewhere in the comments on the Atlantic after a youtube of an older guy wearing a Marine hat was the outraged statement that he was 'opposed to government medicine but he probably had Medicare and VA entitlements.' The outraged writer wanted to see the ownership of these entitlements revert to the government for proper distribution. Recently also on HuffPo was the comment after a F-15 went down in Afghanistan with 2 crew that the military industrial complex would just waste another $15 million. There was no appreciation that 2 men just lost their lives providing security to the USA in part for promised entitlements. People have already paid, I know not everybody but in the main, the government for these entitlements just like Bill Gates has put money in the bank. And just as it's OK for Bill to give the money away but not me, it's OK for the people to discuss a change, but they are angry if it is taken away as if it is not theirs now.
Megan-
Where is 'rationing by fiat' being proposed? The issue is what is covered by standard insurance, which is an issue we face today. You can still buy services not covered by insurance, or fancy insurance to cover these things.
No one is proposing to prevent you from buying something not covered by insurance - this is not fundamentally different than the current situation.
I'll tell you where rationing by fiat is being proposed: According to leading Democrats, a woman will not be able to get an abortion under the public plan. That's rationing by fiat ... denying someone health care based on politics.
That is not rationing by fiat any more than any lack of coverage today is rationing by fiat. Abortions remain available to those willing to pay.
I can spend my money to purcase health care south of the border. It is around 4 hours drive from here, similar to the drive required to get anything but basic medical services locally.
The only problem is that I have already paid for medical services. Through taxes and fees, my resources are already expended. For what? Bad service, long wait times and the potential of bankruptcy waiting for medical services.
So you are suggesting that people are free to do what they want as long as they pay twice?
Derek
I don't think you understand the CONCEPT of rationing by fiat. Either that or you're willfully ignoring it. It has to be one of the two. Rationing by fiat is not a thing that is spelled out, rather it is a generally inevitable consequence of delegating decisions to a central authority. It can be mitigated by certain concerns, but only if those concerns directly feed into the governance of the system.
A good example of this is military logistics. There's plenty of rationing by fiat going on between politicos and individual supply officers massaging the system, however, the overriding directive of the military's mission combined with the extreme direct penalties for being the one to massage the system thusly keep the rationing by fiat to a minimum.
In any civilian system you can bet your ass that the people actually running it will not be accountable to anything like the UCMJ nor will the scrutiny of their decisions be anywhere near as fine as those of the military. Therefore rationing by fiat(namely, the whims of whoever handles your case or who you know higher up in the .gov) will be orders of magnitude worse. To ignore this simple fact is to ignore basically every major civilian government system designed so far.
So you've defined "rationing by fiat" as an "inevitable outcome of delegating decisions to central authority". Not well-defined at all. Any google searches on this term merely return this page or other McArdle writings. Care to give a real (non-reflexive) definition of this term?
I fail to see an explanation anywhere in your response as to how an insurance company bureaucrat denying your claim is substantially different than a government bureaucrat denying your claim.
I didn't attempt to define it in my post at all. Proper reading comprehension should have made that obvious. I merely assumed a certain level of english competence and stated that it is an inevitable cause of the delegation to a central authority not directly responsible for anything. Nobody who works in the .gov health insurance machine will be voted to their position, that's for damned sure. However, to get the definition you so clamor for, we shall turn to dictionaries scattered across the intertubes.
As a noun it is defined as a portion or allotment. A fixed unchanged amount. As a transitive verb, to portion out because of a lack of supply.
Thus, we can determine that in and of itself, when something is rationed it is doled out in portions(in terms of health care medical procedures) depending on the supply(currently determined by the number of doctors combined with the amount insurance companies and individuals are willing to pay for it in one form or another). However, the term rationing in our case is modified by the word fiat. So we must look up the definition of fiat. Isn't this fun?
Fiat is a noun defined as an arbitrary order or decree, as well as authorization or sanction. Interestingly, in the current case discussed both definitions apply at the same time. It also is a verb, but unless either of us drops pure latin into normal english conversation, knowing that it means 'let it be done' is not really relevant.
So, now we know the definition of all the terms in our phrase. Looking at the definition of rationing, there are two places that 'by fiat' can modify it. Either the word portion is modified, the word supply is modified, or both are modified at once. Most likely, both will be modified at once, unless effective safeguards are present to stop it. I seriously doubt this to be the case given the graft and quid pro quo present in every other federal program.
The ultimate acceptance of a procedure will come down to one person, two at the most. This means that whatever that person decides to be the case, you will have to a abide by it. If he denies it, you will have no recourse at all. The only modification to that scenario will be if a higher-up is connected to the person getting the treatment. In which case a treatment which would otherwise be denied is suddenly covered.
And thus, the general meaning of rationing by fiat is uncovered.
Oh, I got so caught up in defining the term I missed your second paragraph. Pedantry does tend to have that consequence. As for how it is substantially different, the insurance yob is at least constrained by the effects of competition and, oddly enough, redress to the government. When it is the government, there is effectively no competition and petitioning the government to come down on the government rarely works out well.
Market rationing of health care is an unavoidable facet of economics.
Government rationing of health care, on the other hand, is immoral. Power corrupts, and the absolute power of life and death over your fellow citizens corrupts so quickly and so completely that - well, didn't the Holocaust teach the Democrats anything?
Did Eugenics experiments teach the Democrats nothing?
Did the US Army LSD experiments teach the Democrats anything?
Placing health care decisions in the public realm is immoral and ALWAYS leads to immoral acts.
That's the difference Mr. Reich.
Interesting that the Democrats would put forth someone named "Reich" to present their arguments.
Nice ad hominem movertypeguy. Particularly impressive in focusing on something so irrelevant as surname.
What is the government rationing you are talking about? Decisions about what to cover under medicare? This occurs today, of course, and is not fundamentally different than what private insurance does.
It's fundamentally different when government rations health care, because the incentives are fundamentally different. (For example, current proposals would prohibit abortions solely on the basis of political expediency).
That you won't acknowledge this demonstrates very effectively why power cannot be given to people like you. It corrupts you. So completely that you'll gloss over the differences between government rationing and market forces.
Every single time that any government has been given this power, it corrupts that government and leads to rationing.
Every. Single. Time.
Oh I see, so when corporations ration healthcare "that's just life" becaise people who run corporations have no moral agency, and absolutely no responsibility when deciding life and death decisions.
Hey, I agree with you that power corrupts, but that corruption runs both ways in the private and public sector. Let's not pretend that the private sector is somehow more morally "pure" because what? the government is evil and must be protected against at all times? As if the privare sector is a la la land of morality and pure ethics.
Megan:
Nice strawmen.
There are a couple of problems with the notion that we have something like a typical market allocation now, and that we would have nothing but government fiat.
Critically, none of the proposals I've seen would do anything to prevent someone from purchasing medical services or drugs out of pocket. Virtually none of the European systems do that, either.
Right now, we have fiat rationing by insurance companies. From my perspective as a consumer, I have no choice of allocating money or deciding what to or what not to pay for. Insurance either says yes or no, according to non-transparent rules of their own. If they say no, I can purchase out of pocket if I choose, but I'm certainly not in the position
I'm hardly even in the position of choosing insurance companies freely. At best I can switch annually, and only from the limited set my employer lets me choose between. I'm lucky with about a dozen options, but my wife's last several employers for example have all had one plan only -- no choice other than go without.
From a consumer perspective, how exactly does my interaction with the health care sector look a lot different if I'm enrolled in my employer's one and only health care option vs being enrolled in some sort of government run scheme? On private health insurance my interaction with that sector is nothing at all like how I relate to say, buying consumer electronics or even getting my car repaired.
We can argue about whether my insurance company's bureaucrats or the HHS bureaucrats will make smarter decisions but for me it's all about fiat decisions and waiting in queues either way. Either way, if I want to pay out of pocket for something more, I can. Where is the difference?
If you're arguing we should have built a wholly different health sector that's fine, but it's a strawman to argue that anything Obama is proposing will radically change what is now a dynamic free market.
Part of the reason you get health insurance through your employer is because the government decided it was tax free compensation in WWII.
We can argue about whether my insurance company's bureaucrats or the HHS bureaucrats will make smarter decisions but for me it's all about fiat decisions and waiting in queues either way. Either way, if I want to pay out of pocket for something more, I can. Where is the difference?
There is none. The fundamental question is which allocation strategy will be more efficient. I have zero belief that the insurance company's bureaucrats are any more efficient than the governments, especially since they don't work for me. And they don't - any notions that I might sue them or make another choice are nonsensical - I have no choice now...they work for their stockholders as they should, so they take the least cost path to maximizing shareholder value: rescission, lifetime caps, pre-existing condition clauses, and the like.
The market is broken.
We can choose to fix the market- meaning, we stop granting long lived patents for drugs (legal monopolies), eliminate long drug testing cycles, eliminate the employer tax deduction for insurance (adding choice back into the system) eliminate minimum coverage requirements, break the AMA and make the certification process a snap and allow more caregivers into the market (probably best to actively recruit them from overseas - quickest), we charge everyone for emergency room visits, etc and we'll be making progress towards a more perfect market.
Whether that gets us to a competitive market is questionable - depends on the barriers to entry. Maybe it does.
We pretty much have decided that the effects of these choices are not ones we're willing to accept - nor do any of the other advanced economic powers.
So we have a fundamentally broken market, we do have rationing, and it's fundamentally the same whether the government does it or the health insurance companies do it. The only question is who does it better, who has less overhead and who can control costs better.
Responding to Sloth;
Couple of quick points first:
The certification process is currently bottlenecked by residency availability, which is all but required now for physician board certification, and is capped and paid (little) for by Medicare
http://media.www.cm-life.com/media/storage/paper906/news/2009/04/22/News/Federal.Cap.On.Residencies.May.Limit.Proposed.Medical.School-3720375.shtml
How do you propose for pharmaceutical companies to make money if you reduce drug patents? And how do you expect to continue getting drugs with known side effects and other drug interactions if you eliminate long drug testing cycles (especially now, as drugs are moving toward a molecular level, necessarily more complicated)?
However, I do agree the market is currently at the very least inhibited, if not outright broken, and also agree removing the subsidy from employment based health care, especially if coupled with deconstruction of state barriers to health insurance, would go a long way toward improvement in the incentives for health insurance companies. Other types of insurance (car insurance) are also beholden to stockholders, yet regularly pay their claims in order to stay in business. IMO, that is the biggest problem with insurance companies right now.
Also, I still believe that actual health care reform aimed at addressing the problems facing Primary Care Physicians and the fee for service system would not only result in fixing many of the problems discovered by the Dartmouth Study, but in doing so would "bend the curve" such that insurance premiums and Medicare/aid spending would decrease.
I have zero belief that the insurance company's bureaucrats are any more efficient than the governments, especially since they don't work for me
One works for profit, the other for power.
You can't choose insurance companies freely because of previous government interference in the free market. The government made rules that strongly discourage companies from letting you keep your own privately purchased individual insurance policy and paying you the equivalent cost that the company would pay to provide insurance for you from their own plan--discrouaged by making company provided insurance tax free but levies taxes if the company reimbursed for an individual insurance policy. Thus, most people get insurance through employment and the individual insurance market is crippled.
Don't point your finger at the "free market" in this instance.
Of course, absent government interference in the free market, if your insurance company unreasonably denies you coverage for the procedure you need, you can't simply switch to another insurance plan, because no insurance company will sell you insurance for a pre-existing condition at a price you can afford, unless required to do so by government "interference." So your choices are:
a) Suffer the consequences of going without the treatment (potentially death or lifetime disability).
b) Pay for it out of pocket, if you can--for many treatments, the price is out of reach for the average consumer, or at best means being driven into utter poverty.
c) Pay just as much as paying out of pocket, plus a profit margin, to buy different insurance that will cover your pre-existing condition.
d) Sue your insurance company (maybe you'll live long enough to collect).
This is true, but if this is the case, why doesn't it happen more often with care insurance companies when MVA's result in deaths/serious injuries? Are any laws set up to combat it?
I advocate this sort of government interference, by the way. Just not the kind that unreasonably links employment with health insurance and sets up awkward state barriers to insurers, disallowing the large pooling necessary for health insurance to function capably.
If government hadn't messed with the private insurance industry already, the vast majority of people would be able to purchase coverage when they are young and healthy and keep it for their entire lifetime, much as they do life insurance today. But no, government messed that up by making it much less expensive for employers to force people into the plans of the employer's choosing rather than the individuals'.
So, no, I reject that your premise is true.
I really find it quite amusing that you think that the giving the government both the provider role and the watchdog role is going to result in a better outcome than leaving the government only the watchdog role. It *never* works the way you want it. We will end up with a single government provider that is completely unaccountable, because it makes the rules.
So perhaps in some alternate reality in which there was a libertarian utopia in which the government had not "messed with the private insurance companies" it might not be the case that people would sometime lose their insurance due to temporary inability to pay the premium, and be unable to obtain insurance when they get sick due to a pre-existing condition?
I suppose that is possible. Such "woulda, coulda, shoulda" argumentation seems a bit like speculating about whether health care would be better if America had remained a colony of England.
However, in this reality, the options are as I describe.
Insurance companies that unreasonably deny coverage in a free market soon discover they have no customers and go out of business. Governments that unreasonably deny coverage don't face such pressures. On top of this true rationing actually leads to incentives that destroy the supply of the goods being rationed. No such problem exists for the free market.
Brian:
The problem is that for people with chronic illnesses, it's perfectly reasonable to deny them coverage. If you know someone will cost at least $20,000/year in ongoing care, with a non-trivial likelihood of major and expensive complications, then a reasonable policy for them will cost thousands of dollars per month. Or given the huge downside risks for someone with a condition that has a range of hard to predict and expensive outcomes, a company might reasonably decide not to insure that person at all.
The market will punish insurers who DO give coverage to expensive individuals because they'll lose money on the deal.
This is why you can't argue with these people ... they cannot see the hand of the government already limiting their choices.
This writer cannot purchase health insurance privately because the government decided that insurance isn't a taxable income when employers pay for it. But he can't see the hand of the government limiting his choice in the present market. How could he possibly look forward and see the future dangers?
These people aren't intellectually capable of this sort of observation and extrapolation. That's the hardest part of the debate ... trying to win over the witless.
Of _course_ I can see the hand of government limiting choices. As I noted in my post, this isn't the system a libertarian would design from the ground up, not even what I would design from the ground up.
What Megan implies, though, is that there is a vibrant free market that will be wrecked by the proposals currently being considered. Just not true. That her and your preferred option isn't on the table is not an argument that current bills would dramatically change the playing field for most people with group coverage.
Now, I personally would be unable to purchase private insurance anyway due to my unfortunate choice of family genetics (true whether we are defining "unable" as either they won't offer me a plan, or that if they did it'd be over $2,000/month for me alone and I couldn't afford it, and yes that'd be a realistic number in my situation).
Now, I personally would be unable to purchase private insurance anyway due to my unfortunate choice of family genetics (true whether we are defining "unable" as either they won't offer me a plan, or that if they did it'd be over $2,000/month for me alone and I couldn't afford it, and yes that'd be a realistic number in my situation).
You might not be offered such a policy now, but if the market were overwhelmingly private instead of employer-based you would have been carrying the policy since before you started consuming $2,000/month in health care, or government might have simply mandated you be covered.
Your assertions about what McArdle insinuates fail miserably. She never implies it's a vibrant free market. In point of fact, given things she's explicitly stated in previous posts, she has demonstrated that she more than understands the insurance industry is highly regulated. Regulated, however, is not AT ALL the same thing as the .gov owning things lock stock and barrel. Hell, two of the three examples posted above are EASILY across state to state borders as regulated as insurance. Unless you think gasoline and cigarettes enjoy truly free markets across the US, in which case I feel sad for you. With the subsides on corn, tariffs on sugar, and issuance of food stamps even the food market is regulated, albeit by the least amount.
TallDave:
Now I really don't understand what it is you want.
Either
1) you are proposing that insurance companies would sell policies to 18 year olds (lets say) that would cover them their entire life against anything they might come down with all for a fixed price
or
2) you are proposing that the government prohibit companies from raising rates on the chronically ill and/or from charging them higher rates in the first place.
If 1), how much do you think it would cost for a policy that would cover you against everything, forever? Sure 18 year olds can get really cheap policies now but those are structured as annual contracts -- you don't get to keep paying $50/mo forever as you age and as you accumulate illnesses.
If 2), that goes against your whole argument for individual risk-based underwriting!
fiat decisions and waiting in queues either
An insurance company does not make a fiat decision in a vacuum. It competes with other insurance companies. A government competes with nothing.
From a consumer perspective, how exactly does my interaction with the health care sector look a lot different if I'm enrolled in my employer's one and only health care option vs being enrolled in some sort of government run scheme?
You can change employers, for one thing. Also, an insurance company competes with other insurance companies to offer the best rates, and negotiates prices. A government competes with nothing, and simply sets prices.
You're defintely correct in one respect though: you really should have more choice of insurance. Tying insurance to employers limits choice and should be abolished.
For the love of God. If you accept "rationing by the market," EVERYTHING is "rationed," since no tangible good has an infinite supply. What a silly discussion this is.
Eamon:
Excellent argument, well stated. Health care is not the same as purchasing a DVD player. If I don't like the price, I can't wait until the after Christmas sales on chemotherapy. We regulate markets all the time - I'm sure Megan would not order non-FDA inspected food for her wedding, regardless of how good a price it was (visions of Homer Simpson forcing himself to finish the discount meat from the Qwik-E-Mart now pop into mind). And I wish we had not undone the regulations on banks that had stood in good stead from the New Deal until the 1980's.
And as pointed out, we do subsidize food when this necessity becomes too expensive for some, through food stamps and other programs. We didn't always, obviously. The country made a decision that it was a decision in our best interests as a society to ensure that the poorest did not starve, in a nation as wealthy as ours. We also have concluded that providing a basic education open to all is in our society's best interests. I myself have benefited from public school education, City College when it was tuition free and graduate school supported by teaching and research assistantships. I have now trained over a dozen students who with their Ph.D.'s are earning more income, and thus paying more taxes, than they would have with just a Bachelor's degree. My research involves developing new materials for solar cells and studying voltage fluctuations in the brain (some think we may have found something interesting regarding Parkinson's. Time will tell). Not every person given a public education pays off in a big way, but overall we are a far better country for public education available to all. And the existence of public education has not prevented anyone with sufficient funds from going to a private school, or home schooling their children.
We have never been, are not, and never will be a fully libertarian society. As a former subscriber to the Ayn Rand newsletter, I am fully versed in all the arguments. While some of the arguments have a clean, logical appeal, when push comes to shove too few are willing to live up to them. Direct me to a single banker who sold their house, hocked their goods and made a good faith effort to pay back the money that was lost through their insane CDS nonsense. Every coin has two sides - and you can't say you deserve the giant bonuses for a successful risk if you aren't willing to take the hit for a giant miss.
Yes we have market rationing of health care at present. And we pay twice as much as other nations, and on average we are getting a crummy product. The market has done a crappy job. I for one am willing to try something else - as doing nothing , which is essentially the only counter argument I've heard from the GOP, does not appear to be viable.
Oops. My first time posting and I clicked the wrong Reply button. Sorry about that.
You know Megan, if food started getting so scarce in this country that the price was being driven beyond the range of the middle class to afford--then yes there would be calls for rationing and I think they would be heeded.
I'm sure you would make the same point--that rationing food would decrease the drive to innovate and eventually solve/improve the situation--and you might be right, but I think it would be a pretty hardcore group of libertarians that would listen to you at that point. Most people would want to avoid starving to death.
Taking it a step further, I read a Sci-Fi book once (I think it was Heinlein) where people were living on space stations and they had to pay for the right to continue breathing oxygen. My reaction was not "wow--that would be a really awesome innovation engine for perfecting that engineering problem" but rather mild horror at the idea that someone might lose his job at the space station and get pushed out the airlock (along with this family) because the company (which had been paying for his air by taking money out of each paycheck) no longer needed him.
I guess my point is that while it would be ridiculous to ration iPhones, it's pretty easy to imagine rationing food or water under the right circumstances. Hell the Republican-controlled state government rations water regularly during the summers here in Texas (instead of just letting the companies increase the price water until we all use less) so it's not like this is a totally wild idea when the good/service in question is like... not a luxury consumer good.
I'm know better than to argue with you about the actual long term merits of a pure libertarian solution--I'm honestly not sure I would win--but I think you're being dishonest about the general willingness of people and governments to turn things like rationing when trying to save lives in the short-term.
Some of the most recent destructive famines have been perpetrated by central planning and government corruption, and involved highly ineffecient distribution rather than absolute shortage. They were generally not failures of markets to the extent those markets were allowed to function. A man who is truly hungry will purchase a slice of bread at any price. So somebody with a slice of bread will sell to him at any price, and then somebody else comes along and offers bread at a somewhat lower price, and so forth. At this very moment I have two major supermarkets, one organic supermarket, and a dozen convenience stores within 10 minutes of me, and can buy any food-related need or luxury at any price range and any hour of the day.
Yet with healthcare, thanks in part to excessively heavy-handed government intervention that has helped disconnect us from the proper interplay of need, want, and price, we suddenly have modern famine-like conditions (inefficient distribution) while living in the midst of abundance. The farther away you get from heavy-handed regulation and excessive tort, the more affordable things get even as technological innovation continues (dentistry, optometry...lasik).
Why might that be?
And why do some people insist that the obvious solution must be more government?
And the greatest financial crisis we've had since the 1930's was from a government roll-back of regulation, resulting in mission creep for banks. Why do some people insist that there should be no government solutions?
Actually, zic, the financial crisis was driven largely by bad regulation and accretion. The securities markets remain the most heavily regulated markets in the country. The problem is that regulation always can be gamed. For instance, Arnold Kling demonstrated that part of the crisis was driven by regulatory arbitrage, because AAA securities had lower capital requirements than real estate - so the push was on to figure out a way to convert real estate into AAA securities.
It's not really complicated. You just refuse to see that rolling back SOME regulation still leaves a jalopy of regulation in place. No one thinks to reconsider what the regulatory system should look like until it fails.
This idea that government is the solution instead of being part of the problem, and thus should get plenty of blame and introspection, too, just never seems to occur to you, does it?
Actually, zic, the financial crisis was driven largely by bad regulation and accretion.
Wrong!! The regualtions in place weren't even enforced. Hell, banks knowingly relaxed lending standards that had been in place for a long time.
Well, Calvin, since you so summarily pronounced me "wrong," why don't you tell me, specifically, (1) which regulations should have been enforced that weren't, which if enforced would have prevented the meltdown - give me the CFR cites, if you would, and (2) which regulations were stripped out that, if left in place, would have prevented the meltdown - again, CFR cites would be nice. And please support your conclusion with some evidence, hmmmm? Just so we know you're not speculating or spitting back Democratic Party talking points.
It seems to me you treat regulation like medieval peasants treated religion: invoke it and it makes your ills go away. Life isn't like that.
Do you even know what regulatory arbitrage is?
Zic,
You are ill informed. Pick up the book Meltdown by Thomas E. Woods Jr.
Hell the Republican-controlled state government rations water regularly during the summers here in Texas
Gee, what a great example. Couple years ago our city of Plano was fined for underconsuming its quota -- after happily ticketing homeowners for watering their lawns 30 minutes after their allotted timeslice for the entire hot season.
If food was getting too expensive to afford, I'd first try to fix the supply problem before calling for rationing. Nobody freakin'asks these questions with health care for some reason. Its just assumed we got to get somebody to fix the price problem on the demand side.
Well, Marx said that supply creates its own demands. So obviously the solution to high demand is to limit supply.
Case in point. In the '90s Canadian provinces and federal gov't were in a severe budgetary squeeze. No more revenues were to be had by increasing taxation, deficit spending had driven some provinces into lower bond ratings, and the fed was clamping down on spending to get rid of deficits. Probably where the US will be in the next few years.
Some health economists proposed that the real problem with health care, the cause of the inexorable increases in costs were too many doctors and nurses. The provinces jumped at it since it was a quick way to cut costs.
The system survived only by very large infusions of cash made available by the thriving economy of the last few years. No one dares bring up the efficiencies of central planning anymore.
And speaking of rationing, most provinces pay some specialists, specifically surgeons, to do nothing. It is cheaper to pay their wages than pay them and their associated team to do procedures.
Derek
Derek - why do you always lie about Canada? There are enough Canadians who read these comments that you'll get called out on it. Canadians are not suddenly opposed to any form of central planning.
"Using the government's coercive power to decide the price of something, or who ought to get it, is qualitatively different from the same outcome arising out of voluntary actions in the marketplace."
Because it reduce supply and quality, leads to shortages, rationing and queues, it is quantitatively different also.
Also, every time you make something that can't be bought with money, you make money less valuable, and therefore reduce people's willingness to be paid with it.
Right now political connections are worth more than money, which is why people with money keep trading it in for political connections.
Isn't this attacking a very weak version of the pro-reform argument about rationing? I mean, rationing in most markets really is by price. Rationing in healthcare is only by price if you screw up your eyes, knock your heels together and wish you were living somewhere other than this reality. In this reality, most consumers of healthcare are not exposed to actual prices beyond their insurance premiums, and even that price has no impact because they have no visibility of it and no choice. The actual decisions about what care will and will not be provided it made by insurance company bureaucrats, who differ
In fact both kinds of bureaucrats make their decisions partly based on costs (ie. on prices) but with very different motivations. The government buraucrat (if we take NICE as a model since there isn't an intitution to do this in the US) is trying to enforce a certain standard of cost effectiveness based on fairly standard cost benefit analysis, the end goal of which is to get his employer re-elected. The insurance company bureaucrat is applying similarly fairly standard actuarial principles to make sure his employer makes money.
Its not obvious which of these is better - either can result in granny not getting a pacemaker. The rorscach test question is, is it better that that decision be taken based on granny's chances of being profitable for her insurer through her future premium payments, or based on her chances of benefiting enough to make up for the costs in utilitarian fantasy land? The answer isn't obvious to me.
You can actually get our of this quandary if you can find a way to make price signals actually function as they should, with also getting consequences which are disastrously socially undesirable. But you'll never get there if you pretend that the current system is close to a functional market.
My reservations with the proposed health care reforms notwithstanding, there is a big difference between rationing food and gasoline and rationing health care. The differences are two fold: first, as a society, we do not want people to go broke just because they get sick. That's a social criterion, of course. The second is economic: information asymmetries imply important market distortions. Medical practitioners have an incentive to tell you that you need more care than you really do, and you, as a layman, don't know enough to question that judgment. Insurance introduces new distortions, most of which, again, imply excessive consumption of health services. Then there is tort law, a problem which again stems from asymmetric information.
None of this implies that the Obama plan is the way to go, but it is specious to claim that the market for health care is no different from the market for food.
I can't understand all the recent hubbub about rationing. As a physician, the care I provide to patients has been rationed by the insurance companies for many years now. Sometimes it is reasonable, sometimes it isn't, but it is always done for the benefit of their shareholders.
Not anymore than the price of watermelon at WalMart is done for the benefit of the shareholders. Largely the rules are such as they are to keep people in the insurance. Offer too generous a benefit package, and the employer can't pay for it (out of the patient's production). That is why you might prefer to have a patient who works at Microsoft. Sometimes I think the rules are done for ethical reasons. That is why I admire Aetna for having Equetro, a carbamazepine with an indication for mood disorders, on it's formulary while BCBS will just have generic carbamazepine. Aetna is allowing us to treat the patient w/o cutting ethical corners.
Megan - Being certain doesn't make you right. Wright's point was that rationing hysteria is rooted in blindness/ignorance of the fact that we already have rationing. You argue that there is reason for concern--gov't rationing is worse than market rationing. Fair argument, though thoroughly refuted in comments.
One problem with your argument is that this doesn't have to be a pure thought experiment. Other countries have universal coverage, even single payer plans, and are they as horrible as you imagine? These countries manage costs by managing benefits (AKA rationing, as is already done in the private sector.) and people with means still have the option of purchasing additional care. Canada is the most frequently trotted example and they seemed to have universal fair access to care at HALF the cost of our system. What if they spent 50% more? 75% more?
Those other countries like their system and don't look to me like Soviets in line for toilet paper as your argument suggests.
The biggest whole in your "look elsewhere" argument is that the US in a sense subsidizes the medical innovation of the rest of the world. If these other systems work so well, why do they have to coerce our pharmaceutical companies into selling drugs at a much lower cost there than here? Why is so much more medical innovation performed in the United States that anywhere else?
The problem with your (or rather Megan's) "medical innovation" argument is that you (nor Megan) seem to have a clue about the cost of this subsidy. Is it really 50% of health care costs? Or maybe its just 5%. The actual number goes a long way towards the validity of your argument.
Wow that should have been "hole" in my post.
I see your point, although that was not my argument. Whatever the percentage this costs the US, it is obviously a cost the rest of the world refuses to pay. One way or another, if the US were wiped off the face of the earth tomorrow (God forbid, and only as an extreme analogy obviously), the rest of the world would have a huge problem in terms of continued medical innovation.
For numbers, both on innovation and spending (this article is from 2006, but the landscape has hardly changed), see this article
http://www.nytimes.com/2006/10/05/business/05scene.html
Is that arrangement (that we subsidize medical innovation for the rest of the world) acceptable?
Absolutely not, but there's little we can do about it (see response to trrl below)
Other countries engage in bargaining to reduce the cost of drugs for their consumers because they can. It is an illustration of the economic power of large groups. Individual insurance companies also negotiate costs, but because they are smaller, their negotiating power is less.
It is certainly true that sick people in the US subsidize drug development for the world. But if a subsidy is truly desirable, perhaps that it should be in the form of direct grants rather than hidden in the cost of drugs that our consumers buy.
This is like saying Medicare/aid spend less because the government is better at "negotiating" prices with health care providers, and it's complete nonsense.
Foreign countries continually hold pharmaceutical countries hostage; these countries tell the companies that they can either sell the drugs at cost, and at least recoup some of the R&D/production costs, or the countries will illegally manufacture generics and the companies won't receive a dime.
As far as using direct grants, we already do that. However, and this part is more opinion, I would rather have multiple independent companies working with their own budget than rely on government subsidies for innovation, which have the potential to be cut quickly during recessions or budget crises.
By the way, what makes you think direct grants are any more or less "hidden" than what our consumers buy? I'm not necessarily disagreeing that Pharma doesn't have some questionable expenses, but more saying that so does the government (3 new planes for 550 million, for example).
Given the way people around here shout that providers won't provide care to people on a public plan because of negotiated prices -- and Medicaid/Medicare are held up as an example -- I'd have to think that they do spend less.
Where they fall apart is not in the price per procedure, but in paying for unnecessary things.
And as for grants being cut during recessions/budget crises; I'd suggest it's just as likely they'd be cut during "anti-government" terms, where all government spending is deemed to be bad.
Zic;
In using Medicare/aid as a reference in this context, I meant they do spend less, but bargaining is somewhat of a euphemism. In my experience, Medicare/aid set prices and say take it or leave it, which I suppose is kind of bargaining, but not really. In fact, foreign countries "bargaining" with out pharmaceutical companies are even worse, saying take it or we'll make it ourselves, you'll get nothing, and we'll still get the drugs. I also am hearing more and more that physicians are refusing to treat medicare/aid patients, but haven't been able to find any literature supporting the claim.
In re-reading your post, I may be a little confused on what you mean - are you saying Medicare/aid pay less, or public plans in general, or both? I guess it's obviously both, but I think you run into problems either way.
I agree that they're paying for unnecessary things, and what I meant to point out was that I think the fee for service is often the cause of paying for unnecessary things.
Also, point well taken on "anti-government" spending cuts.
Nola Dawg - Aren't you describing a situation in which patents (government intervention) are interfering with the market by creating a temporary monopoly?
One of the other problems that isn't discussed here is the inefficiency of the prescription drug market. How much money is wasted on drugs that have little or no benefit over placebo, or money spent on new expensive drugs (because of marketing) when the old, cheap drug is better. I work in behavioral health and see this all the time.
Maybe it's more efficient than the alternative, but this does not appear to be a small problem.
McKinsey recently investigated the cost of medical care in the US:
http://blogs.tnr.com/tnr/blogs/galston/archive/2009/07/23/what-mckinsey-could-teach-obama.aspx
Yes the innovation subsidy is an issue but it's by no means the whole story when it comes to the relative expense of health care in the US vs. elsewhere.
Well, first of all, no one is proposing Canadian style rationing where you cannot buy private health care. Very few American liberals would even want that. Most want a French style system where there is a generous single payer base and private supplementary insurance or cash payment.
Also there are two important differences between health care and your other examples. First we can provide an adequate amount of other goods necessary to prevent death relatively cheaply, whereas with health care our expenses rapidly escalate almost infinitely. Second the cost for the basic necessary amount of other goods varies little from person to person. Not so with healthcare.
So, yeah, like food, shelter and other necessities we want the government to provide a basic necessities package to those who can’t afford it (which liberals argue is a large number of the uninsured – and there are many underinsured), but since we can’t possibly afford to provide enough to prevent death in every case we have to ration.
Now there is an argument that we should only focus on the poor and let the market take care of the rest; however, the extreme variance of necessary health care costs amongst different people complicates that. Like other expenses where there is a lot of variance in potential costs we want to set up insurance to pool risk. But again we have two problems that make health insurance unlike other insurance markets. First we aren’t willing to let people suffer the consequences of foolishly choosing not to purchase at least minimally adequate insurance. You don’t have comprehensive car insurance we will let you go without a car after a wreck. You don’t have house insurance you can live in a shelter, public housing project, or section 8. You don’t have health insurance we won’t just let you die.
Second, and more importantly, adequate health insurance will be prohibitively expensive even for many middle class people given the following: a) high cost variance from person to person, b) particularly expensive health care necessary at the extremes, and c) that insurers are often able to learn whether a potential client is likely to be relatively cheap or relatively expensive. Thus say a middle class person who has a kid with leukemia can’t afford insurance. And unlike having a hefty car insurance bill because for someone with a lot of speeding tickets, I don’t really regard having a kid with leukemia as either morally blameworthy or something you can deter through financial incentives. I don’t know if there are any studies, but I get the impression that a lot of more expensive conditions are caused by these type of things – perhaps even a majority. So unless you want to screw over a number of people who have done nothing worse than become sick the healthy need to subsidize the un-healthy by going into the same insurance pool at roughly the same cost either by community rating regulations or having our tax and regulatory system ensure that everyone who works for one employer is part of the same group at the same cost. Or through a national health care system. So we are going to have government interference and quasi rationing in our health care system – right now we just have a really bad version thereof. Hopefully, we can make it better.
>Well, first of all, no one is proposing Canadian style rationing where you cannot buy private health care
So what you are proposing is a system where those wanting timely care, or care not provided by the scientists in Washington, they would have to pay for their health care twice. Once through taxes and fees, and a second time out of pocket.
Derek
Incidentally, there is private insurance in Canada. I had it when I lived there. I got it through work. It covered things like ambulance transport, physical therapy, orthodontia, private hospital rooms, etc...
There's no doubt that surgery is rationed in Canada, but you're still allowed to buy a lot of things out-of-pocket.
Hmm, and yet not one word in comments or Megan's diatribes do we read about the enormous wealth transfer from younger, healthier people to old, and let's face it, sicker people. Most of those entering Medicare (that big lovable government health scare scheme) will die within 15* years yet we'll spend enormous sums to give them a year or two of extra playtime with the grandkids. I'm not unsympathetic to the claims that society 'owes' them for their long lives spent in toil, yet, my sympathy becomes somewhat diluted when confronted with lives spent smoking two packs a day (yes, I know, smoking is declining, but throw in all the other things we know are life-shortening). What do we spend on enabling retirees to spend richer more fulfilling lives in lieu of that extra year or two of life spent going to and from the hospital? Of my four grandparents, I was extremely lucky to have three of them around for all of my childhood. Two could afford to pay for their own medical care yet paid for virtually none of it. The third that was dependent upon medicare needed very little medical care and was never more than an overnight patient (twice). Only one had a condition requiring long-term care. They focused on living their lives and when the end came, there was little suffering and much discussion of the full lives they had lead. Comparing my own experiences to others leads me to believe, anecdotal-ly, that it's not common. Instead there's the immense efforts to prolong life at great cost. I'm not arguing for physician-assisted suicide, but I am positing that perhaps we focus too little on living. Living well extends our life spans more than the extra prescription at much lower cost to society.
I'll say it: Most MDs aren't worth what they are paid given the result. Invest in research for chronic diseases; invest in preventive care; be brutal with those who insist on smoking. Tell those with high cholesterol and blood pressure that drugs along won't do it for them and that they may live shorter lives if they keep it up.
In fact, I'd love to see a price tag put on expensive procedures so that those who insist on every possible treatment know what it costs all of us. At least they'll have a reason to thank the taxpayers.
We can't all go to the Mayo Clinic and most of us will never have the quality of care offered at the Mayo Clinic. So what? I'm out living my life as if it doesn't matter where I'll spend my last few days - which preferably will be spent in my own home.
*average life expectancy in the U.S is 78.54
Those 'older, sicker patients' that are 65 have been paying into Medicare since they were 21. Medicare was the health care progressivism and improvement of forty years ago. It was, after all, fought by the evil AMA which saw it as a step to where the progressives want to take us now. Maybe that's part of why progressives think they own it now.
Do you really think we need to tell people eating unhealthy foods that it's doing bad things to them? They are already thoroughly aware of it.
Yes, I do. I believe that's what we owe to them, and, in some cases that may be all that we owe them.
Alas, Medicare is not a 'savings account' to pay for your care when you're old. The money they paid then paid for the people that were old with some going to a T-bill buying trust, and right now my Medicare dollars are rolling right out to the people getting the care today.*
But wait, I'm not arguing against Medicare. I am arguing against the sense of no-holds-barred-you-owe-me-every-possible-treatment-with-no-cost-to-myself attitudes that seem to have taken hold of a significant portion of the over-65 population. Basic medicine: yes. Extending life without taking on some of the responsibility, no. Yes, I could draw that line.
*Indeed, 2008 was the year in which Medicare expenditures exceeded receipts. Try to stop that train from gaining speed.
Let me tell you what rationing is like in Dallas County. If you don't have insurance or sufficient money, you go to Parkland. The only discussed rationing I know about occurred in dialysis. They decided after entering 21 Mexican citizens in the program, they were going to have to limit it to US citizens henceforth. The same I don't believe occurs if you are embarazada, I love the 'noncognate' Spanish word for 'pregnant,' in which program infant mortality is half the national average. All of this is not without benefit to the citizens of Dallas County generally; UT Southwestern builds nationally known training programs using the patients. So maybe those who live in a state or county where care is rationed ought to move to Dallas or some other area with more generous benefits. And maybe Obama could back off as Peggy Noonan constructively suggested and use our 'Nazis' to deter Iran.
I see many arguments that the laws of economics shouldn't
The problem with our current system is TOO MUCH government intervention, not too little. As Milton Friedman so eloquently showed in his book Freedom to Choose, government licensing of doctors and nurses leads to higher prices with no real increase in quality. Doctors spend a lot of time training in areas of medicine that have little or no application to their respective specialties. This amounts to costs that are passed on to patients.
Tax deductible employer-provided insurance is not real sense that fire or car insurance is; an insurance against low probability events and not routine maintenance or minor damages. This is due to gov. regulations, not the free market. The result is indirect and therefor inefficient costs for these services.
Functioning markets do not ration! Markets set prices and producers and buyers make individual decisions based on these prices. Markets do not prevent anyone from producing a good or service if they are willing to invest the resources to do so. Likewise, markets do not prevent people from buying goods and services within their budgets. The individuals decide how they will spend their money. Individuals decide if they spend their money on a new car every few years of if instead they want some elective surgery, a new lcd tv versus a new computer, a fillet Mignon in a fancy restaurant versus a Big Mac, etc. The whole process is how an economy allocates resources based on peoples' preferences.
In a rationed economy, such as that proposed for health care reform, the government or some other decision maker decides how much the producers produce of an item and they also decide how much individuals can buy or use. The governing body artificially sets prices, and these prices are not signals to users or producers. There are no profit motives to create efficiency incentives or to reallocate resources to meet excess demand with extra production.
One of the differences between rationing and a market is that rationing creates tremendous inflexibility and rigidity in production and use that does not respond to changing needs, demands and resource availability and scarcity. Black markets often spring up to compensate.
If government only bakes bread instead of making pasta, you will eat a lot of bread and no pasta. A market-based system will never allow something like that to happen. A government-planned system could. Just visit Cuba or read about Russia thirty plus years ago.
Anyone who says our capitalistic system rations does not understand markets and market pricing or they are just trying to make health care reform look better based on incorrect logic.
Many have written much about how our current system of health and tax laws distorts the health marketplace. The employer tax deduction grossly distorts the price signals to the users and to the suppliers. The list goes on and on, but the President is not willing to propose anything that will restore accurate pricing signals to the health market place. A normal price signaling mechanism, as exists for almost every other product, would end most of the problems we see in health care today.
Likewise, markets do not prevent people from buying goods and services within their budgets.
But the nature of medical care certainly does. Can you really have a market of the type you posit here if the prices of certain ABSOLUTELY NECESSARY items are practically infinite?
Who proposed a rational health care economy? All the existing bills but one propose a government-owned insurance company, and the other one doesn't even do that. You have no idea what you're talking about.
Think about this: how is price determined for medical care? Then ask yourself this: how is price determined for say a tv?
Obviously, the market optimizes the price of the tv based on demand. Price the tv too high and the demand drops and you lose. Price it too low and...you get the picture eventually the price gets optimized to maximize revenue. Now in health care you have (approximately) a demand that is constant. If you break your arm you need to get it fixed, end of story. So what happens to price now that demand is held constant (i.e. at what point is revenue maximized)? A gold star to the plucky libertarian who can answer that one. Once you understand this I think it becomes pretty obvious why a free market based health care system is so expensive.
I work in a field where people really need my services quickly. They pay accordingly. And I might add, willingly.
What the free market excels at is allocation of resources.
So in your example, what does fixing a broken arm cost? What are the doctor, triage nurse, assistants, the radiologist and anyone else involved worth? What levels of pay, what incentives are needed so that when your or my arm is broken, it is worth someone's effort to be there to fix it? One jurisdiction of the wonderful central planning system we have here has forced doctors to man emergency wards where indicated. Forced by threatening to remove billing privileges. All because some silly central planning created a severe shortage of doctors. In an odd way that has been a benefit locally. Doctors left to work in more reasonable jurisdictions.
So let me ask a question. On what basis do you think that the bill you would get for fixing a broken arm is too expensive? And why do you think that provision of that service by government would be cheaper? Or is what you are really asking for is that someone else pay for the services that you consume?
Derek
I'm asking perhaps the most basic econ question imaginable. It concerns price discovery. What price will the market "find" for these medical services?
You're asking the economics equivalent of a perfect sphere sliding across a completely frictionless surface. Cute, but aside from demonstrating a principle, kinda useless in real world situations.
I'm impressed with the point/counterpoint tenor of this thread. It seems to me that it is in the spirit of much of our legislative history - going back to the constitutional convention.
Contrast this with how the peoples business is carried out today.
This legislation would be the most far reaching in many generations. Most of our representatives have not read it. I'm not sure that many of them even know who wrote it - I don't. The house leadership pushed as hard as they could for a floor vote before the August recess. No discussion, no point/counterpoint, no argument.
Our system of health care has problems for sure, but they pale in comparison to those of our system of government. I think that health care is in "serious but stable" condition - government is in "grave" condition.
Megan, let me tell you about my 16-year old son's experience. He studied clarinet weekly at the home of a 40-year-old couple in Palo Alto who had lost their health insurance when the San Jose Symphony folded. A middle class life is out of the reach of a couple who takes in music students in high-cost Silicon Valley..(is it starting to hit a little close to home?) The husband, a violinist, developed a brain tumor. My son got to watch first hand, week-by-week as this accomplished man died untreated. His wife nursed him. She had to lift him with those clarinetist hands. It required that she keep a helmet on his head in case she fell. (getting a little uncomfortable?) It turns out that brain tumors kill fairlly quickly, though it is horrific as the patient become disoriented and paranoid and hostile. He died about the time their electicity was turned off but before they were evicted. I can assure you that no barbarous economic argument will sway my son about the merits of your "insights" on rationing. We need grown-ups involved in this incredibly important debate. Your problem is lack of imagination. read Rawls. You don't really know your place in this lottery, either.
I can supplement this with what happened to my cousin. When she developed breast cancer, her employer fired her because she was taking too much time off for doctor's appointments. In principle, of course, she could have brought suit, but she had more immediate concerns. With no income, she could not afford her health insurance. She could get publicly funded health care...but only by going to a public clinic and waiting for hours. But she couldn't do that because she needed to work to pay for rent and food, and she couldn't find a new job that would let her take off hours and hours for doctor visits (not to mention that nobody was in a hurry to hire somebody who was sick and likely to get sicker). Faced to choose between getting medical care and ending up out on the streets, she chose to work.
She died.
You are absolutely right -- this is a stellar argument for why all of us should have publicly funded health care!
Your cousin. This implies she had family yes? Where was it? Are you telling me that out of the family she had no one would have been willing to help her get by while she got treatment? Are you saying that had she gotten treatment and survived(not a certain thing at all mind you)she would not have been good to pay her family back? What you are describing is not in fact a problem with the health care system.
Is your argument really that somebody who does not have family who are in a position to support them during a protracted serious illness should be allowed to die?
Now that seems to be a rather extreme case of rationing....
Ignoring my point I see. Ah well, to answer your side-stepping there comes a point where without infinite resources, cases like you describe MUST occur. Hell, the entire idea of rationing health care demands it. It is merely a question of who gets the axe and other potential side effects of the system.
Back to your cousin. What makes you think that she would be have gotten effective treatment at all under the proposed health care plan? Without knowing when(year) she developed the condition, along with what stage and type of breast cancer, you have absolutely no way of saying the .gov would even have helped her. Well, aside from suggesting pain pills. For that matter, you have no way of knowing if whatever treatment the .gov did authorize would have been invented and distributed in the first place if the .gov had instead taken over health care in the '70s.
Did he go to Stanford University Hospital and see what might be available? The head of the neuroradiology department there recently had an article on the fact that people survive longer after cancer than in countries with 'government health care?' It was abstracted on the blog Volokh conspiracy. Did he go to the Snta Clara County hospital? They have board certified publicly employed cancer specialists. It's hard for me to imagine that 'government health care' for cancer is going to be any better than what is currently available in Santa Clara county.
Interesting story.
Despite all of this, I still don't understand from where you, or anyone else would, derive that their plight gives them the right to virtually knock over a liquor store to get the money to pay for whatever care or assistance they needed.
You do realize that voting to use government force to take money from person A and give it to person B is not different from robbing person A, correct? Do you really think it makes a difference what you do with the money?
Here's an idea - Have all their friends get together and host a benefit concert somewhere. I know a small college town where this happens all the time for musicians and former musicians who have no health care but find themselves or a family member in need. Other musicians donate their time, and local venues offer their space either for free or a reduced charge, and you accept donations at the door.
Yes, I believe that coerced taxation is *always* robbery no matter what the purported reason; and no amount of anecdotal evidence on any level about any subject can either change that basic fact, or make the act of theft a moral one.
The most amusing thing in all of this is watching the hypocrisy of the modern libertarian being fully exposed. None of the libertarians here are willing to admit that you are able to make these glib little Randian arguments only because you know that you'll never have to live up to your side of the bargain. You'll continue to be parasitic on the state and society until you die - and you'll whine about it self-righteously all the way. None of you have gone to Galt's Gulch, and none of you ever will - because you know that you simply wouldn't last five minutes in the barbaric world you idealize so much. As for the nonsense about free markets being the panacea, just remember that you really wouldn't enjoy having someone who got ahead of you in the race to grab resources turn around and tell you that you don't get anything, because they don't see why you should. That's where all this strutting libertarian talk will get you - someone meaner and bigger kicking your teeth in, and claiming the goodies for him or herself. But of course, the adults in the room will keep saving you from having to actually live by your principles.
We are parasitic on the state the way a dog is parasitic on the fleas, the way slaves are parasitic on their masters.
If we are dependent on the state, it is because we were forced to be. All other options have been systematically taken from us. Yes, I bite the hand that feeds me because it's the same hand that chained me.
We are taxed to buy guns that not only kill those that don't threaten us, but that are pointed at us as well. Should we be grateful for the gruel that our masters provide? for the medical care that allows us to be productive tax livestock? for the roads that were built without our consent that the cops use to terrorize commuters? Who grabbed the resources? The government own most of the land while taxing and regulating the use of the rest.
We pay taxes to buy a car, to license a car, to register a car, to fuel a car so we can drive to work to pay income tax. We are forced to contribute to a "social security" system that Bernie Madoff could have designed. Now you want us to trust our health care to the same folks that runs Walter Reed?
Bearded Spock: it was a pleasure to read your post. It made my day. Hell, yes!
I lived 30 years of my life in a centrally planned healt care and country. No freaking way I am going to allow it to happen to me again.
Please explain the difference between sixty percent of "the people" voting to "...grab resources turn around and tell you that you don't get anything, because they don't see why you should..." is any different from one person doing it with a gun.
In both cases, might makes right, yet you and those like you seem to think that in the former, it's all good because we "voted" on it.
I'll add one more thing to what Spock said:
When the forty percent decide they've had enough and turn on the sixty like a Doberman with a personality disorder, please don't act surprised and don't go calling them un-American or childish because they're tired of being robbed at gunpoint to supply you with whatever it is you happen to need today...
And what stops you selling up and dropping out? Buy yourself a couple of acres in Montana. Or do you fear the consequences of living up to your rhetoric? Slaves? Only to your libertarian dogma. As for all this self-pity about the hand that "chained" you - it educated you, provided roads and bridges, made laws to keep you safe, gave you a chance to live in a peaceful and civilized society. You seem high on ingratitude, low on reality. Even the internet you use so happily began as a government project. Are you ready to reject its chains too?
If I buy land in Montana, am I not subject to property tax? Can I do whatever I want on that land or are there building codes and land use regulations?
I have have to keep paying for it and can't do whatever I want on it, is it really mine or am I just a renter?
Were slaves in the old South ungrateful when they resented their slavery? Their masters fed, clothed and lodged them. Why could they not appreciate that? After all, the whites had saved them from the brutal, barbaric African jungles. Were their lamentations self-pity?
Even the English they spoke was taught so that they could understand their orders. Why didn't they reject speaking it?
There were slaves that kissed up to their masters. They were called "house niggers" and they got special privileges. You sound like one.
Slavery was an evil institution and those that opposed it were considered radicals who were unrealistic. Now slavery has been abolished. History will judge the State similarly.
Mmmm, I wouldn't be so sure about that. The current state of humanity is highly atypical, and given the nature of the cycle, there is little guarantee that such enlightenment will survive unless we at least get extra-planetary in out living space.
Slavery? Spock, you should think about what a ludicrous comparison your very comfortable modern life makes with real slavery. Were you dragged from your family, sold to foreigners, beaten, raped, incarcerated in a filthy hold, sold on to the cotton fields, beaten, abused and finally shovelled into a cheap grave? Well? And what exactly do you suffer? None of these things. As for the comparison with the state whose laws protect you from your own folly, you'd have to be either deranged or hypocritical to take such a comparison seriously. So you pay property tax? Diddums! Why don't you try moving to Somalia? You'll find lots of people happy to educate you in what lawlessness looks like? Hell, some of them will throw in a free slavery experience for you. Yes, I'd like to see you try living in a stateless area, without laws, without protection. But you never will - because you know you wouldn't last. You'd find someone bigger and meaner beating you into submission, making you his bitch - and with nothing to stop him. Are you sure you really want to try escaping your "slavery"?
People aren't dragged from their families, beaten, abused, incarcerated and raped in prison in the War on drugs? Who disproportionally suffers in that war? The bourbon-drinking, cigar smoking descendants of slave-owners or the pot-smoking descendants of former slaves?
I'll never live in a stateless area because there aren't any. All land in the world is claimed by one or more states. Even Somalia has a government, one supported by the U.S. Gov.
Maybe I would perish in a jungle, but it would be my choice. At least there you know who your enemies are. Do you want to be a wild boar unprotected and hungry, but free? Or maybe you are domesticated and happy feeding at the trough, trying hard to ignore the smell of bacon wafting in from the farmhouse?
You can make yourself into an animal if you wish, Spock. I prefer to be a rational human being, living in human society, and avoiding the creation of spurious images, insincere rhetoric, and advocating for a system of thought in which I do not really believe. If you believed in libertarianism, you'd do something, rather than whining about being a slave in such hyperbolic and unconvincing terms. Sell your stuff, move to Montana or Somalia. Put your principles into practice and drop out. But you don't really want to - because you secretly like your comforts too much. You can't even quit the government-created internet!
Camp, your point is the point that Megan and others seem to be missing. The point is that rationing by the government in the case of health care would be less onerous than rationing by the market. We have come to that point.
If you have an average salary, you can afford plenty of food. Yes, the market rations food. But most people can get it, and plenty of it.
We have come to the point that even if you are fairly well off, unless you have a job that pays for it, or Medicare, in other words someone else is paying for it, you can't afford health care and it is going to get worse.
Many average people are being ruined by the lack of health care, or worse what is happening to your son's friend.
Maybe if we could go back to the beginning and end all government regulation for the libertarian purists, maybe they would be right and health care would be less expensive and more readily available to more people.
But we are too far down the road of government take over, to really adopt the libertarian path we would need to end Medicare and I just can't realistically see that happening.
I just can't realistically see Medicare remaining solvent. It is already drawing on it's trust fund, increasing the federal deficit. Liabilities are growing exponentially. At some point, we will run out of suckers to buy treasuries and the government will have to either make draconian cuts or print the money to pay for it. Look to Zimbabwe to see if that option is better than the free market.
Beautifully said, napablogger.
But we are too far down the road of government take over, to really adopt the libertarian path we would need to end Medicare and I just can't realistically see that happening.
That's it, right there. At this point, the Libertarian path amounts to a grand experiment - and we are out of time. Does that suck? Yes, it sucks. Tough. We're past the point where we solve for perfect or where ideology matters.
@Bearded Spock
I just can't realistically see Medicare remaining solvent. It is already drawing on it's trust fund, increasing the federal deficit. Liabilities are growing exponentially. At some point, we will run out of suckers to buy treasuries and the government will have to either make draconian cuts or print the money to pay for it. Look to Zimbabwe to see if that option is better than the free market.
Totally agree.
However, it is also clear that we can have health care at least as good as what we have today - by objective metrics - by cloning any number of currently operating national health plans. We can do this at half the cost we currently pay; we can greatly slow the growth in cost.
We happen to very much dislike the form they take. Again, tough, as pointed out, we're out of options.
Is that perfect? No, it is deeply imperfect. Could a true market based solution be better? Maybe - we don't know how much government oversight our eventual market based approach will need. The market clearly has structural imperfections that will require some form of oversight even once we kick out all the legal impediments we have today.
But the kicker is, as noted, we are basically out of time and we are running out of money. Other people have solved this problem and the clearest path we have out of the mess we've made for ourselves is to follow the path they've blazed.
"we already ration health care; we just let the market do the rationing." This is a true point made by...
True? Forgive me, but...?
How the hell can a reputable working journalist say this?
Words have meanings. Resources can be allocated either by a market or by rationing.
To conclude from that that markets ration is right out the Newspeak Dictionary.
A task is being done: allocation and distribution of goods.
There are two different methods for doing this task: market allocation and rationing. They are not to be conflated.
And indeed, this was an argument that was made in favor of socialism
Of course it was! It's perfect IngSoc. That's why it's in the Dictionary.
With every success in defining away the essential difference between what markets do and rationing boards do, the Party advances.
But wasn't Orwell making a point about the importance of protecting the true meaning of words -- and the importance of grammar too?
(We can do something essential [allocation] via the options of two distinct competing methods, one of them inferior [markets v rationing]. Then we slyly rename the inferior option as the essential thing being done [we are no longer allocating, we are rationing]. Now there are not two options competing. The inferior option, formerly at risk of being competed away, is the essential thing we are doing. The superior option now is the only thing left to criticize -- and becomes subject to permission, contingent, optional. ["We already ration, we just let the market do it"].
IngSoc advances.)
Logically,
"we already ration health care; we just let the market do the rationing"
... is the same as ...
"we already market health care; we just let the rationing board do the marketing"
Because "ration" does not have the same meaning as "allocate" or "distribute" any more than "market" does.
This post makes my point, below, better than I did. Very well said.
Let's cut to the essential here.
Those who believe that "the market" should determine who gets or does not get healthcare are social Darwinists who want the "unfit" to be euthanized by the "invisible hand."
.
So those who believe the government should make the determination are social Darwinists who want the "unfit" to be euthanized by the visible hand?
In all seriousness, I like this post, but disagree with conceding the rhetorical ground of calling what a market does (even a highly distorted market) "price rationing."
The reason this "we ration already" argument is employed is to imply that there is agency behind the the so-called "price rationing" in the same sense that there would be agency behind goverment rationing.
But government rationing and price "rationing" are different in kind, not degree. This is irrespective of whether you think the goverment ought to ration health care, or whether you think current proposals would do so.
A perfect summary of liberalism: a profound inability to understand how systems work matched only by their obnoxious moral preening.
You probably were not aware that "the market" includes charitable organizations. Which the opponents of your position donate more money to that the proponents, and always have.
Even the most famous "Social Darwinist", Herbert Spencer, wasn't for the unfit being euthanized by the invisible hand. He merely against "the dole". In fact, he puts you to moral shame. He actually put some mental effort into understanding societies problem whereas you haven't.
You can dispel some of your ignorance by reading this article: Herbert Spencer:
The Defamation Continues
So after reading that don't you feel foolish having believed all those lying liberal professors who schooled you on "Social Darwinism".
Pick up a book and stop relying on second hand sources. Social Darwinism was a cheap smear back then and you're a cheap person for using it now.
The problem is that anyone supporting non-market mechanisms for providing health care is an economic ignoramus. That includes ignoramuses like Paul Krugman. Yes, you can have a PHD in economics and be absolutely clueless about economics, that's how we got in this mess.
I'm with Jim Glass - if you define market allocation as "rationing", then you need a new word for rationing.
It's true, I suppose, that most of us can only purchase so much caviar in a given year. But if the government passed a law that said that it was setting limits on the amount of caviar that any individual person could buy, I think we would reasonably understand that to be "rationing" in a sense distinct from that which came before.
It's also true, as Sartre wrote, that we are all imprisoned by fate - none of us can possibly travel to the sun, be in two places at once, etc. Still, if the government put us in cells and locked the doors, it would be small consolation that we were already imprisoned by natural laws, now we are just being imprisoned in a different way.
first of all, you dont need a new word for market based "rationing". if you are denied coverage for whatever reasoning, the health effects would be the same.
second of all, in many other countries, when a health service is not covered in the national system, the consumer can buy private health service to have the procedure. there is no law passed in that country saying you cant get the procedure. and so by your argument, that is not "rationing", right? in that case, if we do the same, then there wont be "rationing" here, by your logic.
in what section of the bills now in play that would make procedures ILLEGAL to have because of the cost? your reasoning is tripped out nonsense.
"Other people have solved this problem and the clearest path we have out of the mess we've made for ourselves is to follow the path they've blazed."
Wait, who would that be? Which nations are these that has dodged the demographics bomb set to blow the entire Western world apart?
I suspect you are suggesting emulating the nations that have boldly thrown themselves out of the plane without a parachute. Sure, the view is great and the wind is in their hair. For now.
Somebody with a shred of honestly needs to sit down and REALLY look at the entitlement crisis we've already purchased, and come up with a way to keep it from disintegrating into a heap of civil upheaval and collapsed governments. I'm pretty positive the answer will not be "we need to spend huge new amounts".
How much is your life worth? In a free market for health care, your life is worth precisely the amount of money you have available to you. If you require more health care than that, then a free market has unfortunately constrained you to death.
In a government system your life is worth an amount equal to all others. This may be less or more than it would be in a free market system. I would call this a fairer system, however. What would you call it?
In a government system your life is worth an amount equal to all others.
No, it's worth an amount determined by an unelected group of appointed bureaucrats based on standards that can be changed at will.
I still can't understand why liberals think that government is full of benevolent saints, despite what (according to them) are 8 years of incredibly strong evidence.
Government certainly has its fair share of bad actors, but it IS beholden to the constituents based upon it. Were the last 8 years bad (from my point of view)? Yes. And I lobbied and worked hard to change the operators within the government, and have been quite happy with the results.
Perhaps the key is that if government healthcare at its worse is run by a group of bureaucrats appointed by elected officials, I would still have more control over that than any makeup of the bureaucrats that make up any current healthcare insurance board. I elect the officials appointing the governement panels, what control do I have in the makeup of the business ones?
"And I lobbied and worked hard to change the operators within the government, and have been quite happy with the results."
Since the vast majority of policies enacted by the new administration are the same as the old your satisfaction seems to be driven by partisan politics.
"I would still have more control over that than any makeup of the bureaucrats that make up any current healthcare insurance board."
In the government solution there is one board, with no reason to improve. Multiple insurance boards will compete with each other and with the government as a critic. Competition improves honesty. If you're curious how your influence will work on government consider how Obama has kept his past pledges of transparency. Then consider how his administration has shut out people reacting to the healthcare reform and stimulus plans.
What happens if you lose? Would you prefer your health care managed by Bush appointees or the market?
Nonesense. Your life is what some politician decides it is worth.
Two examples. Right now the Alberta government has hired an aussie consultant to rationalize health care spending. The end result is cutting operating room time, limiting procedures, etc. Alberta has had probably the only reasonable service levels in Canada. As a result of the provincial government trying to get more revenues, less investment is happening, and they are getting less. So their stupidity and greed is causing some poor sod to wait and possibly die.
Second. A couple of years ago some fellow from Quebec sued the goverment on the grounds that he was being denied his right to security of person by the laws against selling health insurance. Due to the extreme waiting lists for 'elective' surgeries, his quality of life was being diminished directly as a result of government policy. The courts agreed. The decision was applicable in Quebec only, but every other jurisdiction saw the writing on the wall. So what did they do? Came up with a 4 year plan to reduce waiting times for cancer treatment, heart treatments, orthopedic surgeries and a couple of other things. What that meant was resources were taken from other disciplines to focus on the 4 year plan. Sound vaguely familiar?
So if you had the bad luck of not having the disease du jour, you have to wait even longer.
The system in the US has it's issues, and in some ways is broken. It is worth considering the real possibility that a bill in Congress could make it dramatically worse.
One way that I can see it getting worse is a sizeable percentage of doctors currently practicing quitting. The regulatory burden will increase, more paperwork and forms. Why bother.
So a question. What percentage of doctors stopping practice would create a crisis in the US system? And has that question been addressed in the current debate?
Derek
"If you require more health care than that, then a free market has unfortunately constrained you to death."
Really? So anyone that can't afford health insurance can't get health care in this nation? That's news to Medicare, Medicaid, and VA recipients, as well as free clinics and ERs around the nation under the impression that they will treat anyone regardless of ability to pay.
"In a government system your life is worth an amount equal to all others. This may be less or more than it would be in a free market system. I would call this a fairer system, however. What would you call it?"
But, of course, this is never the case. Elites will ALWAYS get better treatment, up to and including the most socialist systems ever tried. Moreover that deal may seem favorable now, but in 20 years when the books just can't be balanced it may well seem quite otherwise. The market is many things, but rarely arbitrary. Generally people who have worked hard and made good decisions are rewarded. Governments job used to be to provide a net for the unlucky. We can still do that. But these government healthcare schemes go far farther, and the result will be arbitrary decisions made by faceless bureaucrats ruling over all the people that do make the right choices and do work very hard, all in the name of 'fairness' for those who don't.
The first requirement for health reform should be the majority right now who are happy with their care should not be used as fodder in an effort to lift up the balance. The question should be- how do we plug the gap of the remaining uninsured affordably.
"Really? So anyone that can't afford health insurance can't get health care in this nation? That's news to Medicare, Medicaid, and VA recipients, as well as free clinics and ERs around the nation under the impression that they will treat anyone regardless of ability to pay."
Yes, really and truly. Those plans you've just cited ARE government health care systems. Without them, the free market would be constraining many people without the means to pay for their healthcare to death. My impression towards the free clinics and ERs were that they were likewise government backed. I'm open to proof that this isn't the case, of course.
"But, of course, this is never the case. Elites will ALWAYS get better treatment, up to and including the most socialist systems ever tried. Moreover that deal may seem favorable now, but in 20 years when the books just can't be balanced it may well seem quite otherwise. The market is many things, but rarely arbitrary. Generally people who have worked hard and made good decisions are rewarded. Governments job used to be to provide a net for the unlucky. We can still do that. But these government healthcare schemes go far farther, and the result will be arbitrary decisions made by faceless bureaucrats ruling over all the people that do make the right choices and do work very hard, all in the name of 'fairness' for those who don't.
The first requirement for health reform should be the majority right now who are happy with their care should not be used as fodder in an effort to lift up the balance. The question should be- how do we plug the gap of the remaining uninsured affordably. "
I'm not sure your claims hold up. Referencing your points above, I've never seen any claims towards Medicare, Medicaid, or even the VA that someone was denied care based on some Elite/not-Elite status.
Tangential to your point, I'd still want to save the life of people who didn't work hard, or who made bad decisions. You didn't claim otherwise, but I wanted to be clear.
More on point, the healthcare reforms currently being discussed do exactly what you say you favor: they provide a safety net and attempt to plug the gap of the remaining uninsured.
Healthcare exchanges simply allow for insurance customers to have a wider and fairer choice between different plans; they enhance competition. The public option serves a similar purpose. I'd prefer a move to a more government controlled system, but that isn't on the table at all. Why debate it?
What do you mean by government backed in the case of free clinics and ERs? Some clinics are likely government funded, but many free clinics are funded the same way many homeless shelters, food drives, etc. are funded: donations and charity.
As far as ERs, this is my experience in New Orleans. Most non-insurance cases funnel through the LSU School of Medicine Hospital, currently University Hospital (while Charity is rebuilt). In this case, these patients are worked on by residents, interns, and 3rd/4th year students on rotations. In a sense this service is paid for by the government, because I understand Medicare pays a majority of the salaries of residents and interns. On the other hand, hospitals use this very, very cheap labor to make money on paying patients to provide facilities, instruments, etc. for those without health insurance. I'm not sure how exactly it works in non-teaching hospitals, however I'm going to throw out an unsubstantiated assumption: if the government does offer assistance for treating un-insured patients who cannot pay, it's not enough. I base this on the fact that I believe most Medicare/aid reimbursements to be inadequate, and the fact that hospital administrators with whom I have worked claim they often must charge paying patients/insurers more to come out even on non-paying patients.
I did a bit of nosing around and you're right, ERs aren't backed like I had thought ... I was confused by the fact that they do have to treat you. It's just if you don't pay, the hospital is simply boned.
As an aside, crazy seeing someone else from NOLA here. The internet is a small place.
I understand they are government backed- is anybody (aside from the rabid Libertarians nobody listens to) advocating abolishing them? Foodstamps work, but nobody is advocating the government take over of the food industry. Social safety nets are not anathema to the free market, and in fact they have important roles to play. Government takeover is something entirely else.
"I'm not sure your claims hold up. Referencing your points above, I've never seen any claims towards Medicare, Medicaid, or even the VA that someone was denied care based on some Elite/not-Elite status."
Thats because, as above, our elites by definition are not involved in those systems. See- Congressional health care plan. I assure you Ted Kennedy is not filling out Medicare forms. My point is that government takeover of healthcare won't affect the elites either, they will certainly retain their privileges, if not so the rest of us.
"Tangential to your point, I'd still want to save the life of people who didn't work hard, or who made bad decisions. You didn't claim otherwise, but I wanted to be clear."
I do as well. I want to save every life. I want the 300 pound chain smoker to get that 9th bypass. But at the expense of what? Healthcare is a finite demand on a finite resource. Unless you have some plan that changes this?
"The public option serves a similar purpose. I'd prefer a move to a more government controlled system, but that isn't on the table at all. Why debate it?"
Because (particularly given the dearth of details we've been doled out), it would appear the public option is well designed to move us to a government system. Hence anyone who doesn't want a government system (details of which, again, are sketchy) had better speak now or forever bow to the inevitability of a government entitlement.
And just where is this plan to have the government takeover?
So the public options is "designed" to move us toward a government system? And it won't have to compete against the well-entrenched private system? A takeover would require the failure of that private system to a degree that there's the political will for it.
But fanatical fear of what government might do instead of what it's actually proposing is what we get for debate?
Give me a break. That's just plain idiotic.
I'm sorry- so all these video clips of congressmen directly stating that this plan is just the first step to get us to single payer, plus a video of Obama stating his preference for same, are just my idiotic imagination?
The idea that private industry 'competing' with a government program with no need to turn a profit, an infinite budget, and the ability to pass law and regulation might just be a good way to marginalize if not eliminate private competition is idiotic? When Dems were freaking out about Bush 'allowing industry to right regulations', THAT was a problem, but when the government IS the industry and literally writing legislation, no conflict of interest?
Elites will ALWAYS get better treatment, up to and including the most socialist systems ever tried.
Exactly. You can only trade capitalism for cronyism.
Who thinks members of Congress or their families are going to get their care rationed? Next will come staffers and lobbyists, then campaign contributors...
I actually agree, Tall Dave, and GWB's "service" during Vietnam is a classic example.
But I disagree with your "only," capitalism or cronyism.
I have a friend, a farmer. She grows incredible vegetables, sells them at an honor stand. She expects to have a 10% loss, but that loss is cheaper then the labor to tend the stand.
Cronyism could be viewed in the same light; we can be on the lookout for it, make examples of the more egregious cases, and accept that we're going to have some loss from it while trying to demand a more effective government.
That's where we part ways. There is really no way to get a more effective government given the constraints of its current structure. I don't say this because I'm repeating some conservative talking points, I've studied public choice economics. When most voters are rationally ignorant, narrow interest groups rule. That means any public health care plan will fall victim to them. And their is no good way to fix rational ignorance, it just occurs because so many have to little chance as individuals of affecting change.
With regard to ER treatment, it isn't free. If you don't have insurance, you'll depart the emergency room with a very hefty bill. The hospital will attempt to collect it. If you don't have the money to pay your bill but don't have a low enough income to go on Medicaid, your credit rating will take a real hit. This applies with even greater force to ambulance bills. I'm sure that everyone understands this, hence the repeated references to how easy it is to get free medical care at emergency rooms strike me as disingenuous.
I have several friends without insurance (graduate students, mostly) who have had to resort to the ER for accidents or sudden illnesses. In all cases, they faced bills of 5K+.
You also remind me of an epileptic friend in high school who was always extremely frightened coming out of his seizures; he was worried someone had called an ambulance. The one time I watched him plead with the paramedics to just leave him alone and go away was painful to see.
"With regard to ER treatment, it isn't free."
Of course it isn't free! It wouldn't be free under ANY plan. Somebody will pay for it. The point is it is available. Nobody goes without emergency health care in this nation, as some would have us think.
Megan, you should realize by now that liberals are stupid.
They and other socialist wannabes have all sorts of places to choose from (France, Canada, etc.) and yet they want to force all Americans to have the same system. They should leave for one of their choices while they still can.
Freedom-loving people have nowhere to go. We will make our stand here.
".....France, Canada, etc.) and yet they want to force all Americans to have the same system....."
a liberal here. you have tapped into something, if there was a way that americans could buy into the system of another country and let the repcons sillies keep their market based system, i would love it. i live in michigan, right accross from canada, i would gladly send my premiums to canada to get into their system. it's not perfect, but the hatred and contempt many americans are showing towards any govt program except the military is getting beyond creepy.
I have been thinking for some time that the solution; the real solution to our healthcare cost issue is right under our dogs' noses. The free market.
When I take my dogs in to the vet for whatever the reason may be; a vaccine, a teeth cleaning, or even minor surgery, my vet does a checkup for a fee, and outlines for me my options; the old, Sears "Good, Better, Best" approach. She helps me to understand the pluses and minuses of each approach, and the costs associated with each. I then make an informed choice.
Here's the thing; the costs for essentially the same procedures are something like 1/20th, or 1/50th the cost that would be accrued if a human with insurance and a $10 co-pay were involved.
About a year ago, we took in a rescue dog that had been neglected. We took him to have his teeth cleaned because his mouth smelled awful. This required anesthesia. It turned out that the poor dog's front teeth were just too far gone, and so they were all removed while he is under. Fourteen teeth came out. That's oral surgery- cha ching! He then spent the rest of the day in recovery and we brought him home with some meds to ease his pain for another day or two. Total bill? About $300.
Think about that. If I told that story again, and it was a person instead of a shih tzu, with all the same procedures, same training required (maybe even more because of the variety of types of patients a veterinarian must treat), the bill would have been thousands, or even tens of thousands of dollars. All because we have removed the consumer from the transaction. And yes, their does exist health insurance for animals, but it is very similar to the old 80/20 plans where you paid the bill and got reimbursed from the insurance company. You know, back when the health care industry wasn't broken... You, the consumer, still have a stake in the transaction (20% + having to temporarily part with the other 80%, up to some fixed maximum per incident), so you, the consumer, still have an incentive to pay attention to the costs. The bottom line difference in costs for the same procedure is that THE PET OWNER SEES THE BILL.
My dogs had a much better healthcare paid by me (including staying in hospitals) than my parents ever had in a centrally run healthcare system I grew up in.
Not only do that plan to smother granny, if not with a pillow, then with gradual debilitation by not replacing hips, etc, 'til she finally gives up and goes gently into that dark night, but they have put a *Bounty* on grandma. The Dr gets extra money for *initiating* "End of life counseling", in other words the only way to avoid it is for an elderly person to tell their doctor to shut up, think about the power relationship there, or for that same person to not go to the Dr at all.
McKinsey recently investigated the cost of medical care in the US:
http://blogs.tnr.com/tnr/blogs/galston/archive/2009/07/23/what-mckinsey-could-teach-obama.aspx
Yes the innovation subsidy is an issue but it's by no means the whole story when it comes to the relative expense of health care in the US vs. elsewhere.
Thanks for that link.
It's an excellent description of all the things we fail to talk about because we get distracted by the three-headed bogey man "government's going to takeover," "death panels," and "kill granny."
I would add the problem of scatter-shot regulation, 50 states, 50 sets of rules, 50 sets of access issues, and states rights.
So that is your full and complete response to "Kill Granny"? That it is a bogeyman? The best way to kill a bogus argument is with a better argument.
I told you that I thought that withholding expensive treatments for conditions that afflict the elderly will sap their will to live, in my judgement, based on my experience watching grandparents age before all of this technology became available.
I told you that Drs are paid to initiate end of life counseling (It's in the bill, if you want to call BS, I will give you the section number, then thank you for implicitly admitting that it is a valid concern by denying it.
I told you that an elderly person, when confronted by a respected and powerful person like a Dr is vulnerable, so these sessions can not be considered "voluntary" simply because they are not mandated. If you put a bounty on wolves, the wolves are not "mandated to die", but die they will, even if they do not "volunteer". This is the fundamental dishonesty of rules and responsibility that Megan was talking about. It's all what the meaning of "is" is, to this president.
What are your cogent replies to these points? There must be good answers or you wouldn't be so confident that the arguments are bogeymen. Why not dash them off in a couple of seconds and reach an audience of thousands, many of who, apparently, do not know these simple answers either. What an opportunity!
"I have several friends without insurance (graduate students, mostly) who have had to resort to the ER for accidents or sudden illnesses. "
A) They chose to go to graduate school, and to help pay for the lost income and direct expense, they forgo health insurance. When they lose the bet they have a debt. Too bad.
B) If you are involved in a car accident, all of your care will be covered by the auto insurance. If your health plan gets wind that you were in an auto accident, they will go after that company for payment.
No argument with the first point, but on the second, the medical coverage provided by your auto insurance has a rather low cap on most policies. It will take care of the initial ER visit, and maybe one or two exams after that, but if you require physical therapy, your regular health insurance has to pick up the slack.
Found that out when I was run over by a car while still in college. Like the previous example, I had no health insurance over my auto policy and had to forgo the extensive recommended treatment.
Then you should have sued the other party, or if the accident was your fault, then you saved money on your insurance by taking on extra risk, and paid the penalty. Still not my problem. If you are going to go to the uninsured driver, and you are uninsured, and so there is not coverage, and nobody to sue, then I suggest that you are either eligible for Medicaid, or can afford insurance and choosing not to have it, then trying to stick me with the bill.
Please, Megan. "That's why progressives are so fond of rules..." This isn't even strong enough to be a straw argument.
Wow, what a riposte! I guess you showed her with your trenchant analysis of her claim! I am sure she is smarting from that one.
But what do you think comparative effectiveness and IMAC are supposed to produce, if not treatment heuristics?
Information?
And what's wrong with that? Don't you want your doctor to be informed about the effectiveness of different treatments?
I have never seen someone who called themselves a political progressive(this is admittedly a small sample size not exceeding 10, but applying the progressive label to people who haven't called themselves such becomes a subjective value judgment on my part and leaves my point much more open to criticism) who wasn't fond of rules that made things impersonal to a rather random level of 'fairness'. Anecdotally at least, her statement passes the smell test.
She is wasting her time if she expects a reply from Steve S. Unless she has some prior experience to know he is different from every other troll who throws around the "straw man" objection like beads at Mardi Gras.
To a liberal, an argument is a straw man if it is based on a different conclusion than the one they drew. For instance, if they said that the "public option" would not drive private insurers out of the market, and you said
"yes it would because it would have all but infinite tolerance for losses and would be run by politicians, who will not want to deny services, viz France. Then, to screw down the vice more, private health plan prices will be capped, I am taking Charlie Wrangle's word on this, and so private plans will be forced to deny procedures and expensive drugs or go out of business."
A liberal would say that that is a "straw man" argument because Obama said that that wouldn't happen.
You could make this statement about any good:
Thank you! I've made this point myself a few times.
Capitalism is individual choice-based rationing. A socialised rationing system is government-based mandatory rationing, and it has all the problems Megan describes above.
I think this is extremely important to understand: right now, Americans get the best health care in the world precisely because we have some ability to rationally allocate quality of care based on price and cost, even with the already-considerable level of socializing in the system. In medical systems where costs are even more socialized, they have the kind of government rationing, price controls, and shortages of medical treatment Americans have never had to deal with: nine-month waits for specialists, six month waits for MRIs, a scarcity of doctors and dentists that makes it impossible to get care at all in some places.
I would bet 90% or more of us are willing to pay extra to avoid these outcomes.
Your in the market for a new tv. Clearly there is a price that is too high to pay and instead you'll pack up your pennies and go home. Now imagine that your in the market to get your broken arm fixed or to have heart bipass surgery. What price is too high for that? None. You'll pay your bottom dollar to get better. Demand for health services does not go down with higher prices. So how on earth does the market mechanism of price discovery work?
73,d&52,
Want or need might be invariant with price (I greatly want a Ferrari, and will still want one just as much even if the price were 10 times what it is), but actual demand is always and everywhere tied to ability to either pay for, or to confiscate, the demanded/needed goods and services. The market mechanism will prices a heart bypass exactly the way it will price a loaf of bread- you get the bypass when you can offer enough money to make doctors/nurses/hospital part with the time, labor, and the goods required for the operation.
Don't get your argument. Cut the price of the Ferrari in half and you'll see a lot more Ferrari owners. Raise the price by 10 and you'll see far fewer. Cut the price of the bypass and you have the same number of people who need it. Raise it by 10 and you have the same number who need it. Not just NEED but can't live without. How do you prevent the price from just going up and up and up until the entirety of one's expense goes to health care? How do you know that this is not way over and above the amount needed to get "doctors/nurses/hospital part with the time, labor"?
How do you think all of life's other necessities are priced?
Assuming there is no alternative procedure. So the argument only applies to procedures/drugs that have no substitute. Angioplasty can be imperfectly substituted for bypass for some patients. Many drugs can be be replaced by generics. So the elasticity of demand is low but not perfectly inelastic. Also, if prices increase we should see an increase in supply. Even with the AMA's control of medical licensing, I doubt supply is entirely fixed. Plus even a monopoly cannot raise prices until "the entirety of one's expense goes to it." It can only raise prices to maximize its profits, which will be short of everything you make.
The best way to determine that is to introduce competition. The best way to do that is to relax overtightened standards. Primary care physicians DON'T NEED to take the in depth organic chemistry course that all prospective med students currently are forced to take. They could easily get by without it or with a much lighter intro to OrgChem course.
@Yancey
Good question but to answer it one needs to know the supply situation.
When it comes to medical care the supply (doc time) is at or below the demand level which means prices still need to go up. At some point enough people will go bankrupt trying to pay (or just die or remain crippled) that demand will go down and we'll get to the max profit level (or maybe we're there already, I don't know). Anyway, that is the free market solution. You may think that is fair, but I don't. I believe that you'll get just as many qualified folks to get off their collective tooshie and do a great job for prices that are below the max profit level. I'm in favor of such price controls so that less people die and less people have to go bankrupt. I guess that makes me a socialist.
@ravenstrike
Good suggestion. Bonus side-effect of more doctors would be that they wouldn't have to work such crazy hours. Though, I do wonder how many more docs you could train before physician quality begins to be compromised.
If it could be guaranteed that one could always purchase health care privately, then there might not be as much opposition to a public plan that rations by fiat as a means to control costs, but here is the rub: in the quest to control costs, supply gets greatly constricted, and those with the means jump the queue by offering the providers more for the service than the government does, or can. Now, it is possible that the story ends here with government raising it's spending to draw in more supply to shorten it's queues; or it can take another approach, such as is seen in the Canadian system- it can outlaw competition for resources the government wishes to purchase itself.
The question to ask is this- how politically stable will the multi-tiered system of care be once everyone has access to some defined level of care? Will progressives continue to push for more and more equal care regardless of means to pay? If answer is yes, then you will eventually end up with the government in total control of health care. It is an economic impossibility for everyone have access to the very best care available without an explicit fiat ration system that includes everyone without exception.
Frankly, market-based is the best kind of "rationing" because YOU the individual get to decide for yourself how to allocate things.
Want to try some new expensive cure? If you have the money, go for it. Want to pass on some expensive voluntary medical test so you can spend a week in Florida instead? Again it's the individual's choice.
What they don't understand is insurance is a risk buisness! They take the risk for an agreed upon price! So if you are a greater risk than others they have the right to deny the risk! If they were to insure pre-existing coverage everyone's cost would go up to take on a higher risk it's common business practice the greater the risk the greater the cost spread out amongst the clients.
If you're a bad driver you're a higher risk than everyone else so therefore you pay higher premiums or don't get insured as simple as that in business. As in tort reform if you lower the cost of lawsuits to insurers the less spread to others for the cost! Basic math people!
There is the issue of taking by the govt without compensation. What if you have built your life around a health insurance company, done the best you could performing honest labor, and suddenly, and without compensation, your business is destroyed, along with your retirement. I guess you are a "vested interest" and had it coming.
This whole prospect would have been a little less scary if Obama didn't take money from automaker bondholders, many of whom thought such bonds were secure investments, and used them in "low risk" pension funds. Then the money was given to the UAW or seized by the govt. The bondholders were threatened with vilification in the press. Where is that in the constitution?
What about the auto dealers who had their multi-million dollar franchises taken without compensation under rules nobody can explain?
Right now one sixth of the economy is frozen, nobody wants to spend any money because nobody knows what the future holds. Who can blame them for keeping cash in reserve? What if MRI machines are deemed extra cost, and are shut down? Why would a hospital or a health plan spend a cent right now they didn't absolutely have to?
This was a horrendous time to introduce this kind of uncertainty into the economy.
Rationing is the prohibition on purchasing something. Something is not rationed if you can make contracts to acquire as many as you can find, something is rationed if you are only allowed to buy a certain amount, and further contracts are illegal.
Keep up the good fight!
WHAT?? You recieved you JD from where? Your post makes no sense and yes contracts i.e. insurance most certainly can ration the risk!
[Progressives] don't want to tell grandma to take morphine instead of getting a pacemaker. It's much nicer if you create a mathematical formula that makes some doctor tell grandma to take morphine instead of getting a pacemaker. Then the doctor can disclaim responsibility too, because after all, no one really has any agency here--we're all just in the grips of an impersonal force.
Libertarians don't want to tell grandma that either. They just tell her that she can't have the pacemaker if she can't pay for it. No agency, no responsbility - just unavoidable market forces. "Too bad, dear, but thatt's the way it is."
If you design a formula to deny granny a pacemaker, knowing that this is the intent of the formula, then you've killed granny just as surely as if you'd ordered the doctor to do it directly. That's the intuition behind the conservative resistance to switching from price rationing to fiat rationing.
This is nonsense. If you design any method of allocating pacemakers, including the market, that has the predictable consequence of denying granny a pacemaker then "you've killed granny just as surely as if you'd ordered the doctor to do it directly."
Using the government's coercive power to decide the price of something, or who ought to get it, is qualitatively different from the same outcome arising out of voluntary actions in the marketplace.
Voluntary actions? WTF? "I guess I'll just drop dead, since I can't afford a pacemaker." Voluntary.
Or maybe you're thinking of the supply side:
"No, you can't have a pacemaker because you don't have any money." This is supposed to be a morally superior system?
Okay. After all the philosophical back and forth, there are four major and solvable problems with health care in the US today. First, out-of-control malpractice law suits, responsible for roughly 20% of the cost of medicine today. Second, misappropriation of the role and function of insurance in society. Three, linking of medical care to employment. Four, politicization of medical care by individual states" legislatures resulting in out-of-control mandates and restrictions. The first of these we eliminate by outlawing malpractice lawsuits in across the board and provide recourse for mistreatment to reside in a panel of experts who determine if there was malpractice. If so, a judge determines the amount of compensation due the patient, and whether the doctor should be delicensed or not. All this paid for through licensing fees for medical practitioners. Three, decouple healthcare from employment by a government tax equaling the value of the insurance premiums now paid by companies said tax immediately rebated to individual employees who then contract with insurance providers in exactly the same manner senators and representative currently do. No insurance provider can deny coverage for any reason and if they do they are fined or refused business licenses. This provision to be paid for by a surcharge on every policy sold by providers and the money pooled and rebated to individual insurance providers for getting stuck with unusual risks where appropriate by an insurance commission. Fourth, eliminate all individual state oversight and mandates for insurance providers with the stroke of a pen, since interstate commerce law allows the federal government to do this. There you have it. Problems solved. These solutions allow for prudent government oversight and most importantly, competition among insurance providers to flourish and come up with innovative plans that appeal to the many segments of the market. KISS.
In Canada, which except for Steven Harper, is not control by Confederates and Randites, they are slapping back a different camel.
From Naked Capitalism (run by a real Capitalist, Yves Smith, and not a faux one like Megan):
"Read Linda McQuaig's article, Profit takes precedence over reform. I quote the following:
Like health care, pensions cry out for public programs. Our public pensions – Old Age Security and Canada Pension Plan – have helped keep seniors out of poverty. But the amounts provided under these programs are low and need to be topped up. Yet less than 40 per cent of Canadians have private pensions to supplement their retirement incomes.
The best way to ensure better pension coverage for all Canadians would be to put more money into our public programs.
Another promising idea, promoted by some provincial governments, involves government setting up multi-employer "super pension funds" that would operate on a non-profit basis.
Jack Mintz doesn't like this idea. In an op-ed piece in the National Post last May, he attacked it as "dangerous."
Just why is it dangerous? Well, it seems it's dangerous to the interests of banks and insurance companies because, as Mintz explained, they would have trouble competing with the non-profit pension funds.
Interestingly, this is the same argument American conservatives use against Obama's public health-care plan – that private insurers would have trouble competing with it.
Which raises the question: whose interests come first? If we have to choose between leaving elderly Canadians at risk of slipping into poverty or making it harder for banks and insurance companies to compete in the pension market, is that really a tough choice – except perhaps for Jack Mintz, Stephen Harper and others on the Canadian right?"
Again, this is an argument that I don't know if there exists common ground about basic moral assumptions. I tend toward John Rawls and the Sermon on the Mount. I believe we live in a Community and that as individuals, most of what we have we owe to the community and our good luck (or sometimes bad luck such as getting lung cancer at 33 (like a non-smoking friend), a genetic condition that produces tumors in the stomach (like my brother), or brain cancer (as what killed my cousin, born the same year as I, when she was 7 years old). In all these cases, these folks did not have much chance to be rich on their own effors, unless you assume that they lacked the good judgement, moral standing, and smarts to insure they were born rich, or at least upper middle class (Megan, you were raised on the upper West side, right?).
Megan and Hayekians in general believe the individual is all and that anything taken from the individual to give to another is a form of robbery, a theft, such as Richard Epstein of the University of Chicago would describe it. If you agree with that fine, but be willing to state that since charity is also wrong (as John Galt so aptly explained in is famous speech) people will be allowed to die if they can't pay for treatment out of their own pocket and that if you buy health insurance, then it is caveat emptor regarding what the health insurance puffs about what it is selling and what they actually give you.
It is absolutely incorrect to call free market trade "rationing" as the term is used in common language. In a free market goods are in NO sense rationed. An individual who produces goods is not "rationing" them, and when he trades his goods for those produced by others he is not "rationing" them, and when he consumes his goods he is not "rationing" them.
To confuse the economic term with the common term (a political term), which means "controlled distribution of resources" is to commit the fallacy of equivocation.
once again the rep-cons have muddied the entire issue. namely how to keep down health care cost. i have pretty much taken for granted they dont give a hoot about the 45 million uninsured. but with health care skyrocketing, one would think they would feel some obligation to find a "market based" solution to break the collusion of the health industry. and dont say govt is the fault when the lobbyists employed by big business are virtually writing up some of the proposals, especially that laughable plan the rep cons came up with last week. the opposition has chosen to be corporate concubines and throw rocks at the reformers.
if health reform fails and nothing is done, the cost to the consumer and the govt. will continue to skyrocket until the whole thing collapses in about 8 years.
perhaps i could follow megan mcardle and her posse if she could point to a free market based health care system in another country that is not bankrupting its citizens like this one is. (60% of US bankruptcies are due in part to healthcare bills.)
By your logic charging someone more for healthcare than they can afford is killing them in exactly the same as telling some edge cases that they can't have a pacemaker.
All I know is that single payer healthcare provides similar quality healthcare, in some ways better, in some ways worse, than what we currently have in the united states only with wider coverage, and lower costs. Maybe that means some grannies (it's important that it's not a spinster because it is a naked emotional appeal) will not get the optimal healthcare, but other grannies who wouldn't will. By the way this is actually how we do things for actual grannies. And we do by all right by them.
"kill granny" seems like mostly red hearing...in the free market utopia, if granny cannot afford the pacemaker granny dies...if she has the money, she will get her nice new pacemaker and live...in obama-care, gov bureaucrats will give granny a thumbs up or thumbs down and in the free market utopia, if granny cannot afford the pacemaker granny dies...if she has the money, she will get her nice new pacemaker and live
"kill granny" seems like mostly red hearing...in the free market utopia, if granny cannot afford the pacemaker granny dies...if she has the money, she will get her nice new pacemaker and live...in obama-care, gov bureaucrats will give granny a thumbs up or thumbs down then if granny cannot afford the pacemaker granny dies...if she has the money, she will get her nice new pacemaker and live
very poor typing skills
sorry
Actually no. In the free market (which is anti-utopian, btw -- it's driven by greed and self-interest), insurance companies compete. In socialism, the government dictates.
Obama himself questioned whether his grandmother should have gotten a hip replacement shortly before she died.
well, actually yes - you have not disagreed with any of the rather small points (except for the utopian / anti-utopian nomenclature - thanks for not going after hearing / herring!)
in an unregulated free market for insurance, no ins. company going to insure granny - way too expensive - she will have the money or die (maybe there could be a big government plan to provide her with insurance - could be called medicare - if not still reverts to have the money or die)
see comment above about obama-care
McArdle needs to deepen her propagandistic skills.
The dichotomy of "impersonal government" versus "personal doctor in free market" would no longer trick a six year old. We are talking about the democratic, nonprofit form of a large centrally planned bureaucracy (government) versus the oligarchical, profit-driven form of a large centrally planned bureaucracy (corporation).
Is the latter more humane, responsible, or even rational? It is astonishing in the face of our present financial crisis (a crisis of "pricing" at the highest level) that McArdle can retain a superstitious faith in price theory as the font of all wisdom.
As for the moral arguments. Please! Let us consider not "grandma" but "grandmas" in the plural and on the global scale. At this scale (which is, after all, the customary Christian and Kantian moral scale), most libertarians of McArdle's ilk are happy to say: "Yes, we already ration grandmothers, we just let the market do it."
The problem with market rationing is that it's inconsistent with who we are. Market rationing denies all sorts of preventative care to poor people, but when those same people show up at the emergency room with major health problems twenty years later, we refuse to shove those people back out on the street. The market never could find a way to profitably provide health care to fixed-income retirees, but we found it unconscionable to let our parents suffer, so we created Medicare. That's just who we are. We will always pick up the slack when the health care market fails.
It seems to me that the market is really good at serving young, healthy consumers, but it's terrible at everything else. I don't think it's so strange to look to a public option when the market has failed. I believe I've heard Obama make reference on numerous occasions to a hybrid plan, where the market can continue to work for the median consumers, but the public option serves the rest. This won't satisfy Conservatives, who will recognize rightly that the costs will still have to be born by those who can bear them, but it's a way of bringing in through the front door what we currently pay extra to bring in the back door.
Megan,
I disagree with your article completely. Insurance companies do not ration care. They enter into a contract with you to pay for certain services up to a certain amount in exchange for your premiums. You as the consumer ration your own care, to the extent it is rationed, by agreeing to these limitations. Further, just because insurance doesn't cover something does not mean it is rationed. Rather you have the choice to pay out of pocket, agree to a payment schedule with a provider or seek out other ways to pay for your health care. The only rationing is done by the individual. That is consumer choice.
HOWEVER, in England for instance, if the govt. tells you NO you are not allowed to purchase the service on your own. If you do, you lose all rights to healthcare. That, my dear, is rationing. And that is what Obama and his ilk are after. Control, not healthcare.