Squaring the Culture




"...and I will make justice the plumb line, and righteousness the level;
then hail will sweep away the refuge of lies,
and the waters will overflow the secret place."
Isaiah 28:17

07/16/2009 (12:14 pm)

Distrust of Private Medicine

Noted ethicist Peter Singer, who is widely and famously considered an advocate for hell’s most ghoulish positions, writes today in the New York Times regarding why rationing health care is necessary. I will address him later today, or tomorrow, when I’ve had a chance to digest the article; consider this paragraph my preliminary shot at poisoning the well. :)

In the meantime, though, it’s crucial to address the far-too-common fallacious thinking of the masses regarding universal health care, before we all get saddled with it.

I came across the following typical diatribe on an Amazon.com book review thread. I’m going to post it anonymously and without the link (after minor grammar and spelling corrections), in order to protect the person who wrote it. I don’t think anybody sane will consider this blog a “for-profit” enterprise, so I’m hoping that including it is permitted under “fair use” law. I will grant that the argument offered here is not the best possible argument for national health care, just a very, very common one; by demolishing it, I am not refuting the best my opponents have to offer, and thus not settling the issue. My goal here is simply to equip the average person with the ammunition to handle the ordinary nonsense they’re likely to encounter.

OK, here goes:

National health care is in the best interest of the country. The independent companies are only in business for themselves, for they are businesses. They exist solely for profit, not to help their customers. I don’t know that the govt could do a better job, but considering how awful private companies are, I can’t imagine it would be worse. After all, are we not entitled as Americans to LIFE, liberty, and the pursuit of happiness? Not wanting to do something different and hopefully better than our current health care system is crazy, delusional, selfish, greedy, or some combination of the four. At least if it was government-operated then it would be answerable to the people instead of to boards of investors. While this may seem naive, if regular Americans got more involved it would definitely be better.

Note, first of all, the central role played by a sense of entitlement, appearing in that bizarre misuse of the phrase, “life, liberty, and the pursuit of happiness.” When first penned, “life, liberty, and the pursuit of happiness” referred to a right, endowed by God to every individual, to pursue on their own, without government interference, the best possible life. In this fellow’s thinking, though, it confers onto government the duty to provide for every individual’s health. Thus are Thomas Jefferson’s fine words turned on their head, and his thoughts discarded entirely. At his core, then, the fellow who wrote that diatribe wants somebody with the power of Mom to take care of him.

Note, second, that he asserts that what he’s been experiencing all along is free-market medicine. It’s not. There has been nothing remotely resembling free market medicine in this country since the 1970s at least; medicine and medical insurance are two of the most tightly regulated enterprises in the nation. Insurers face limits and requirements on whom they insure, how much they can pay for certain procedures, and which procedures they must cover. Employers face limits and requirements on what sorts of insurance they may offer as benefits. Medical practitioners face limits and requirements about how much they may charge for particular procedures, and about which procedures are necessary and which are superfluous. Patients’ provider choices are frequently limited by networks beyond their control. Even beyond all that, the elephant in the room is Medicare/Medicaid, paying for roughly 50% of all medicine practiced in the US, establishing hard-and-fast (and often unrealistically low) prices on particular procedures, and forcing doctors and hospitals to make up their profits on non-government-subsidized patients. Ultimately, we’re just comparing a piecemeal government-run health care system with a planned one.

Now, with what reasons does our anonymous man-in-the-Internet-superhighway mask his plea to be cared for? His main excuse is his distrust of private enterprise. And it is this combination — an infantile need for someone, anyone, to rescue him from the difficulties of ordinary life, coupled with a basic distrust of ordinary business — that permits President Obama to able to get away with nationalizing everything.

His distrust is largely irrational. This fellow supposes that economic self-interest is something morally evil, even though it’s the basis of nearly every decision each of us make on a daily basis. Why does he go to work every day, if not for “profit?” Does that make his own labor untrustworthy? Of course, it does not; but he apparently thinks himself a saint where every other human being is a sinner.

Reread that last sentence, because it’s crucial to his argument; nationalizers always assume that “big corporations” are staffed by people who are simply not as decent as they are — but that government-managed agencies are staffed by decent folks, like himself. Why does this fellow imagine businesses exist “solely” for profit? Aren’t they human beings like he is? Don’t some folks do their jobs because they’re actually good at what they do, and enjoy doing it? Don’t they take pride in having done well? Don’t some choose their profession on the basis of what they’re best suited to do, or what they love? Don’t any of them ever consider the impact of the work they do? Don’t they care at all for the human being they’re serving, just because they’re a fellow human? The fellow who wrote that argument does all those things as much as he can; why does he assume others don’t? Where will this guy find a corporation with the mission statement, “To get filthy rich, and screw everybody while doing it?” Such organizations exist only in grade-C movies, and in the heads of those duped by socialists.

And where does the notion come from, that a government bureaucracy employs people who do care about their customers? Are they a different sort of human being who go to work for government, than those who go to work for private enterprise? Or are they the same people?

No, the same human beings run both private and public systems. However, those systems do not produce the same results, because the incentives are different. But the fellow asserts, without basis, that the incentives of government deserve a chance, since the incentives of business are “solely for profit.”

This, too, is irrational. Even if corporations did exist “solely” for profit and were staffed by slavering demons rather than ordinary human beings, don’t they profit best if they serve best? Businesses in general do not make profit if they do not help their customers; they go out of business. If the author of that opinion visited a restaurant and got treated like dirt, he would never return to that restaurant; he’d go instead to one where he’s treated acceptably. Same with everybody else. Businesses pay for ignoring their customers’ needs, usually with their existence. So do medical care providers — when they’re permitted to run their own businesses (which is generally not the case in America.)

By contrast to that, he asserts we should give government a chance, as though we have no prior experience with government agencies from which to draw expectations. Who is he kidding? We have lots of experience with government-run entities. Are bureaucracies here in America — or anywhere, for that matter — known for honest, well-meaning labor entirely for the public good? or is it the case, instead, that “bureaucracy” is a synonym for “callous incompetence?” The question answers itself. And if that’s so, why, tell me, why is this fellow supposing that a bureaucracy would do a better job than a business where the proprietor actually benefits from having served him well?

Notice that I said that his distrust of business is “largely” irrational. Distrust of business is not completely irrational; consumers have self-interest, too, and that’s why we protect ourselves from charlatans and frauds. Our distrust is part of what makes a free economy work. Distrust of business is only irrational when it produces a conclusion that private business cannot produce anything of value — while living in the middle of a system that has produced more wealth and better services than the world considered possible. That’s irrational; and it’s irrational to replace the current system, however dysfunctional it has become thanks to government tinkering, with a system that has uniformly produced misery wherever and whenever it has been tried.

The argument at the top of this column is unfortunately common. A huge percentage of our population, like that fellow, has been sold a lie about private business — which is why America today is pursuing an irrational course toward socialism. It doesn’t occur to them that what they’re going to get in the place of economically self-interested profit-makers is politically self-interested bureaucrats, and that those are always far worse.

I’ll finish by re-asserting this video from 1979 which I first posted back in March, in which Milton Friedman makes mincemeat of that incredibly coiffed loon, Phil Donahue, when asked if he has any qualms at all over advocating a system run by greeeeeeeeeeed (cue ghoulish laughter):

« « And While We're Talking Palin… | Main | Barbara Boxer, Racist? » »

17 Comments »

July 16, 2009 @ 2:11 pm #

Excuse me, but “private medicine” is NOT the same thing as “private/for-profit insurance”. It’s an admitted semantic point, but the fact is that semantics are widely-used by wordsmiths to shape the views of readers and listeners.

It’s therfore inacurrate, and even dishon3est, to claim that the above-quoted writer distrusts “private medicine”. What he distructs are insurance companies which focus on investors and large personal salaries and/or bonuses, rather than on providing the services they claim to provide. This distrust is neither “infantile” nor “irrational”; it’s rooted in the very real fact that people have been, and are, denied the coverage they were told they’d be given, and for which they paid, often for spurious reasons, and the only way to obtain the paid-for service has all too often been through court proceedings. Although it’s valid to note that government employees are not necessarily any more “caring” than is anyone else, it remains true that the primary focus of a publicly-held company is maximizing profits, *not* maximizing service.

What most peiople recognize, albeit it subconsciously, is that health care is *already* being rationed, not on the basis of affordability, but on the basis of how much additional profit can be squeezed out of the company for upper-level executives and for investors.

And lest you snidely claim that I am “against profit”, let me clearly state that I am not against profit – what I’m against is giving profit for a very few precedence over what a company claims it will give in exchange for the money it received from clients/policyholders. I was going to say “the smallest basics of human decency”, but that phrase would probabvly have no meaning for you, so I will instead cite Breach of Contract, in that what companies communicate to potential clients must be syncronized – the verbal parts of the contract, i.e. what people are told they will receive, must be the same as what’s obscured in the highly-legalized (hence incomprehensible to the average person) small print. If people are told things that do not synchronize with what is written, then breach of contract has occurred.

If people are in favor of universal/government-paid health care, it si because they assume (no doubt erroneously, given the chatracter of all-too-many people who go into governemnt) that such agregeous breaches will be less likely.

July 16, 2009 @ 2:19 pm #

BTW apologies for my awful typing, the arthritis in my fingers has recently been flaring up quite badly.

July 16, 2009 @ 4:04 pm #

k_michael,

You make a lot of assumptions about me that are pretty negative. I hope you can cool down for my reply, ’cause I’m not who you think I am.

1) The comment I quoted and rebutted was not specific about what acts or practices it was that he distrusted, but he explained very clearly that it was because they worked “solely for profit.” So it is ACCURATE of me to question his distrust of the profit motive generally. It is, by the same token, INACCURATE of you to assert that that’s not what he meant; you’re asserting things that are not in the text, and I’m sticking to things that are. You have no way of knowing whether he meant dishonest insurers or not.

2) It is not even clear from the comment that the author is complaining about insurers at all. By “companies,” I assumed he was talking about all for-profit health enterprises, and that would include doctors’ groups, health maintenance organizations, private medical practices, and hospitals as well as insurers.

3) It was not the distrust of companies that I called “infantile”; it was the assertion that the government owes us health care because we’re “entitled to LIFE, liberty, and the pursuit of happiness.” I maintain that the entitlement mentality is infantile, and see no reason to back down from it. I called the general distrust of profit motive “irrational;” I called sufficient distrust of businesses to catch their dishonesties “sensible,” and “an important part of the system.”

4) I’m sure there exist, in fact, instances of insurance companies failing to provide coverage that is spelled out in their policies. There are laws against such things, insurance commissioners tasked with preventing and addressing them, courts in which to challenge them, consumer advocates who will defend you for free in your lawsuit, and so forth. National health care is by far not the only way to address the problem of dishonest insurers, and in fact is likely the WORST POSSIBLE solution to that problem, as the government will have precisely the same incentives as the cheap-ass health insurer, but there will be no recourse if the government stiffs the consumer. In actual fact, this is one of the complaints we hear repeatedly from national health systems in Britain and Canada.

4) Dishonest dealing by insurers is not the main problem being addressed in public by most advocates of national health care. More often we’re hearing about people lacking insurance altogether, and about out-of-control health care costs.

5) This article was not about health rationing; the next one will be. However, so long as the consumer is willing to pay for whatever service it is he or she wants, there is no rationing, and the insurer lacks the power to implement such a program. That will not be the case when the government takes over the system.

6) The language of medical insurance contracts is established by law in most states, and cannot be varied by the insurer. If you have a problem with their comprehensibility, call your state legislator or your state insurance commissioner. Or better still, get an insurance agent that you can trust, and let him explain it. There are lots of honest ones, and the contract is really not that arcane.

7) I dispute this: “it remains true that the primary focus of a publicly-held company is maximizing profits, *not* maximizing service.” This is simply false. The primary focus of any sensible health care provider is to maintain profitability while providing a level of care that meets the consumer’s health needs. The primary focus of any sensible health insurer is to maintain the viability of the insurance pool while providing prompt payment for covered services. There would be no conflict between the goals of service and profitability if health care providers and health insurers were permitted to set their own prices in a fair market, but in fact there are lots of government intrusions into pricing, not the least of which being that the insurer is not permitted to price high-risk participants differently from low-risk participants, which is just, plain nuts. Heck, you want an incentive for obese people to lose weight? Let health insurers charge a differential for obesity. Jenny Craig would double its sales overnight — and everybody else’s health costs would go down, just that quickly.

7) The basics of human decency have a great deal of meaning for me, and I don’t see your basis for assuming otherwise. That was an unprovoked attack. You should apologize.

July 16, 2009 @ 6:40 pm #

A few nagging questions about health care and insurance.

1. I question the advisability of any health insurance at all because it allows the doctors and hospitals to charge far more then they could otherwise charge if people had to pay their bill out of their own pockets. A few years ago I had a miner heart attack, I was in the hospital for 3 days and the total bill was over $30,000.00. Even by the economic realities of this day and age, $10,000 a day is a bit much.
2. As far as I can see the insurance company is making a bet with you. Their betting they can get more money out of you then they are going to have to pay out. The only people they really want to insure are the people most likely not to need it. National health care could mitigate this by forcing everyone, young and old, healthy and not so healthy, to pay into the system. On second thought it would not even have to be national health care, just national forced coverage, the same idea as everyone who rides a bike having to wear a helmet, or everyone in a car having to wear a seatbelt.
3. Who is willing to pay for health care is a big problem. The young are reluctant to afford a costly health care plan that they don’t think they need. The old are willing to pay for it, but the health insurance company’s don’t really want to insure them. So the big question is how do we get the young to pay for the old and how do we convince the insurance companies that taking on bad risks is a good idea.
4. My wife and I have had insurance ever since she started working for the state, and we have had continuous coverage every since then, thankfully through all the years are children were growing up. What about all those hard working Americans, both mothers and fathers, who are working without any health care. I remember when my son broke his arm and we took him into the emergence room at our local hospital, I think the bill was around $800.00. How do people working for low wages do it?

As Scrooge said humbug, aren’t their prisons and poor houses for these people. By God if they are going to have kids they should pay for them.

I don’t want Obama health care, but I think we will be judged by how we treat our poor and our old, and humbug is probably not the right response.

July 17, 2009 @ 7:41 am #

Dale,
Good points on the costs, but my problem has always been why are costs so high?

I think it is because of a huge swath of varied reasons, which may be simple or complex when taken individually. Frivolous (or non frivolous lawsuits against doctors and hospitals, which force them to no only have to raise costs in order to pay for them, but forces them to carry huge insurance policies themselves to offset these costs. Also, the very high cost of all medical equipment. Those of us in the sciences know how insane the cost is for any materials or equipment when it is slated for the medical or science fields. Another may be the long hours all personnel are forced to work which means you have to make the job more attractive by increasing pay and benefits.

There are plenty more that we could go over. So what is the solution?

The thing is whether some of us like it or not we are still in a market system, which means the laws of supply and demand still apply. Any of the government plans that I have heard bandied about all increase demand while making vague promises about trying to increase supply. The point here is simple, any government plan will increase demand for medical care while leaving supply the same. Therefore costs will go up. Sure as gravity.

At some level in this demand is fixed though. Everyone needs healthcare at one point or the other. So as long as your population is stable, your demand for it is fixed (although aging populations mean that demand can go up while population numbers remain the same.) So if you have one fixed point on the supply demand curve, demand, how do you drive prices down? Supply.

You could offer incentives to new insurance companies. As the number of companies increase, the companies will be forced to compete for customers by offering lower rates, making it more affordable for more people. You may even think about offering a federal loan or some sort of subsidy for health care employees. You make these sweetheart deals on the premise that if they do not achieve good grades during training, they have to pay back the loans or subsides in full. This way you do not compromise the quality of care they give. You can also try to encourage new medical schools in order to drive down the costs of the training. The same is true for the medical equipment and supply industry.

I do agree with you Dale, that a society can be judged by how it treats the less fortunate, but I completely disagree that the government should be in charge of it. Perhaps making charitable donations easier and offering the tax exemptions that non-profits and Churches enjoy should be the limit of Governments involvement.

July 17, 2009 @ 11:31 am #

Horatius,
A quick story to make a point. My brother-in- law who has worked as a boat mechanic for all his working life in the great state of Idaho, you know that’s the Right To Work state, for low wages and no health insurance, had a stroke a couple of years ago. The reason for the stroke was that he had high blood pressure that he hadn’t taken care of because he didn’t think he could afford it. As a consequence he accumulated an astronomical bill that he will never get paid off. I think he’s paying $100.00/month, and will for the rest of his life.

My first point is this, the demand that you are talking about was still there. My brother-in-law was still treated. He was not turned away.

My second point is this, if he had had health insurance he would never have had the stroke it the first place. A lot of money was spent that he will never be able to pay back.

I would also like to comment on something Phil said,
“Heck, you want an incentive for obese people to lose weight? Let health insurers charge a differential for obesity.”
And I say hack if a person is born with a predisposition for diabetes lets charge then more too. In fact let’s just price everyone out of the market who, for one reason or another, don’t measure up. Just think of all the wonderful things DNA tests could be used for.

I said before that I don’t want Obama care because I don’t think there’s any way in hell he would do it right. However, just maybe, health insurance is one of those things only the Government really can do right, because that’s the only way to insure that everyone is paying into the system and the insurance company’s aren’t cherry picking who get covered.

July 17, 2009 @ 11:57 am #

Dale,
As I said demand for healthcare is fixed at some point. What I am saying is that all the programs being bandied around will increase demand to this higher fixed ceiling, while doing nothing to address supply (or rather will decrease supply, to insurance at least in the near term)- which means cost will go up, and at the same time they are telling us that costs will go down. That does not seem logical to me.

Mandating that everyone get coverage as you mentioned will increase the supply for medical insurers, but with a government plan there is no competition to insure that the costs to the consumer stays low(er).

If the government stayed out of the insurance biz, but just mandated that everyone must have coverage (like you do when you get your licence plates) then it would at least mean that the insurers would have to compete for a fixed market. The government plan would force all of the other companies off the field.

July 17, 2009 @ 11:58 am #

Dale:

“However, just maybe, health insurance is one of those things only the Government really can do right, because that’s the only way to insure that everyone is paying into the system and the insurance company’s aren’t cherry picking who get covered.”

The way insurance and medical care are set up right now, you are likely right.

Careful, though…you’re thinking dangerously progressively : )

July 17, 2009 @ 12:08 pm #

Darkhorse,

Excuse me but calling me progressive is really hitting below the belt. After all I don’t call you names. Have a good one. Dale…

July 17, 2009 @ 5:01 pm #

Phil,

The thing about the health insurance business that your customer analysis overlooks is that our status as a desirable customer – someone who needs to be made happy – is inversely related to our need for medical services. The more medical services we require, or are likely to require, the less desirable a customer we are.

Put another way, the profitability of insuring us is inversely related to our need for medical services.

That is the core problem with for profit health insurance. In an ordinary vendor customer relationship, both parties interests are aligned. In the for profit health insurance business, the relationship becomes adversarial the more we need what the insurance company is selling. We’re purchasing protection against financial loss. But as soon as we need that protection, we become a less profitable customer.

That’s why the insurance industry is so heavily regulated. But I’m not convinced that any regulation short of a public option can overcome the basic problem with for profit health insurance.

Joe

July 18, 2009 @ 4:36 pm #

I had to laugh at your opening statement, “Noted ethicist Peter Singer…” I think I would have said something more like “Infamous ethicist…”

In the original quote, there appeared the line, “They exist solely for profit, not to help their customers.” This betrays a fundamental misunderstanding of how all business works. No business, whether medical or otherwise, can long exist without making the goal of serving their customers a priority. Businesses (with the possible exception of lawyers) do not rob their customers, but rather exist to provide them a service that they can almost always get somewhere else. Thus to stay in business, providing the service the customer wants at a price he is satisfied to pay is essential.

As to the idea that the government can somehow do things better, this is the ultimate fallacy. The government does nothing at all well, and certainly should never be involved where private enterprise can do the job. The postal system is the classical example. There was a time when we just had the US Mail and there were no package delivery services. The US Mail deteriorated and became more and more expensive, and the package services appeared. Today we have FedEx, UPS, DHS, and a host of others, and the US Mail would disappear if it were not for government subsidies while these others all compete quite nicely for the business and provide a much better service in most cases.

The need to make a profit is a key element there. In any federal agency, the Post Office or any other, there are thousands of people doing nothing at all (I know, I used to work in a Civil Service job). There will be a few people doing the actual work function, and countless people doing nothing at all but drawing large salaries and getting in the way. Ronald Reagan said something about there being only two things that last forever: death and a federal program. There is no accountability at all, the money just keeps coming in, always a few percent more than last year. There is no way on earth that a system like this can claim to be efficient, or to do a good job in any sense whatsoever. All the lies by the politicians make no difference at all; it cannot possibly work.

July 18, 2009 @ 4:38 pm #

I had to laugh at your opening statement, “Noted ethicist Peter Singer…” I think I would have said something more like “Infamous ethicist…”

In the original quote, there appeared the line, “They exist solely for profit, not to help their customers.” This betrays a fundamental misunderstanding of how all business works. No business, whether medical or otherwise, can long exist without making the goal of serving their customers a priority. Businesses (with the possible exception of lawyers) do not rob their customers, but rather exist to provide them a service that they can almost always get somewhere else. Thus to stay in business, providing the service the customer wants at a price he is satisfied to pay is essential.

As to the idea that the government can somehow do things better, this is the ultimate fallacy. The government does nothing at all well, and certainly should never be involved where private enterprise can do the job. The postal system is the classical example. There was a time when we just had the US Mail and there were no package delivery services. The US Mail deteriorated and became more and more expensive, and the package services appeared. Today we have FedEx, UPS, DHS, and a host of others, and the US Mail would disappear if it were not for government subsidies while these others all compete quite nicely for the business and provide a much better service in most cases.

The lack of need to make a profit is a key element there. In any federal agency, the Post Office or any other, there are thousands of people doing nothing at all (I know, I used to work in a Civil Service job). There will be a few people doing the actual work function, and countless people doing nothing at all but drawing large salaries and getting in the way. Ronald Reagan said something about there being only two things that last forever: death and a federal program. There is no accountability at all, the money just keeps coming in, always a few percent more than last year. There is no way on earth that a system like this can claim to be efficient, or to do a good job in any sense whatsoever. All the lies by the politicians make no difference at all; it cannot possibly work.

July 19, 2009 @ 2:29 pm #

Do we as a people choose to live in a civilized society, or where raw capitalism rains. Unless we are willing to let people lie in the streets and die, we need to have some organized system to take care of people whether they can pay for it or not. We are doing that now; we are just not doing it very efficiently. Maybe you’re right Dr. D, but then let’s have a few suggestions about something you think would work. When it comes to health care all the Republicans have seemed to be able to come up with so far are watered down versions of things they said won’t work.

July 20, 2009 @ 11:38 am #

Dale -

The choice between “civilization” and “capitalism,” like the choice between socialized medicine and “letting people die in the streets,” is a false choice, a rhetorical phrase devised to make one alternative sound like a horror show, and the other alternative, the only alternative and a civilized relief.

In the first place, by and large people do not “die in the streets” in a capitalist society; to the extent that they ever did, they also died in the streets in whatever other societies were around at the time. For example, a lot of denunciations of capitalism point to the awful treatment of children in factories in England during the early years of the Industrial Revolution; and those children were, in fact, treated horribly. The only thing is, children were pretty routinely treated just as horribly in other settings in those days, they just weren’t seen because they were in private businesses and private homes, and nobody had time to focus on social issues because most people spent most of their time just getting by. It was the technological progress of the Industrial Revolution that made leisure time possible, with which decent folks made themselves aware of the plight of children and established proper rules for their treatment.

Positing a government program as the solution to “people dying in the streets” logically requires that the government be staffed by people who are more moral than the population at large. Why do I say this? Because it claims that the government truly cares about those people who are dying, but the people outside the government do not. This is, naturally, the unspoken assumption of Progressivism on all subjects: the Progressives are the Moral Ones, everybody else is either too greedy or too stupid to do as the Progressives want them to do. I think you already know how likely this proposition really is — that the Progressives are truly more moral than anybody else, or that the government actually cares more about the poor than the citizenry. In actual point of fact, a government is never going to be more moral than the population from which it staffs itself — so a government solution is never the answer to a problem that’s actually caused by the unconcern of the citizenry.

What actually happens between capitalism and socialism is this: capitalism produces productivity and prosperity, but also inequality. Some people are just more productive than others, so some prosper more than others. A lot of people, particularly those with less prosperity than others, see this inequality as immoral, so they launch moral campaigns to correct the inequalities (full of false choices like “capitalism or civilization”). When the government takes over, though, all of the incentives that created the productivity and prosperity in the capitalist system vanish; the result is that the entire system produces for everybody the level of service that was being enjoyed by the POOREST among the nation under capitalism. This led to Winston Churchill’s characteristically succinct description: “The vice of capitalism is that everyone has an unequal share of the wealth. The virtue of socialism is that everyone has an equal share of the misery.”

The same has happened in practice everywhere socialized medicine has been implemented (and also, by the way, occurred when socialized education replaced free market education in America.) Under capitalism, everybody has access except the poorest of the poor, because there’s plenty. Under our current system (which is far, far from a capitalist system), even the poorest have some access, but a lot of people lack proper care because interference from the government suppresses prosperity and drives costs up, causing shortages. Under a completely socialist system, we will all have the same access the poor have now, but the shortages will be much, much worse, and the costs much, much higher.

History is very clear: the only way for a people to escape grinding poverty is through self-interest expressing itself in a free market. This is just as true in medicine as it is in every other economic activity.

July 20, 2009 @ 5:52 pm #

Phil, I can follow your arguments and I know your right; I just don’t like all the places it takes me. I’m not sure what to say. Can we not admit that yes there is inequality, but we as a society choose to place further limits on it? I said further because we all ready do put some limits on it. Is there no way for us to provide health care more efficiently for the poor and destitute without violating some economic principle; if for no other reason than it might relieve the stress on our emergence rooms across the country and save us a ton of money on medical procedures that could have been avoided if treated in timely manner. I don’t know the answer, I’m not even sure I know the right questions. I’m not asking for the laws of economics to be repealed I’m asking, how can we use these laws, to make an even better America.

July 22, 2009 @ 12:35 pm #

Dale wrote:

Can we not admit that yes there is inequality, but we as a society choose to place further limits on it? I said further because we all ready do put some limits on it. Is there no way for us to provide health care more efficiently for the poor and destitute without violating some economic principle

Believe me, I sympathize.

I’m thinking about writing a defense of the out-of-favor concept of “the undeserving poor.” The alternative being offered to the current system is not to build a system that excludes nobody, but to build a system that excludes people on the basis of bureaucratically-applied, politically-influenced criteria rather than economic criteria. The same number of people get excluded, only it’s not poor people, it’s non-party-members and those lacking political clout. That’s what happens in a government-run health system, especially the one Obama seems to be building; he provides special status to union members, which, if I’m thinking this through properly, will eventually lead to what they had in the Soviet Union — a system that treated party members better than the rest. In what way is that an improvement?

The virtue of a completely private system (in a nation governed by the rule of law) is that everybody has more or less an equal shot at obtaining the best, simply by applying themselves. And by a similar token, even the poorest have a chance at obtaining adequate care, by virtue of the generosity of the citizens in a prosperous system.

I’ve noticed that the pattern of liberal advocacy for increasing government power always goes like this; “A small percentage of the population is doing without the best; therefore we need a government-run system for 100% of the population.” One wonders why a government-run system for that small, unserved percentage of the population would not suffice; and then, we notice that there already exists such a government-run system for the poor, and it’s a total flop (think Medicaid). So, why would any sane individual think a total government system will improve things? And sure enough, when the government takes over, everybody gets the level of service that the poor used to get. This is what happened to the education system, too, advanced under identical rhetoric 170 years ago. It’s how statists gain power.

We can do better than we’re doing, and ought to — but the correct path is for the government to intervene less, not to intervene more.

July 23, 2009 @ 10:26 am #

Joe H wrote:

The thing about the health insurance business that your customer analysis overlooks is that our status as a desirable customer – someone who needs to be made happy – is inversely related to our need for medical services. The more medical services we require, or are likely to require, the less desirable a customer we are.

This is only partially true, and not true at all in the way that Joe uses it. Invariably, if an insurance company gains the reputation for stiffing it’s high-risk customers, its business is harmed. So long as there are valid consumer choices and a fair disbursement of information in the culture, businesses are better served by serving customers well than by stiffing them.

Furthermore, Joe’s claim “That’s why insurance is regulated” is dead wrong; in fact, without regulation, the reverse incentive he mentions would not exist at all. I mentioned this in my response to Dale: the reason high-cost customers are such a problem for for-profit insurers is that insurance regulations do not permit them to charge differential rates based on the health of the consumer. If they were so permitted, it would not be the case that higher-cost customers hurt their profitability, because the price of the insurance would reflect actual cost expectations. The risk to profitability for low- and high-cost customers would be roughly the same.

Third, what Joe calls a problem is never a problem for what are known as MUTUAL insurance companies (think Mutual of Omaha, which is the largest of these.) In a mutual insurance company, the insured are the owners of the company. A mutual insurance company is only “for-profit” in the most highly technical sense of the term; it’s aim is simply to maintain an ongoing insurance pool while serving the needs of the members. So long as its pricing reflects accurately the cost expectations of its member population (which is why actuaries earn the big bucks), the presence of high-cost members does not create any disincentive to service.

And finally, what’s missing from Joe’s analysis is what’s present in mine: the goal of for-profit enterprise is NEVER, EVER “solely profit;” that’s nothing but defamation. The goal of for-profit enterprise is profit while serving the needs of its customers. Service is invariably part of the purpose; without customers needing service, there is no business.

RSS feed for comments on this post. TrackBack URI

Leave a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>