What would a free market in health care look like? [Archive]

View Full Version : What would a free market in health care look like?

emacknight

03-28-2010, 11:37 AM

I was re-reading a recent thread of mine and noticed this comment:

Free market? Is the government more or less involved in the health care industry today than it was in your grandfather's early days?

More.

We don't have a free market in health care in this country. That is not to say that we should, but the idea that the free market has failed in this area is not founded in reality.

Again, a concept that eludes me. What would the end game be? Assuming "free market" would mean as little regulation as possible, do we know what that would look like?

Are there people on this board that think it would be a desirable goal? I know more than a few have mentioned they want the government out of their health care. What is the logical end point?

As a couple of examples:
1. Doctors have to be licensed, and have graduated from a recognized program.
2. Medical devices have to meet standards set by the FDA.
3. Medications have to be tested to show they do what they claim.

sleeping

03-28-2010, 11:52 AM

Note that the healthcare system is influenced by other factors. So, a free market healthcare system--whatever that would be--could only exist alongside a fully privatized society.

I suppose if we go back to the 19th century system, it would be bereft of health insurance companies. Instead, doctors would just come to your house for a fee if you were wealthy, or you could risk going to a hospital if you were less well-off.

Simplicio

03-28-2010, 12:17 PM

Again, a concept that eludes me. What would the end game be?

The main problem, I think, and the main reason that we don't have a free healthcare market in this country (or in any other industrialized country), is that then healthcare would be rationed by the amount of money the patient can pay. While we're pretty willing to let this be the case for things like ipods and cars and other consumer goods/services, it's pretty clear that the public won't stand for a system that doesn't allow everyone to get a pretty high minimum level of care regardless of ability to pay. I think this is a good thing just on ethical grounds (and to a lesser extent, on less altruistic public health grounds, since having a poor population that can't get treatment for virulant diseases is dangerous even if you can afford healthcare yourself), but we probably pay a price in the efficency of production of health care goods as a price for distributing them equally.

So my answer to your question then, is that a free-market for health care services is impossible. Voters won't allow a system that rations by ability to pay, and such rationing is the essence of a free-market system. You can set up various kludges that make some aspects of the health insurance market superficially resemble a free market, but those tend to be, well, superficial, and its not really clear that they do anything to restore any of the efficiencies lost by abandoning the free-market model in the first place.

Sage Rat

03-28-2010, 02:46 PM

it's pretty clear that the public won't stand for a system that doesn't allow everyone to get a pretty high minimum level of care regardless of ability to pay.
Say that you set up a system where if you file a claim with an insurance company, the insurance company must pay X% of the cost. But, however much the insurance company had to pay, the government would tax by Y%.

Say that X = 60% and Y = 50%.

Bob wants to see his doctor. The doctor will charge $100. Bob knows that he will have to pay $40 if he wants to go so he won't unless he perceives it as being worthwhile.

He goes and files a claim with a health insurer. Bob has never paid this insurance company any money at all, he's just a name in a computer as one of their official clients. The insurance company sends $60 to the doctor, and sends $30 in tax to the government. They're out $90.

Now, the insurance could just say, "We'll cover any bill up to $100 even if you've never paid us any money." They know that someone Bob's age who is on a "free" health plan rarely needs to use more than $100 in doctor's services in a year. If they guarantee that much to non-payers, they come out ahead because they pay $60 instead of $90. The occasional person will need a bit more done, but it's rare enough that overall they're better to offer a minimum that's guaranteed to non-payers than to take the tax penalty.

But at the same time, that minimum is dependent on Bob's willingness to put up his own money. 100% of the bill isn't covered.

On the other hand, X and Y need to be set to a value such that the minimum level of care that Bob is receiving is low enough that enough people can be up-sold to a paying plan to pay for all the non-payers.

No one can complain. The exact minimum money needed to provide for all is being collected, and that amount is based on how many people feel that their illness is dire enough to go out of pocket themselves.

emacknight

03-28-2010, 05:14 PM

Lakai

03-28-2010, 06:11 PM

IdahoMauleMan

03-28-2010, 06:26 PM

I don't get it. If I start a thread that merely suggests that UHC is okay, there are 12-15 conservatives denouncing socialism, insulting the poor, and yammering nostalgically about the good old days of free market capitalism. But I start a couple of threads asking about the basis of conservative principles and I get crickets chirping.

So here is your change, tell us how good health care would be in a free market. Free from the evils of regulation and hassles of government interference.

I started it off with three examples, would you keep those in free market health care?

Of course not.

Maybe you are getting crickets because your OP is obviously so biased, and your perspective on the issue is already so clear, that people have (rightly) judged that you aren't interested in any real discussion or debate.

A free market basically means there aren't any distortions caused by government (backed with legal means of force) on either the supply or demand side of the equation.

That means both consumers and providers of healthcare can meet on their own, in the marketplace, and agree to a voluntary transaction without any outside influence from the government.

'Supply' means doctors, drug and medical device manufacturers, and intermedaries like insurance companies.

'Demand' means people like you and me, along with intermedaries like insurance companies.

And that's about it. It isn't really any more complicated than that.

So for your 3 examples above....I'll bite, since the NCAA games just ended and I have time.

1. Doctors or other healthcare providers are free to get whatever licensing they desire, from whatever accreditation or guild they desire to get it from. But they don't have to. They don't even need to get a medical degree. They can hang out a shingle and start business tomorrow. So could you, if you want to. You can choose to go to whomever you want, and spend your money in whatever way you want. It's up to you.

2. Same with the FDA. If you want to buy only devices and drugs approved by the FDA, fine. If not, that's fine too. But the FDA does not have the authority to restrict anything that is sold on the market.

3. The 3rd point is a little murkier, since fraud (or breach of contract) can be punishable in a court of law.

On the demand side, the government immediately gets out of any all business of distorting demand (and also, supply) via differential tax breaks, subsidies, price-fixing, etc. that it does today.

How's that? Is that what you were looking for?

emacknight

03-28-2010, 06:53 PM

Of course not.

Maybe you are getting crickets because your OP is obviously so biased, and your perspective on the issue is already so clear, that people have (rightly) judged that you aren't interested in any real discussion or debate.

I'm biased for asking proponents of free market health care to elaborate? Are you worried that your ideas will be critiqued and debated?

Of course not. A free market basically means there aren't any distortions caused by government (backed with legal means of force) on either the supply or demand side of the equation.

Do you see any advantages to government involvement on the protection side of things? As a comparison, is there any advantage to the government requiring safety features in cars?

1. Doctors or other healthcare providers are free to get whatever licensing they desire, from whatever accreditation or guild they desire to get it from. But they don't have to. They don't even need to get a medical degree. They can hang out a shingle and start business tomorrow. So could you, if you want to. You can choose to go to whomever you want, and spend your money in whatever way you want. It's up to you.

I am so on board with this idea. I even have my shingle all made up. Emack's House of Cancer Prevention, 100% Guaranteed*

Cash only. Individual results many vary. Guarantee void in the continental US, not available to residents of Hawaii, Alaska, or Peurto Rico. Some conditions apply. Expectancy based on previous users, results not typical. By reading this you agree to all terms and conditions.

IdahoMauleMan

03-28-2010, 07:08 PM

I'm biased for asking proponents of free market health care to elaborate? Are you worried that your ideas will be critiqued and debated?

P1. Do you see any advantages to government involvement on the protection side of things? As a comparison, is there any advantage to the government requiring safety features in cars?

P2. I am so on board with this idea. I even have my shingle all made up. Emack's House of Cancer Prevention, 100% Guaranteed*

Cash only. Individual results many vary. Guarantee void in the continental US, not available to residents of Hawaii, Alaska, or Peurto Rico. Some conditions apply. Expectancy based on previous users, results not typical. By reading this you agree to all terms and conditions.

P1. No, as a matter of fact I do not see any advantage to the government requiring safety features in cars. Your tone suggests that (of course) you do...and that the point is so self-evident that it doesn't require debate.

But for example, I drive a 1979 Mercedes S-class diesel with 350,000 miles on the odometer. I intend to drive it for another 250,000 miles, God willing.

That car could not be manufactured and sold today. It is illegal without certain safety features that are required on modern cars. Yet millions of the 1970's and 1980's Merc diesels are on the road today, provide utility to 100s of millions of people around the world.

I lived in Europe for several years and loved driving the small diesel cars there (primarily the VW TDIs, BMWs and Volvo diesels). Those cars are also illegal to import into the United States for now - but I don't see people dropping dead on the highways in Europe due to their lax safety standards in automobiles.

P2. Go for it. See if anyone bites. That's the beauty of a free market, is it not?

Apparently the idea of making your own choices, and living with the consequences of those choices, is terrifying for you. You clearly prefer to sign over your rights of choice to a benevolent government dictator to tell you what you can and cannot do.

John Mace

03-28-2010, 07:22 PM

Voyager

03-28-2010, 07:57 PM

A truely free market would look pretty much like what we have for car insurance now, minus the mandate that some states have. In a true Libertarian country, anyone not able to afford health care would have to rely on charity. You could get any kind of treatment or drug you want. There would probably be independent labs that took up testing of drugs and information would be available, but not no authority would forbid you from trying any given drug.

In a country like the US, you'd have some regulation and a social safety net for poor people. No special tax treatment for HCI. Hospitals would not be required to treat anyone who showed up at the door, but most probably would anyway.

How could they? We have the example of the Children's Hospital of Oakland being in financial difficulty in part because their clientele is not paying them, because of insurance issues, no doubt. Hospitals offering care to anyone would either need a gigantic endowment or go out of business.

In the OP you are quoted as saying that we can't say the free market has failed because we don't have one. Not a totally free one, sure, but freer than England or Canada. How sensitive is success to the amount of freedom in the market? If a tiny bit of regulation means that a 95% free market fails, and free market principles can't be blamed, I'd contend that free market economics is not very practical in the real world. I'd say that any reasonable solution has a mix of free market and regulation, and, since we do so poorly as compared to less free systems, we are probably too heavy on the market, not too light. But no matter where you place the dividing line, if you think at least some regulation is necessary you can't blame it for the failure of a system.

FYI, OP, I usually don't bother with these types of threads because they quickly devolve into rants about how libertarians are evil and enjoy watching people suffer.
Pretty amusing, considering that in the post above yours IMM is saying that anyone not as clever as he thinks he is can die from unsafe cars or quack remedies, and it is all their fault.

emacknight

03-28-2010, 08:15 PM

But for example, I drive a 1979 Mercedes S-class diesel with 350,000 miles on the odometer. I intend to drive it for another 250,000 miles, God willing.

That car could not be manufactured and sold today. It is illegal without certain safety features that are required on modern cars. Yet millions of the 1970's and 1980's Merc diesels are on the road today, provide utility to 100s of millions of people around the world.

I lived in Europe for several years and loved driving the small diesel cars there (primarily the VW TDIs, BMWs and Volvo diesels). Those cars are also illegal to import into the United States for now - but I don't see people dropping dead on the highways in Europe due to their lax safety standards in automobiles.

It's interesting that you choose to use Europe as your example. I did a lot of driving around India. There, you can literally build your own car. Well, not so much a car, as a platform with wheels and a water pump, that can transport up to 22 people, some livestock, and quite a bit of hay.

Here (http://farm3.static.flickr.com/2338/1955780389_5c24c7c7ab.jpg?v=0) is the luxury version. The kid in the back doesn't usually get something to hold on to.

A moped is also considered a family vehicle. Dad drives, with jr standing in front of him, mom on the back, sitting sideways, holding a baby. Here (http://www.travelpod.com/travel-photo/jacquimwilson/1/1267624691/family-of-five-on-a-scooter-in-hanoi.jpg/tpod.html) is the Vietnamese version. The adults are obviously required to wear helmets, the kids get to choose for themselves if they want the hard kind or the knitted kind.

I also got the feeling they could use what ever they wanted to for fuel. Judging by the smell I think it was used motor oil mixed with tires and goat hair.

The family I was staying with had a metal shop on their land, making metal gates and fences. After a bunch of animals started to die, they realized it was a bad idea to pour toxic chemicals near the stream in their back yard. I think they now pour them closer to the pit where they burn their garbage.

So forgot the old concept of government protecting you from yourself. As we all hurl ourselves down the highway at an unregulated speed, would you feel more or less safe knowing the other drivers have cars with functioning breaks and steering? Would we be better off with more home-made cars on the road? Wouldn't you like some government protection from other Libertarians?

I'm actually unaware of Europe's auto standards, have they changed since the 70s?

P2. Go for it. See if anyone bites. That's the beauty of a free market, is it not?

Apparently the idea of making your own choices, and living with the consequences of those choices, is terrifying for you. You clearly prefer to sign over your rights of choice to a benevolent government dictator to tell you what you can and cannot do.

I'm all for making my own choice, when information is free and available. What terrifies me is the lengths people will go to to prevent information. I have a friend that tried to sell me Melaleuca. Her pitch was that her mom died of cancer, and these products contain all natural ingredients. Right now, "natural products" do not need FDA approval, so they are free to make all sorts of claims, that all sorts of people believe. But don't respond to this point, consider this:

Again, I spent a lot of time in India, and it's damn hard to exist in a world where EVERYTHING is suspect. Are you buying a banana, or a banana peal that's been filled with shit and glued back together? The big craze while I was there were kids collecting used water bottles, filling them with tap water, putting a new cap on them, and selling them as new. Think about that the next time you have bottled water. Would you be able to tell if it was from a pure mountain spring or some kid's tap? Are you prepared to test and treat each individual bottle you buy?

A truely free market would look pretty much like what we have for car insurance now, minus the mandate that some states have. In a true Libertarian country, anyone not able to afford health care would have to rely on charity. You could get any kind of treatment or drug you want. There would probably be independent labs that took up testing of drugs and information would be available, but not no authority would forbid you from trying any given drug.

Would charities continue to get tax breaks?

In a country like the US, you'd have some regulation and a social safety net for poor people. No special tax treatment for HCI. Hospitals would not be required to treat anyone who showed up at the door, but most probably would anyway.

If they probably would, and I think that would be the case, what does a regulation matter? I'm required to wear my seat belt, but I would even without the law.

FYI, OP, I usually don't bother with these types of threads because they quickly devolve into rants about how libertarians are evil and enjoy watching people suffer.

Ya, I don't like that either. But the libertarian view point is fascinating to me. The more I read the less I get it. The words are all English, but they don't fit together in a sentence.

Auto insurance was just compared to health insurance. I can't imagine a worse example to choose from. I have zero confidence in auto insurance, I keep $10,000 liquidable to replace my car. I don't like to sift through 42 pages of legalese, designed with the specific intention of fucking me. Teams of lawyers and actuaries working to get the most money out of my while having an out should anything happen.

So when I start a thread like this, I'm actually hoping to hear a libertarian not just say, "we wouldn't have any regulation, so everything would be great." I'd really like to hear the how's and why's. The most important one being, "how and why does this not terrify you?!"

I recently needed some plumbing work done. That is a process I loath. I brought in 4 guys who all told me something different, quoting me wildly different prices, and then tried to guilt me into a variety of other services. Now, 6 months later, I'm not quite sure the guy did what he said he'd do. The thought of going through this with when my life is on the line scares the be-jesus out of me.

Is there anything in the Libertarian handbook that would help alleviate that fear?

Der Trihs

03-28-2010, 08:25 PM

Pretty amusing, considering that in the post above yours IMM is saying that anyone not as clever as he thinks he is can die from unsafe cars or quack remedies, and it is all their fault.Exactly; such accusations are made about libertarians because they are true. Or rather, there are the ruthless, arrogant "I'm superior to everyone else, nothing bad will happen to me and anything awful that happens to anyone else isn't my problem" libertarians; and then there are the rose-tinted-glasses libertarians who think everyone will get together and sing kumbayah in a perfectly free and wealthy society if that evil government gets out of the way and who insist that the bad parts of an uncontrolled free market Just Won't Happen.

emacknight

03-28-2010, 08:56 PM

Exactly; such accusations are made about libertarians because they are true. Or rather, there are the ruthless, arrogant "I'm superior to everyone else, nothing bad will happen to me and anything awful that happens to anyone else isn't my problem" libertarians; and then there are the rose-tinted-glasses libertarians who think everyone will get together and sing kumbayah in a perfectly free and wealthy society if that evil government gets out of the way and who insist that the bad parts of an uncontrolled free market Just Won't Happen.

FYI, OP, I usually don't bother with these types of threads because they quickly devolve into rants about how libertarians are evil and enjoy watching people suffer.

I'm starting to see your point. If only there was some sort of regulation...

DWMarch

03-29-2010, 02:58 AM

You could get any kind of treatment or drug you want... no authority would forbid you from trying any given drug.

This bears repeating. In a truly FREE free market, all drugs are legal. Cocaine, heroin, LSD, crack, pot, magic mushrooms, all that hillbilly shit people make out of cough syrup, et cetera.

Such free marketeering seems at odds with conservative philosophy.

Now it stands to reason that there will be websites out there that try to give you accurate information about given practices/drugs/clinics/et cetera. But if a free market is really free, anybody can claim anything. Here's an example. Right now, there is a diet product out there called Isagenix. It's pretty transparently obvious that this product is a multi-level marketing scam that relies more on the stupidity of those who buy in rather than any actual effectiveness of the product.

Now go Google "Isagenix scam". You'll find that that term has been Google-bombed by staunch defenders of the scheme who have filled dozens if not hundreds of webpages with "Is Isagenix a scam? HELL NO! It works for me... (now if you'll just hand over your credit card details and set yourself up at the bottom of my buy line over here...)"

That's your future in a free market for health care. Health care isn't regulated because perverse bureaucrats get their jollies from shitting on your freedom. Rather, there are a lot of unscrupulous assholes in this world who will sell you baking soda while claiming it's laboratory pure Colombian cocaine. And they'll smile with you as you snort it off their ass like it was the best idea you ever had.

IdahoMauleMan

03-29-2010, 06:57 AM

Health care isn't regulated because perverse bureaucrats get their jollies from shitting on your freedom. Rather, there are a lot of unscrupulous assholes in this world who will sell you baking soda while claiming it's laboratory pure Colombian cocaine.

You're deluding yourself if you think that is truly the case. That benevolent, caring government employees restrict us from buying drugs that are legal in Europe and Africa, or restrict people in New York from buying insurance policies that are legal in North Dakota because they care about us so, so very much.

Let me ask you something - would YOU buy 'pure Colombian cocaine' from an unscrupulous asshole? If not, why not? If so, why?

Lightnin'

03-29-2010, 07:32 AM

1. Doctors or other healthcare providers are free to get whatever licensing they desire, from whatever accreditation or guild they desire to get it from. But they don't have to. They don't even need to get a medical degree. They can hang out a shingle and start business tomorrow. So could you, if you want to. You can choose to go to whomever you want, and spend your money in whatever way you want. It's up to you.

Back alley, coathanger abortions for the poor, eh? The poor wouldn't be able to afford real doctors, so they'd be going to whomever they could afford.

2. Same with the FDA. If you want to buy only devices and drugs approved by the FDA, fine. If not, that's fine too. But the FDA does not have the authority to restrict anything that is sold on the market.

Who needs clinical trials, anyway? Sure, the wealthy get the good stuff... but the poor will take anything they can afford. Sucks to be them.

3. The 3rd point is a little murkier, since fraud (or breach of contract) can be punishable in a court of law.

But, Your Honor, my (sadly deceased) client clearly signed this waiver releasing me from any and all liability! He knew what he was getting into- if he wanted safe medical care, maybe he should've paid extra and bought the upgrade package. On the plus side, his leukemia isn't bothering him anymore.

Der Trihs

03-29-2010, 07:37 AM

Let me ask you something - would YOU buy 'pure Colombian cocaine' from an unscrupulous asshole? If not, why not? If so, why?In a libertarian society I would pretty much have to if I wanted some, because there would be no one else; the same goes for every other product. It's always, barring regulations and laws cheaper and more profitable to cheat. "Honest businessmen" exist, because laws discouraging dishonest business make it possible for them to compete. Without such laws they'd be forced out of business in a race to the bottom where only the more dishonest, ruthless and corrupt profited.

Especially since in a libertarian society scruples or any concern for other people is going to be looked down upon.

emacknight

03-29-2010, 08:00 AM

You're deluding yourself if you think that is truly the case. That benevolent, caring government employees restrict us from buying drugs that are legal in Europe and Africa, or restrict people in New York from buying insurance policies that are legal in North Dakota because they care about us so, so very much.

Let me ask you something - would YOU buy 'pure Colombian cocaine' from an unscrupulous asshole? If not, why not? If so, why?

Like Der Trihs said, they would ALL be unscrupulous assholes. The term "pure Colombian cocaine" would be meaningless. Right now there are regulations about what can be called yogurt, and regulations about food labeling so that you can see for yourself that it actually contains milk and bacterial cultures. There is also regulation about what is considered "milk." Remove that, and you have no idea what is in a container labeled "yogurt."

There is a certain cynicism that can be applied here, because [cow] milk producing industry has a lot at stake, and doesn't want the goat/sheap/coconut milk producers cutting into their business. They push for regulation and government complies. But at the end of the day, I'm happy knowing that the standard in place isn't "rat or better."

I remember a joke in the early days of the second Iraq war, as civil unrest was growing. One of the chief concerns was getting everyone power. Once they had power they were happy and didn't blow things up. Problem was, that Iraq had no regulations government utility poles. Anyone and everyone just went up and "plugged in" using what ever wire they found lying around. As a result the poles were a mess and took months to sort out.

As far as I can tell, under Libertarianism, everything falls to the lowest common denominator. Even the most honest and truly good doctor won't last a day, not because doctors are inherently evil. But because he'll be screwed by the first patient he sees.

Regulation is there to protect us from "other" libertarians.

emacknight

03-29-2010, 08:28 AM

Let me ask you something - would YOU buy 'pure Colombian cocaine' from an unscrupulous asshole? If not, why not? If so, why?

All snarkyness aside, I am still trying to figure out how a libertarian society would work. How would someone buy "pure Colombian cocain" when:
"pure" no longer means of or pertaining to greater than 97%
"Colombian" no longer meas of or pertaining to something from the country of Colombia
"cocaine" no longer means a crystalline tropane alkaloid that is obtained from the leaves of the coca plant.

I keep getting told that without regulation we'd be free to buy the things we want from the people we want. But there is a pretty significant "how" that needs to be addressed.

That is the point where I'm still waiting for an explanation. I get that you want to buy health insurance from North Dakota, and that you see regulation as stopping you. But I don't see the flip side, after deregulation, what makes you think ND will still have that insurance plan?

My belief is this
if a regulation prevents you from doing something
it does not necessarily follow that
deregulation will allow you to do that something

Lemur866

03-29-2010, 10:21 AM

Look, is this going to be a libertarian bashing thread, or a thread about what a free market in health care would look like?

Free market economics is not identical to libertarian ideology.

Fact is, without the rule of law, or custom so strong it has the force of law, a free market is impossible. If Dak wants to trade his baskets for Thag's chickens, but Thag can hit Dak over the head with a club and just take Dak's baskets, we don't have a free market.

So a free market requires some sort of rule of law, it requires a police force, it requires a judicial system. It requires a system for determining property rights, which are an arbitrary human construct and don't exist in a state of nature.

Originally marketplaces were under the protection of the nobility, who enforced certain standards--no robbery, no fraud, etc. This was not done out of generosity, but rather because enlightened despots understood that more trade meant more wealth, and more wealth meant more for the nobles to take for themselves.

So the customs of Europe in the middle ages were where our idea of markets come from. And when countries establish democracy and representative government, they don't throw out the already existing body of law and start from scratch, they mostly keep what exists and throw out the parts that were there for the benefit of the aristocrats.

So the antonym of a "free market" isn't a "regulated market", since each and every market must have some sort of regulation or another, or it isn't a marketplace but rather a mob scene. Saying that you aren't allowed to shoot someone, you aren't allowed to label rat poison as baby formula, you aren't allowed to use dishonest weights and measures, you aren't allowed to promise to pay later but then refuse...these things are all market regulations, but without them the market couldn't exist.

The difference between a free market and other systems isn't that there are no regulations, it's that the customer and the supplier and able to negotiate the price between themselves. If regulations set the price of the good, then there's no free market in that good. You either buy and sell at that price, or you do without.

So we don't have a free market educational system, we have a public school system. Sure, you can choose to attend a private school, but you have to pay taxes to support the public schools whether you use them or not. And the price set for attending public school is zero.

And the reason we have public schools is because we've determined that having a bunch of illiterate peasants makes things worse for everyone. Education for the peasants has strong positive externalities. It's not just the peasant himself who benefits from being able to read, but his neighbors also benefit when he can read.

So what would a "free market" health care system look like? It would look like what we had around the turn of the century. There would be doctors and nurses, and if you needed the services of a doctor, you'd send for the doctor, the doctor would come, and do his doctor thing, and then you'd pay him his fee for his services. Or, if you couldn't pay, you'd owe him. That's a fee for service model.

But what that model doesn't include is health insurance. And the problem with health insurance that sends the free market model out of control is the problem of third party payments. You could have a system where the patient pays for services--first party payment. Or a system where the doctor pays for services--second party payment. Or a system where someone else pays for services--third party payment. And the system of cost containment that would occur under first or second party payment doesn't exist. And it doesn't matter very much who that third party is, you're still going to get the same problem.

So it doesn't matter much whether that third party is an insurance company or a government agency, you're not going to see much difference. And of course, insurance companies have to have a high degree of oversight, because otherwise their natural inclination is to defraud their customers at every step--to take the premiums, but then not pay out. The difference between a highly regulated private insurance company and a public insurance system isn't going to be noticable.

And when we look around the world and compare places that have government insurance systems, compared to the private insurance system here in the US, we find that in actual fact the government systems tend to provide better service for less money. We could argue about why that is, but the hard cold empirical fact of the matter is that they do.

And this is why I've given up on looking for a free market in health care.

emacknight

03-29-2010, 01:49 PM

No, I think that the market manages to regulate itself pretty well. Many other countries don't have anywhere near the level of regulation on pharmaceuticals as does the U.S., and they get by just fine.

I think that sums up the problem pretty well. This idea that the market manages to regulate itself.

If you want to see this in action, take a look at a can of tuna. That can of tuna contains a low level of mercury, albacore tuna contains even more. But why do you suppose that isn't mentioned on the can of tuna?

Were you aware that it contains mercury? Do you like that it contains mercury? Is your next question, "how much does it contain?"

Well, the government hasn't decided to regulate it yet, probably because the tuna industry REALLY doesn't want to have to put a number greater than zero under the "Mercury" column on the ingredients list. Or maybe they're worried voters are tired of the government being involved with grocery items.

Are you planning to go through the trouble of sending each can to be tested?

What would it take for the tuna industry to "regulate itself" and start putting the mercury levels on the can of tuna? I know they were happy to put dolphin free, but when the can ISN'T mercury free, what do you suppose they'll say? "Choose Star Fresh Tuna, the one with less mercury."

Fresh and farmed salmon can also contain small amounts of PCBs, try asking your fish guy about it some time, see how much information is available in this unregulated area of the market.

And if your response is simply, "I don't eat canned tuna." I can run through a dozen other examples of low levels of things in your food that neither the government nor industry bothers to regulate.

By the way, did anyone have a bottle of water recently? Did you make sure to test it, or did you assume it wasn't refilled by a kid trying to make a couple of bucks?

03-29-2010, 04:45 PM

Look, is this going to be a libertarian bashing thread, or a thread about what a free market in health care would look like?

I'd say it's a libertarian bash-fest, as usual.

As has been said, a free market health care system would be one with an open market...plain and simple. It wouldn't be a libertarian system, it wouldn't be anarchy, it wouldn't be only for the rich, and everyone else would be going to witch doctors or using coat hangers for abortion or other dippy shit like that. In fact, you could have a free market health care system and still provide care for the poor out of direct funding and reimbursement from the government. Are you poor (defined in whatever way you like). Fine. Go see a doctor. Get a bill. Submit bill to government. Government pays the bill at the market price (or, perhaps, even cuts a deal and gets some kind of bulk discount...also allowed in a free market).

Basically, all a free market health care system means is that the government doesn't distort the market...which it does with both in our current system and in this new theoretical world we are moving to. Currently (and in whatever we get) the actual cost is distorted...in fact, it's so distorted that people have no idea what stuff actually costs. How much does an MRI cost, really? Gods know. So, the decision to get one (or not), from a users perspective, is based not on cost but on whim...or perceived need...or whatever. Because the actual price is distorted for everything, and since there are so many different ways it's distorted, covered, gamed, and whatever, else, it's difficult for people to make informed decisions.

Or, it could all be because libertarians are mean and junk, and they hate the poor, etc etc. I mean, that's what this thread is REALLY about, ehe? So...bash away..

-XT

Lemur866

03-29-2010, 04:56 PM

Der Trihs

03-29-2010, 05:00 PM

As has been said, a free market health care system would be one with an open market...plain and simple. It wouldn't be a libertarian system, it wouldn't be anarchy, it wouldn't be only for the rich, and everyone else would be going to witch doctors or using coat hangers for abortion or other dippy shit like that.Yes, it does, because anarchic libertarianism is what the people calling for free market this and free market that want.

In fact, you could have a free market health care system and still provide care for the poor out of direct funding and reimbursement from the government. Are you poor (defined in whatever way you like). Fine. Go see a doctor. Get a bill. Submit bill to government. Government pays the bill at the market price (or, perhaps, even cuts a deal and gets some kind of bulk discount...also allowed in a free market).

Basically, all a free market health care system means is that the government doesn't distort the market...which it does with both in our current system and in this new theoretical world we are moving to.You are contradicting yourself; having the government paying for health care will distort the market.

Currently (and in whatever we get) the actual cost is distorted...in fact, it's so distorted that people have no idea what stuff actually costs. How much does an MRI cost, really? Gods know. So, the decision to get one (or not), from a users perspective, is based not on cost but on whim...or perceived need...or whatever. Because the actual price is distorted for everything, and since there are so many different ways it's distorted, covered, gamed, and whatever, else, it's difficult for people to make informed decisions.Because medicine is too complicated for non-professionals to understand. And because "what the market will bear" is pretty much "anything" when your life and health are on the line. And because the entire health care process is unpredictable.

The holy "free market' simply won't and can't work properly with health care. Never has, never will.

Or, it could all be because libertarians are mean and junk, and they hate the poor, etc etc. I mean, that's what this thread is REALLY about, ehe? Yes, it is; "free market" is political code for "libertarian amorality and corporate greed".

Voyager

03-29-2010, 05:25 PM

03-29-2010, 05:56 PM

The thing is, the technicians performing the MRI have no idea how much that MRI will cost, either.

Steel workers probably don't have a good grasp of how the real costs for a given steel pour either, nor do I imagine a worker at 7-11 has a good grasp of the real costs for Slurpees, for that matter.

It is pretty much impossible to get a quote from a health care provider about how much a service will cost. Even if they know how much they bill the procedure at, that number is completely arbitrary and bears little relation to how much the procedure will eventually be compensated.

Given the current setup? You doubt. It's so hidden behind layers of government regulation, costs, reimbursement and a Byzantine maze of other things, and so, yeah...the price bears little relationship to the actual costs, and those costs (either absolute or actual) are almost completely hidden from the consumer...who, in turn has no idea what the real costs are for any of this stuff.

But that is how it IS...this thread (aside from the obvious libertarian bashing) is supposed to be about how it COULD be. It COULD be set up to be both a free market system and not be some draconian liberals nightmare to. The key though is that it's pretty obvious that few people in this thread actually seem to grasp what a 'free market' actually is (hint: It's not 'OMG! CORPORATE GREEEEEEED!'), and they can't put their ideology aside long enough to listen to the few people in this thread who DO seem to have a clue.

A free market reform at this point is pretty much impossible.

I guess I didn't realize we were talking about making a free market reform to the system. In fact, it was never even discussed or debated...people just assumed that 'reform' has to equal 'the government jumps in and saves the day'. I pretty much agree that, short of nuking the entire system, you couldn't get what we had (or what we are going to be getting) to a free market system. You MIGHT be able to shift it there after years or decades of reform, but I doubt it's possible. Doesn't seem to be what the OP was asking, in any case.

-XT

03-29-2010, 06:10 PM

You are contradicting yourself; having the government paying for health care will distort the market.

No, not really. You don't seem to grasp what a free market really is. The government is free to buy things in a free market, just like anyone else...and they are free to use their greater buying power to negotiate a better price. So, you could have a completely free market health care system, where the government simply buys a group policy (as if they were a large company) and enrolls citizens who meet some mutually agreed upon standard into the system, either free of charge or at some discounted rate.

Because medicine is too complicated for non-professionals to understand. And because "what the market will bear" is pretty much "anything" when your life and health are on the line. And because the entire health care process is unpredictable.

Networks are too complicated for a non-professional to understand. Plumbing is too complicated for a non-professional to understand. The mysteries of the internal combustion engine are too complicated for a non-professional to understand (which is why I take my care for service instead of try and do it myself). Any number of things are too complicated for non-professionals to understand. It's bullshit to single out medicine and say that it's too complicated for any non-professional to understand, so we need the government to tell us what's best for us.

We don't know what the price of things are because they are hidden from us almost completely. This has nothing to do with how complicated medicine is, and everything to do with the Byzantine system we currently have in place. So, there is NO market forces at work in health care, contrary to those who claim our current system in any way resembles a 'free market'. The costs are hidden by the government, by private insurers, but various regulations, by doctors, by quasi-government health care agencies, but just about everyone involved in the process...and so, people don't have any idea of what the costs ARE, or how to make even the most rudimentary judgment. Putting it all on the government just makes it worse, since it puts the final decision process in the hands of a bureaucrat, as people will have even less idea what the real costs are, or be able to judge what care is necessary, reasonable, or unreasonable. So, someone asking for a hip replacement at 94 will question why they were turned down, without really grasping what the reasons were, or what the costs and trade offs were, because someone else will have made that decision for them, and it will all be completely opaque to the end user.

The holy "free market' simply won't and can't work properly with health care. Never has, never will.

Oh...well, I'm glad that's settled then. Since you obviously know what you are talking about, and can simply make such a statement out of your ass and all...

...oh, wait! You don't have a clue what you are talking about, and you are speaking through the lens of your skewed ideology! :smack: Such as...

Yes, it is; "free market" is political code for "libertarian amorality and corporate greed".

...this gem.

-XT

begbert2

03-29-2010, 06:24 PM

The key though is that it's pretty obvious that few people in this thread actually seem to grasp what a 'free market' actually is (hint: It's not 'OMG! CORPORATE GREEEEEEED!'), and they can't put their ideology aside long enough to listen to the few people in this thread who DO seem to have a clue.What do you suppose a free market actually is? Because in my economics class, it had nothing to do with buyers knowing the costs the sellers incur - the "actual price". All the buyers have to know is how much they'll have to pay for what they get - which in the health care market they do (or can), assuming the insurance company doesn't bail on them or screw them over over a previously unknown technicality.

So, if the health care market is unfree, it's not becuase of that. So, what's making it unfree? Well, last I heard to be a free market buyers have to be able to choose amongst sellers, and sellers have to be able to choose amonst buyers - freely engaging in the transactions, and people have to be able to engage in transactions freely based on mostly accurate information. And the current system allows this. So technically the health care market is free (give or take that it's regulated - not everyone can be a doctor.) It's just that much of the business is done between patients and insurance companies, and insurance companies and doctors, rather than directly between doctors and patients. This alone doesn't make the market(s) unfree - though it does make it confusing.

It is true though that the insurance companies like to mess around with contracts so that patients aren't getting what they thought they were paying for. Which would mean that information breakdown is one area where the freedom of the market is truly impinged.

Of course, this puts aside whether the free market works for health care - which would depend on what you mean by "works", I suppose.

IdahoMauleMan

03-29-2010, 06:42 PM

The thing is, the technicians performing the MRI have no idea how much that MRI will cost, either.

It is pretty much impossible to get a quote from a health care provider about how much a service will cost. Even if they know how much they bill the procedure at, that number is completely arbitrary and bears little relation to how much the procedure will eventually be compensated.

The only exceptions are elective procedures, like cosmetic surgery. Then you'll get a hard number. But otherwise, forget it. So you can't just walk into a hospital, ask how much it will cost to set your broken leg, and bargain. If you don't have insurance, you'll be billed two or three times the amount. Nobody will know how much it costs. The whole system is designed to obfuscate costs.

A free market reform at this point is pretty much impossible.

Good posts. But I disagree with your conclusions.

As I'm sure you have figured out, a lot of elective procedures have price tags on them because they aren't covered by insurance. And therefore, consumers need clear price information in order to weigh the costs and benefits, and make the tradeoffs accordingly. Just like buying a stereo or a box of Tide.

Your other posts suggest insurance is part of the problem. I disagree. I think insurance policies will arise naturally and be far more improved in an unregulated market than they are today. In some of the freer state insurance markets, high-deductible policies have become enormously popular, quickly. Those policies actually kill two of our birds with one stone - they are affordable in that they generally only cover catastrophic occurrances above some large deductible, and the presence of the large deductible itself is causing more and more price information to be revealed to consumers.

The big problem is *over-regulation* of insurance....that reduces competition and choice for consumers. Over-regulation drives up the cost of policies and/or outlaws certain types of policies altogether. Some states have banned high-deductible policies. States like New York and New Jersey which have high premiums are invariably the heaviest regulated - smaller, entreprenurial insurance firms can't compete so they don't bother to.

There is nothing evil about insurance. Insurance has naturally arisen in free markets since the Middle Ages to transfer risk from those who want it and can manage it, to those who don't and cannot, in exchange for a premium. I think you'll find that over-regulation of insurance is the true culprit, if you dig a little deeper.

begbert2

03-29-2010, 06:47 PM

There is nothing evil about insurance. Insurance has naturally arisen in free markets since the Middle Ages to transfer risk from those who want it and can manage it, to those who don't and cannot, in exchange for a premium. I think you'll find that over-regulation of insurance is the true culprit, if you dig a little deeper.Personally I think the ability/tendency of insurance to drop people who have serious problems is the real killer, since it removes the risk management aspect completely - the whole point of insurance is to cover you in cases of catastrophe (or whatever it is they contract for), which insurance no longer reliably does.

Der Trihs

03-29-2010, 07:21 PM

Networks are too complicated for a non-professional to understand. Plumbing is too complicated for a non-professional to understand. The mysteries of the internal combustion engine are too complicated for a non-professional to understand (which is why I take my care for service instead of try and do it myself). Any number of things are too complicated for non-professionals to understand. It's bullshit to single out medicine and say that it's too complicated for any non-professional to understand, so we need the government to tell us what's best for us.History and science proves you wrong. People don't know what is best for them when it comes to medicine. Without the government stopping them, they go for "treatments" that don't work or are outright dangerous.

We don't know what the price of things are because they are hidden from us almost completely. This has nothing to do with how complicated medicine is, and everything to do with the Byzantine system we currently have in place. No, it has plenty to do with that complexity. No one knows how expensive medical care is going to be beforehand. And the typical consumer has no way of rationally choosing between options. And in a free market for health care - which is largely what we have, which is why it is so bad - the real answer always is "how much can you pay".

So, there is NO market forces at work in health care, contrary to those who claim our current system in any way resembles a 'free market'.Nonsense. Market forces are very powerful in health care; namely, the market force known as "pay or die". The nature of a free market in health care is that you will always be forced to pay whatever can be squeezed out of you because you can't just walk away.

Putting it all on the government just makes it worse, since it puts the final decision process in the hands of a bureaucrat, as people will have even less idea what the real costs are, or be able to judge what care is necessary, reasonable, or unreasonable. Nonsense. First, because at least a government bureaucrat isn't making his profit margin by cheating you as badly as possible. And second, because all over the world we see the exact opposite. You are just indulging in the standard right wing faith statement that government is automatically bad.

Oh...well, I'm glad that's settled then. Since you obviously know what you are talking about, and can simply make such a statement out of your ass and all...Oh, please. You are then one making the ridiculous claim that is clearly contradicted all over the world and throughout all of history. Free market health care has always boiled down to scams and extortion. Snake oil, homeopathy, faith healing, insurance companies denying payment. That's why the civilized world has moved away from it; it just doesn't work. You are the one making the baseless, dogmatic claim that the magic free market must - MUST - be superior, despite all the evidence.

Voyager

03-29-2010, 07:31 PM

S

Given the current setup? You doubt. It's so hidden behind layers of government regulation, costs, reimbursement and a Byzantine maze of other things, and so, yeah...the price bears little relationship to the actual costs, and those costs (either absolute or actual) are almost completely hidden from the consumer...who, in turn has no idea what the real costs are for any of this stuff.

But that is how it IS...this thread (aside from the obvious libertarian bashing) is supposed to be about how it COULD be. It COULD be set up to be both a free market system and not be some draconian liberals nightmare to. The key though is that it's pretty obvious that few people in this thread actually seem to grasp what a 'free market' actually is (hint: It's not 'OMG! CORPORATE GREEEEEEED!'), and they can't put their ideology aside long enough to listen to the few people in this thread who DO seem to have a clue.

I guess I didn't realize we were talking about making a free market reform to the system. In fact, it was never even discussed or debated...people just assumed that 'reform' has to equal 'the government jumps in and saves the day'. I pretty much agree that, short of nuking the entire system, you couldn't get what we had (or what we are going to be getting) to a free market system. You MIGHT be able to shift it there after years or decades of reform, but I doubt it's possible. Doesn't seem to be what the OP was asking, in any case.

-XT

The interesting question is how could we change the current system in the direction of freedom (whatever that means) without causing (more) social harm. I have a choice of two insurance companies and 3 plans, but that restriction has nothing to do with the government and everything to do with my employer, who had more choice to select a plan than I do. My company clearly negotiates a better deal with insurers than I could, in fact my old company got acquired by a bigger one, with more buying power, and my new insurance plan is a lot better, with lower percentage payments and lower co-pays for drugs. I don't see any lack of a free market, for me.

Now, if I wasn't covered by my employer's insurance, the free market allows any insurer who wants to to pick me up or not allow me to buy insurance. I suspect I wouldn't be able to get any. Exactly how would I benefit from this freedom? The insurer does, certainly. You may laugh at us being worried about corporate greed, but in fact an insurer has an obligation to its owners to maximize profits, and has no obligation to cover people who represent a greater risk than they are willing to bear, especially considering competitive pressure. Call it GREED or call it good business practices - the guy with the pre-existing condition is just as screwed.

In your answer to DerTrhihs it sounds like you are advocating a public option. I agree with your point there, but you remember the great uproar about this. The problem is, if the government ran it as a business, it might out compete private insurers. (I think they would be forced to be more efficient, but some conservatives seem to have little faith in competition.) If the government was the insurer of last resort there would clearly be a tax hit, and I don't see conservatives liking that either.

Now, as for pricing, we have a market in elective surgery because it is elective. It is rare to need an emergency boob job. Expensive procedures don't allow shopping time. We have a large population of people now with either no insurance or high deductible insurance - I'd love to see a study showing them as better consumers while not affecting their health and outcomes. The fact is that in our current system our insurance company is our agent in negotiating prices with providers, and does a far better job than an individual, especially an individual in a crisis situation. As an analogy, do you think a tow truck operator gets a better prices from a random guy stuck on the road and calling, or from AAA when the guy is covered? Even with Google on your phone, do you think calling around to 3 places is going to get you a better deal than AAA can negotiate? I'd love for anyone making claims that forcing consumers to act alone to give a mechanism where this would reduce prices without harming health. You are asking us to believe that a guy with a chest pain can negotiate a better price than an insurance company offering millions of dollars of business, being willing to negotiate for weeks or months, and armed with mounds of statistical data. Yeah, right.

Voyager

03-29-2010, 07:39 PM

No, it has plenty to do with that complexity. No one knows how expensive medical care is going to be beforehand. And the typical consumer has no way of rationally choosing between options. And in a free market for health care - which is largely what we have, which is why it is so bad - the real answer always is "how much can you pay".

I think you are falling into their trap, that of calling it a free market only if every person is in it for him or herself. Buying insurance from a large insurer with purchasing power is every bit as much a part of the free market as buying it on your own. The problem is that so many Americans are excluded from participation from this part of the market for reasons of not having enough money, or being self-employed, or having a pre-existing condition. That is where the market breaks down, assuming you think it is wrong for people without access to insurance to go bankrupt or die. There were only two choices - forcing insurers to take people or letting the government take over. Since the latter was so horrid, we have the former.

emacknight

03-29-2010, 07:39 PM

No, not really. You don't seem to grasp what a free market really is. The government is free to buy things in a free market, just like anyone else...and they are free to use their greater buying power to negotiate a better price. So, you could have a completely free market health care system, where the government simply buys a group policy (as if they were a large company) and enrolls citizens who meet some mutually agreed upon standard into the system, either free of charge or at some discounted rate.

Now this is a plan I can get behind, where do I sign up?

All joking aside, I actually wrote up a thread about a year ago suggesting this.

Networks are too complicated for a non-professional to understand. Plumbing is too complicated for a non-professional to understand. The mysteries of the internal combustion engine are too complicated for a non-professional to understand (which is why I take my care for service instead of try and do it myself). Any number of things are too complicated for non-professionals to understand. It's bullshit to single out medicine and say that it's too complicated for any non-professional to understand, so we need the government to tell us what's best for us.

It is for these very reasons I absolutely DREAD health care being privatized and part of a free market. Maybe you have better experiences with your mechanic, but the whole thing is based on one way information flow. Taking your car in to the shop is a license for them to FIND something wrong. And how would you know? Unless you are a trained mechanic you are at their whim. But the free market, which is supposed to regulate itself, seems happy to have an entire world full of crooked mechanics. Even worse is when they know you NEED them. If you tow your car to the shop, they've got you by the balls, what can you say? Uh, no thanks, I'll tow my car around from shop to shop until I get the best price? And this is where price gouging comes into play.

Let's extend this to the medical world. You have a pain in your abdomen. What is it? Could be gas, could be diverticulitis, could be colon cancer, could be a blocked artery. How are you going to find out what it is? How are you ever going to trust the person you see?

Just like the mechanic case, if it's gas, in a free market a doctor will have no problem telling you it looks serious and that he should operate.

Now, imagine your doctor waking you up, mid surgery to say he found some other stuff, and it's going to cost $10,000.

What recourse do you have? Uh, no thanks doc, if you could just stitch me up I'll get my buddy to look at that when I get home. Now, obviously they wouldn't wake you up. But if your loved one was in the OR, and the doc comes out and says (just like mechanics always say to me), "we found some more stuff, here is our new price chart for when people are already in the OR." What are you planning to do? Let your loved one die and write a strongly worded letter to the Better Business Bureau?

The reason I fear free market being applied to health care is that I can't imagine it playing out any other way. How are you supposed to negotiate prices, choose what best suits you, when you are unconscious and wheeled into an ER?

Okay, one final example: I was a lifeguard for a number of years, and had pretty significant number of rescues. In a free market, would I have been able to paddle out, and begin to negotiate?

What I really want to know is that when your life is on the line, at what point does "free market capitalism" become extortion?

That's what I'm hoping libertarians, in between bashings, can explain to me.

Voyager

03-29-2010, 08:06 PM

It is for these very reasons I absolutely DREAD health care being privatized and part of a free market. Maybe you have better experiences with your mechanic, but the whole thing is based on one way information flow. Taking your car in to the shop is a license for them to FIND something wrong. And how would you know? Unless you are a trained mechanic you are at their whim. But the free market, which is supposed to regulate itself, seems happy to have an entire world full of crooked mechanics. Even worse is when they know you NEED them. If you tow your car to the shop, they've got you by the balls, what can you say? Uh, no thanks, I'll tow my car around from shop to shop until I get the best price? And this is where price gouging comes into play.

True, if you have a breakdown. If you are in a collision, and covered by insurance, your company has negotiated a fair price with the body shop - and they will even pay to have your car towed if it winds up in a place they don't have a deal with. More or less like health insurance today.

The difference between cars and people are that there is a reasonably low cap on how much you will pay for car repairs, and a garage knows it. I'm lucky in having an honest mechanic. When my old Saturn was losing water I brought it in, they looked at its biggest problem first, and told me it would cost $1800 to fix, so I might as well drive it home and shoot it. I did, and it didn't cost me a penny. If it was a person, the story would be different.

Look at vets. People who place an excessively high value on their pets pay a ton for open heart surgery and the like. Most people have an upper limit on what they can afford, and that keeps the costs down.

Der Trihs

03-29-2010, 08:35 PM

True, if you have a breakdown. If you are in a collision, and covered by insurance, your company has negotiated a fair price with the body shop - and they will even pay to have your car towed if it winds up in a place they don't have a deal with. More or less like health insurance today.

The difference between cars and people are that there is a reasonably low cap on how much you will pay for car repairs, and a garage knows it
A few other differences.

There are alternatives to fixing that car, or even having one; you can borrow one, take the bus or a cab. If I have a heart attack, I can't ask my brother if he'll loan me his heart like he'd loan me his truck. They just don't have you over a barrel with vehicles the way they do with your health. You don't just have to pay what they ask like you say; you also often can't put it off or find a workaround.

If they cheat or stonewall you on the repair work done to your vehicle, you'll most likely still be there, angry, and in a position to sue them if necessary. With health care, they can put you off until you die. They can wait you out.

You are a lot more capable of becoming violent if pushed to the edge. Insurance companies wouldn't be nearly as ruthless I think, if they weren't typically preying upon people in no condition to go berserk and attack one of their offices. And no I don't think I'm exaggerating things; we are talking about threatening people's live and health here. And related to that:

The people doing the actual work are more likely to have to face pissed off customers screaming in their face, or at least be in hearing distance; instead of having a secretary of a subordinate of a subordinate deal with it.

emacknight

03-29-2010, 08:41 PM

Now this is a plan I can get behind, where do I sign up?

What I really want to know is that when your life is on the line, at what point does "free market capitalism" become extortion?

True, if you have a breakdown. If you are in a collision, and covered by insurance, your company has negotiated a fair price with the body shop - and they will even pay to have your car towed if it winds up in a place they don't have a deal with. More or less like health insurance today. ..

Care to address the rest of my post?

Do you see the potential for extortion (price gouging) or is this entirely an irrational fear I have?

Lemur866

03-29-2010, 09:22 PM

Voyager

03-30-2010, 01:53 AM

Care to address the rest of my post?

Do you see the potential for extortion (price gouging) or is this entirely an irrational fear I have?

I agree with the rest of your post. I thought that was clear. Without the insurance company behind you you are clearly subject to price gouging, especially if you have no alternate transportation in the car case. There are good mechanics, but there are plenty of rip off ones also, especially if you seem ignorant of how cars work. I think the main point is that unless you have some market power, you are going to get walked over as an individual. That goes for insurance companies dealing with doctors or garages, and employers dealing with insurance companies. Unlike the cases of Dopers with individual coverage, my health insurance company never gives me any crap - because if they did, they'd have to deal with a 1,000 pound gorilla.

Voyager

03-30-2010, 01:59 AM

You are a lot more capable of becoming violent if pushed to the edge. Insurance companies wouldn't be nearly as ruthless I think, if they weren't typically preying upon people in no condition to go berserk and attack one of their offices. And no I don't think I'm exaggerating things; we are talking about threatening people's live and health here. And related to that:

The people doing the actual work are more likely to have to face pissed off customers screaming in their face, or at least be in hearing distance; instead of having a secretary of a subordinate of a subordinate deal with it.

Heh. They probably consider the poor saps who have to explain to the patient with cancer why his insurance just got canceled as disposable. I'm sure they've got spreadsheets to compare the costs and benefits of ripping people off enough to get to the edge of shooting up an office. Too much bad publicity and it's not worth it. Before I get accused of demonizing industry, this is exactly what Ford did with the Pinto.

IdahoMauleMan

03-30-2010, 04:24 AM

P1. But what's the difference between the government deciding to buy everyone private insurance, and the government self-insuring everyone.

Small or medium size companies never self-insure because they aren't large enough, but very large ones often do. So why involve private insurance companies in the first place? What value does the private insurance company add to the transaction?

P2. If the risk pool is the entire country, the government is the most effective risk manager. And if people want health care that the public insurance doesn't cover, they're free to pay out of pocket, or contract with a private insurer. But the empirical evidence shows that countries that provide universal health insurance provide better health care for lower cost.

P3. It would be one thing if we looked around at France and Germany and Britain and Japan and discovered that they had sky-high medical costs, or worse medical outcomes. But it turns out that these countries spend about half what we do, per capita, despite covering everyone. And it turns out that on almost every national health statistic they do better--infant mortality, life expectancy, and so on.

So while a real free market system might concievably be better than the public health systems that other first world countries have, the cold hard facts show that a public health system would provide better care and cost much less than the bastard system we currently have, which combines the worst of all worlds.

.

I think there is a bit more to the story than that.

P1. Risk management is a skill. Good risk management involves sophisticated techniques in origination, underwriting and account management.

It's the reason that some banks and credit card companies and insurance companies are still standing and make lots of money, and others go bankrupt (or would go bankrupt, if the government didn't provide them with bailout money).

Go read a little about Warren Buffett's insurance companies, and then read about how Countrywide originated mortgages, and see if you can spot the difference in how they do business. It's huge.

Having the government in the business of risk management is a disaster waiting to happen. The process will become politicized. Special interest groups will come lobbying for favors, as they do already with state insurance regulators and national banking regulators.

Plus, government employees have no competence or skill in risk management. They are career bureaucrats who probably wouldn't know a regression model or CHAID analysis tree if it bit them in the ass.

One only needs to look to Freddie and Fannie to see how the government getting involved in the business of mortgage risk management has turned into a disaster. The process has become politicized and we as taxpayers are on the hook for hundreds of billions of $$, if not trillions of $$. And it isn't ending. The gubmint essentially handed F & F a blank check on Christmas Eve of last year, when they hoped nobody was looking.

P2. Your point touches on basic issues of freedom of choice. By 'forcing' me to participate in a nationwide risk pool, you are removing my freedom of choice to do without insurance and assume the risk myself. You will force me to pay a premium for a product I don't want.

There are indeed people who, through no fault of their own, have catastrophic events happen to them that make them uninsurable. Subsidizing these high-risk pools is fine thing to do. But the actual % of the population in that category is remarkably small, despite all the sob stories that UHC proponents will trot out on MSNBC. There is no need for a massive government takeover of 1/6th of the economy, with sweeping near-dictitorial powers, to address a tiny portion of the overall population. There are other more efficient and simpler ways to do it. Try and keep things in perspective.

P3. I would have thought this canard would have been thoroughly debunked by now, given the public debate over the past year. Simply measuring life expectancy and correlating it to health care $$ is a tremendously over-simplistic (and wrong) way of measuring health-care spending effectiveness.

The US life expectancy figures are skewed lower by much higher homicide and traffic accident rates....two things that have absolutely nothing to do with health-care spending. Here's one cite

http://www.aei.org/docLib/20061017_OhsfeldtSchneiderPresentation.pdf

Take a look in particular at the hair-raising homicide rates amongst black Americans compared to other countries. That has absolutely nothing to do with health-care spending, yet drags down our overall life expectancy figures.

When you actually measure how health-care $$ are spent (like treating cancer)and then look at the outcomes of that treatment, the US shoots right to the top.

On the infant mortality side, I'm Googling for a cite, but there is plenty of evidence to suggest that the US figure is 'low' because we actually try and save so many low-birthweight babies that other nations simply discard. In other words, we include a bunch of babies in our denominator that they do not, which skews our mortality rate higher.

Here's one cite...

http://archive.newsmax.com/archives/articles/2005/3/9/184540.shtml

You seem like a smart guy (or girl). Do yourself a favor and empower yourself more to make decisions. Don't sign over your rights - and your money - to a government employee to tell you what you can do and cannot do.

Der Trihs

03-30-2010, 04:49 AM

Having the government in the business of risk management is a disaster waiting to happen. The process will become politicized. Special interest groups will come lobbying for favors, as they do already with state insurance regulators and national banking regulators.

Plus, government employees have no competence or skill in risk management. They are career bureaucrats who probably wouldn't know a regression model or CHAID analysis tree if it bit them in the ass.Ah, once more with the standard, baseless claim of innate government incompetence.

P2. Your point touches on basic issues of freedom of choice. By 'forcing' me to participate in a nationwide risk pool, you are removing my freedom of choice to do without insurance and assume the risk myself. You will force me to pay a premium for a product I don't want.And then when you get injured or sick anyway, make us pay for it, without you ever having paid in. I doubt anyone really believes that you would refuse all care and let yourself die out of libertarian principle. Your noble principled stand for liberty ultimately amounts to a demand that you be allowed to play parasite, to leech off the rest of us while making claims about rugged individualism.

You seem like a smart guy (or girl). Do yourself a favor and empower yourself more to make decisions. Don't sign over your rights - and your money - to a government employee to tell you what you can do and cannot do.And now the libertarian appeal to ego; only the stupid people need help!

03-30-2010, 09:36 AM

But what's the difference between the government deciding to buy everyone private insurance, and the government self-insuring everyone.

The same difference between the government buying food from farmers to give to hungry people as opposed to trying to grow it themselves. Think of anything the government does...military, space program, housing, whatever. Then consider who actually does the work. By and large, the government bids out this kind of work to contractors, who are, at least in theory, experts in their chosen field, instead of trying to grow food, construct houses, build space craft or military hardware, etc. Even in the contracting and project management aspects, my experience is that it generally costs the government more and they get a worse product than if you had the same thing built for a private company. The problem is that big ticket items get parceled out among as many states as possible, for political reasons, and this generally drives up the costs. In general, government workers are sub-par workers, especially when you get into the higher GS or SCS positions (and the appointed positions are almost uniformly idiots, in my own experience). Couple that with the high levels of inconsistently applied regulation, which while generally Byzantine in it's complexity usually has all kinds of chinks, holes, and provisions that allow the contracts to abuse or game the system, and you are talking about a system that is set up and even encourages abuse.

That said, the government generally gets a much better product when it buys an existing product off the shelf from industry than it gets either from sending out an RFP, collecting and reviewing bids, awarding a final contractor (based mainly on price, but politics definitely factors in on the big ticket contracts), then overseeing the development of whatever project they are doing...or in building it and running it themselves (which, as I said, they almost never do, and with good reason).

As I see a free market health care system, an individual or group of individuals would be free to buy a health care policy at whatever price they wanted to buy, similar to car insurance. Maybe an individual only wants catastrophic health insurance in case of a bad accident or something like cancer. Others would want routing health care, others would need more care. Since the government and industry wouldn't be taking out their rather large piece of each individuals pay check for health care, and individual would be able to choose a plan they could afford. The government could then provide support for the group of people who couldn't afford their health care needs through general taxes, instead of the loopy system we have now (and the system we are about to get). Someone who meets whatever bar is set to get assistance from the government (and I'd go for a graduated bar, starting at full coverage and steadily going down to partial subsidies) would go and acquire the plan of their choice (based on their income and whatever the direct subsidies would be set to), and then submit the plan for reimbursement from the government.

It's a subtle difference, but I think it would cut overall costs, and it would let people make choices, instead of a one size fits all type solution. It's funny, but in many UHC countries I've seen they continue to have the private option available for people who want more out of their system, because choice is important, and one size really doesn't fit all. Myself, I think that a free market health care system would cut costs and simplify things, and would let people make more rational decisions about the real world costs of the services they are asking for. The way it is today (and the way it's going to be under this new plan), people don't know the difference between a Yugo and a Mercedes, and because that cost is hidden, invariably want the Mercedes, even when the Yugo would work for them just as well. Or, because of how the insurance companies work currently (and I don't see this changing that much) they get a Yugo when they really need the Mercedes, but because the costs are hidden and the services opaque, they have no idea what the real issues are.

Small or medium size companies never self-insure because they aren't large enough, but very large ones often do. So why involve private insurance companies in the first place? What value does the private insurance company add to the transaction?

Simply not true, and also doesn't really bear on the point. The way the current system is, in many cases health care is too expensive for some companies (though I've worked for both small and medium companies who have health care). The costs are high though because of the way our health care system is set up, the regulations, the way it's tied to employment, the quasi-government nature of the system, and the fact that the costs are hidden from the public, who don't really know whether they need that MRI or whether it's just padding the bill, or whether they need a generic drug or the brand name...and hundreds of other opaque aspects of the industry, many of which further drive up costs. The maze of regulations and costs, the fact that in some places an insurer has a virtual monopoly on local customers (since it's tied to employment), that in some cases you can't cross state lines, etc etc.

As to value, you could ask the same thing about any kind of insurance. What value does a private car insurance company give you? Why not have the government insure all cars? How about private home insurance? Again, why not have the government do that to? Boat insurance? Plane? What value for any private company...why not have the government do everything? I mean, if the government is the optimal choice for health insurance, why wouldn't they be for everything?

It would be one thing if we looked around at France and Germany and Britain and Japan and discovered that they had sky-high medical costs, or worse medical outcomes. But it turns out that these countries spend about half what we do, per capita, despite covering everyone. And it turns out that on almost every national health statistic they do better--infant mortality, life expectancy, and so on.

Well, as IdahoMauleMan pointed out, those stats can be looked at in several ways, and they don't necessarily equate. As to your first point, as I've said in other threads (and been dismissed), their political systems aren't the same as ours. People seem to think this means America is 'special' or 'exceptional' (and, of course, we are :p), but what it really boils down to is we are different. If you think of any big ticket government program, you will see what a political football it becomes. Want to build a state of the art jet fighter (that we don't need)? No worries...just offer to build it in enough states with enough on the side political support in the form of campaign funding and there you go...problem solved. Oh, it will cost several times more than originally projected, and while it will probably be a fine airplane it won't be the optimal plane that was actually needed, but we'll get something out of the deal. Some time take a look at the Space Shuttle program, what it was originally supposed to be (and cost) and what it turned into...and then think about where this new heath care entitlement may be going to.

Other countries don't have these same kinds of problems because other countries don't have the same political system we do, and their citizens are more homogeneous and less contentious than ours are...and, IMHO, they are more willing to let their governments do what they think is best than our citizens are, or their governments are in better positions to DO stuff that they think is 'best for the people', despite what the people necessarily think of that in the short term. Consider France and it's nuclear power system (which isn't all that popular with a lot of French citizens)...then consider our own languishing nuclear power industry here in the US. Huge difference, no?

So while a real free market system might concievably be better than the public health systems that other first world countries have, the cold hard facts show that a public health system would provide better care and cost much less than the bastard system we currently have, which combines the worst of all worlds.

Actually, I think just about any system would be better than what we currently have. Myself, I think that a 'real' free market system would work better in the US than either what we had and what we are seemingly getting with this new bill, but it's as likely as us getting European style UHC (which this bill definitely is NOT giving us), because of the way American's and American politics works. So, of the things we actually COULD do (in the real world), then this new system we are getting is probably about as good as it gets. It's costly, will probably be more so as it bloats up, but it does fix a number of problems...and who knows? Maybe it will pave the way for an even better system. I'm just not going to hold my breath, because at the end of the day, it's going to be deformed and changed by our system (at some point the Republican's will gain more power and start to change it, the voting public will either love it and vote for more or hate it and scream for budget cuts and savings, etc) because that is the American way.

At any rate, I think I'll leave you all to it as I don't have much more to add and RL is seriously hammering me atm.

-XT

Voyager

03-30-2010, 03:00 PM

IMM claims that the homicide rate in the US is a major factor in our lower life expectancy as compared to Europe. He of course offers so cites - the reason for which will soon become clear.

First, the mortality rate in the US from all causes is 810.4 per 100,000 population. Cite (http://www.cdc.gov/nchs/fastats/deaths.htm). The homicide rate for the US averaged 8.8. Cite (http://www.benbest.com/lifeext/murder.html). Puerto Rico brings up the average a lot, as you can see from the table a bit lower down in the page. The South is much higher than New England (only 2.4). Thus, murder rates won't have much of an impact on mortality rates, even if Europe is 0.

However, there is another source of mortality - suicide. This cite has a graph of murder and suicide rates by region, with European murder rates much lower than those of the Americas, but suicide rates much higher. Now, Latin American countries have a much higher murder rate than we do, but a lower suicide rate. You can find a table of suicide
rates per country here (http://www.who.int/mental_health/prevention/suicide_rates/en/index.html). It is split by male and female, since these rates are significantly different. The rates in the US are 17.7 and 4.5 respectively (per 100K) or averaging about 11 assuming roughly equal distributions. In France it is 25.5 and 9.0, averaging 17. If the homicide rate in France is above 2 per 100K, they lose more to violence than we do, but even if it were 0 the difference of 2 per 100K is not enough to affect much of anything.
Thus, murder rates cannot explain the difference in mortality rates. You'd be much better off going with the fatty defense, which isn't so obviously bogus.