Indulging Our Health Care Fantasies

The problem with Obama's health care plan

It's been 15 years since President Clinton's health care reform plan went down to defeat, and the problems it was supposed to fix have only gotten worse. Costs have soared, the number of uninsured has risen, and public dissatisfaction has mounted.

But now, at last, we are all ready to do what must be done. As President Obama puts it, "I really think that the stars may be aligned here."

Don't bet on it. The Clinton plan lost partly because Americans were not willing to accept that you can't have it all. From everything that has occurred since then, it's apparent they are still unwilling.

The Obama administration understands this crucial point, which is why it has undertaken to assure us that everything we like about the current health insurance system will stay the same, while everything we don't like will be replaced. And, we are led to believe, it won't cost you and me anything.

Estimates of the cost of Obama care start at $1.2 trillion over the next decade. The administration believes it can cover about half that amount through tax increases on the rich and greater efficiencies in Medicare and Medicaid. But it's hard to find anyone else who shares that touching faith. When I asked Robert Bixby, head of The Concord Coalition, a bipartisan fiscal watchdog group, he said, "I don't see any plausible way of getting the savings they need to add the expanded coverage in a deficit-neutral way."

There are only three ways to pay for this expansion of health insurance coverage: increased taxes, reduced benefits, or shiny gold ingots falling out of the sky. Voters emphatically prefer the latter option, so that is the one most likely to be embraced by Congress and the administration.

If health insurance were such a vital asset, you would think Americans would be more than happy to make sacrifices to get it. After all, it assures timely and adequate treatment in times of sickness, peace of mind in times of health, the prospect of a longer and happier life, and protection against financial ruin. Health care reform is supposed to make those blessings available to all.

But when most people talk about reform, what they really mean is guaranteeing the same or better coverage than they now have, but at a lower price. A recent Kaiser Family Foundation/Harvard School of Public Health poll found that 49 percent of Americans aren't willing to pay more in insurance premiums or taxes.

Of those who could accept higher taxes to finance a new system, most are thinking of higher taxes on someone else. As the researchers explained, "The only options with majority support were those likely to impact the fewest people, in particular smokers and the wealthy."

Even among the uninsured, the enthusiasm for insurance is muted. When another Kaiser poll asked uninsured adults how much they would be willing to pay to get coverage, only 64 percent would fork out $100 a month and just 29 percent would pay $200. Given that most are not poor, why is it so important to provide the uninsured with something they don't value highly?

One way to bring down the cost of health insurance is to limit access to certain doctors, treatments, and medicines. But the Kaiser/Harvard poll found most people are averse not only to paying more but also to anything that would "involve government limiting or dictating their choices."

Or anyone else, by the way. Most people have forgotten that in the 1980s, the private sector devised an ingenious way to reduce medical outlays. Known as managed care, it put modest restrictions on the freedom of patients to get care from specialists, limited hospital stays and gave doctors incentives to choose less costly therapies. It saved money, and it didn't appear to reduce the quality of care.

It was a perfect remedy, except for one thing: Patients and doctors hated it. Why? Because it kept them from behaving as though cost is no object.

So managed care is history. But the dilemmas it addressed are not.

One of these days, we'll have to address them, but not now. The administration would rather pretend we can get generous government-sponsored coverage for everyone without higher taxes, higher insurance premiums or rationing of health care. In short, it refuses to treat us like grownups. I wonder why.

COPYRIGHT 2009 CREATORS SYNDICATE, INC.

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  • Mike in PA||

    From watching the talking heads this weekend, the administration seems to think that they will be able to drive down costs by having the government "compete".

    They say competition is a good thing, and if the government has the lowest cost, then other insurers will have to lower their rates in order to compete with the government.

    What a bunch of crap! Nothing increases demand like giving something away for free! That means the overall costs will go up - not down.

    They're believing their own fantasies.

  • mike farmer||

    And, foremost, government is unwilling to get completely out of healthcare, quit tinkering with it, and allow the market to work it out. When was the last time government was completely uninvolved healthcare? What was the state of healthcare. I'm just wondering. It might be that the original causes of the present effects are so far removed in time, we can't see the fundamental problem, so we continue to allow government to apply symptomatic solutions.

  • ||

    It might be that the original causes of the present effects are so far removed in time, we can't see the fundamental problem, so we continue to allow government to apply symptomatic solutions.

    Iatrogenesis, perhaps?

  • ||

    "From watching the talking heads this weekend, the administration seems to think that they will be able to drive down costs by having the government "compete"."

    I never watch those shows but that is astounding Mike. Do these clowns think that the insurance companies and hospitals are charghing high prices because they can? That insurance companies refuse to lower prices and corner the market just because? It is really scary that people could be that stupid.

  • ||

    Hey Art. I missed you on the other thread yesterday about Quayle. But I just wanted to tell you to fuck off.

  • Naga Sadow||

    WTF? I'm gone for a month and John turns into joe? What the hell have you people been up to in my absence!?!?

    *taps foot waiting on an explanation*

  • ||

    No Naga,

    I shouldn't turn into Joe. You are right ART is not worth the effort.

  • Gilbert Martin||

    "Of those who could accept higher taxes to finance a new system, most are thinking of higher taxes on someone else. As the researchers explained, "The only options with majority support were those likely to impact the fewest people, in particular smokers and the wealthy."

    And that mindset is the result of decades of liberal democrats fostering an "entitlement"
    mentality to advance their own power.

    Ever larger percentages of the population succumb to the notion that they are entitled to something for nothing. They should get some sort of increased benefit and somebody else should pay for it.

  • Naga Sadow||

    Anyway, back on topic. I honestly think any macroeconomic look at healthcare is going to be fraught with inaccurate statements and data. I am certain ,however, that having 300 million Americans no longer having to weigh the cost of a doctor's visit or hospital stay is going to be very, very, interesting.

  • ||

    Hey Art. I missed you on the other thread yesterday about Quayle. But I just wanted to tell you to fuck off.

    Lighten up, Francis.

  • MNG||

    Who could hate Art P.O.G.? WTF?

  • MNG||

    "Ever larger percentages of the population succumb to the notion that they are entitled to something for nothing."

    I know, I know, tell me about it! I mean, there's this poster with the handle Gilbert Martin who thinks his posts are entitled to the respect one would give a rabid baboon locked in a basement with internet access without him demonstrating he is worth such respect at all!

  • ||

    Sweet! Specific-attack-by-name thread!

  • Gilbert Martin||

    MNG, I have already told you that you are physically incapable of ever proving anything.

    And therefore you aren't.

  • Naga Sadow||

    MNG,

    You forgot to post at the bottom:

    Any replies to this post will most likely consist of ad hominems, etc.

    At the very least you could have asked a question and posted it here.

  • MNG||

    "MNG, I have already told you that you are physically incapable of ever proving anything."

    I know, I know, I've already laughed all I can at that...

    Naga
    Maybe we should all use this brilliant all-purpose disclaimer at the end of every post?

  • Naga Sadow||

    Don't be silly, MNG. That fad has run its course. As Xeones has stated, we must keep it fresh like tupperware.

  • ||

    Yeah, honestly I've said stuff to Tony and even JB that I regretted a little bit, but damn, I've never gotten a reaction like I've gotten from John.

    Heh.

  • ||

    Worries about people trying to take advantage of all that "free" health care always seem overstated to me. The reality is most people don't like seeing the doctor. I can see people abusing low-cost prescription medicine, but who in their right mind is going to want to run off to a hospital because it's free? And if we do see a spike in hospital visits, we'll see a spike in mortality rates because even today hospitals are very dangerous places to be - your chance of getting a septic infection in a hospital, or being inadvertently killed by an exhausted resident, is pretty high. That will only get worse under a state managed health care system, but more premature deaths should bring down costs. We also need to encourage people to smoke again.

  • Xeones||

    According to President Obama, "the stars may be aligned here."

    Barry, they are in perfect alignment for you to shut the fuck up.

    Also, John: you're going after Art? Really? Has your schtick finally jumped the shark, or is it just that time of the month?

    P.S. In case anyone replies to this, their responses will almost assuredly be ad homs delivered through sockpuppets, thereby conceding my points and showing the cowardly, childish, anti-intellectual nature of libertarians. Yo, Naga, up yours.

  • Naga Sadow||

    Xeones,

    Being a partison shill cause a loss of a sense of humor. Or so I'm told. That's why he's going after Art. Oh, and it NEVER jumps the shark my friend.

  • Naga Sadow||

    That does it! I'm going to start spamming Welch until there is a preview button!

  • ||

    I'd make Hugh Laurie Surgeon General. Why not? He plays a great doctor and his dad was a physician.

  • Naga Sadow||

    Pro Lib,

    Then why not NPH? Neil Patrick Harris.

  • Xeones||

    Naga, it may be that partisan schtickery is already located on the far side of the shark, and thus jumping would be redundant.

  • Naga Sadow||

    Xeones,

    Sorry but "INTERNETZ FLAME WARS!!!" are always entertaining.

  • ||

    I'd make Hugh Laurie Surgeon General.

    Apparently he was in the Kate Bush video "Experiment IV", too. And anybody who's down with Kate Bush has to garner serious consideration for the job.

  • Xeones||

    Oh, i agree, Naga. In this context a jumped shark (or nuked fridge) can actually be a good thing, because it's like a giant beacon flashing FLAME WAR COMING YOU GUYS L@@K.

  • ||

    Sorry but "INTERNETZ FLAME WARS!!!" are always entertaining.

    Really? Maybe I should go full "internet tuff guy" and challenge John to a fistfight in an abandoned parking lot.

  • Xeones||

    Maybe I should go full "internet tuff guy" and challenge John to a fistfight in an abandoned parking lot.

    And then, regardless of how he responds, call him a coward, claim victory, and brag about how you "pwned" him.

  • Mike M.||

    According to President Obama, "the stars may be aligned here."

    Obama believes in astrology like Nancy Reagan?

  • Naga Sadow||

    That worked for Joe aka the self described "thread winna".

  • Xeones||

    That worked for Joe aka the self described "thread winna".

    That fucking guy. Exactly who i had in mind, dude.

    joe Boyle, Tuffest Tuff Dude and Pwner of the Internetz!
    Chris Kelly, Public Intellectual and Scourge of Corruption!

    Hit'n'Run: Where We Have All Been Touched By Greatness (in the bad place).

  • ||

    When Neil Patrick Harris is on Black Adder, then he can be Surgeon General.

  • Naga Sadow||

    Ah, good times.

    *sips margarita with tiny umbrella*

  • Naga Sadow||

    Pro Lib,

    This sounds like age discrimination. I find it unbecoming of you, sir.

  • Xeones||

    Oh man, i almost forgot-

    Eric Donderooooooooo, Libertarian Prime!

  • ||

    No, it's talent discrimination. Still legal in ten states.

  • Naga Sadow||

    Sure. Kid doctor! A kid! He was able to play a role far beyond his years and I'm sickened by your dismal of his obvious talent.

  • ||

    No, I think his talent is dismal.

    Actually, I can't say that since he's part of the Whedon clan, now. Still, Laurie is superior. And his character is handicapped. And a drug addict.

  • ||

    Hit'n'Run: Where We Have All Been Touched By Greatness (in the bad place).

    Ooh, I see this becoming the subheading on H n' R.

  • ||

    John,

    You are tim'rous and afeared of fisticuffs, sirrah!

  • ||

    Yes, Art, iatrogenesis. We should keep that in muind whenever one makes the normative statement, "we have the best doctors, the best hospitals and the best health care in the world."

    Imo, a lot of people reflexively spout such things without taking into account the hundreds of thousands of deaths attributable to hospital and physician fuck-ups as well as the basic allopathic structure of medicine in the west, particularly these here united socialist states.

    I note that the Wiki article asserts that iatrogenesis includes deaths from CAM. Sure, the etymology supports this construction of the word. However, even the Wiki article itself supports the proposition that CAM is almost never to blame for iatrogenic deaths.

    Death by Medicine is a must read.

  • Walter Jameson||

    I wonder if the medical expenses for shiny-gold-ingot-from-the-sky injuries would outweigh the benefits.

  • Naga Sadow||

    Oh, wow . . . dismal? Damn we need a preview function.

    Pro Lib,

    Plot: "I have a god like knowledge of all things medical with a sadistic sense of humor."

    Done. Sorry but never watched but a few episodes. Sorta how I could never get into 24. You acknowledge the obvious greatness of this man or so help me I will go all "Internetz tuff gai" on you!

  • ||

    And his character is handicapped. And a drug addict.

    Not to mention certifiably insane. He's schizophrenic and delusional, so he would fit right in.

  • ||

    Yeah, a guy with three names compares with Hugh Laurie. Ha!

  • Xeones||

    Ooh, I see this becoming the subheading on H n' R.

    Just copy'n'paste it into the end of your posts. Before the disclaimer, of course.

    Hit'n'Run: Where We Have All Been Touched By Greatness (In the Bad Place)

    P.S. Any replies to this comment will most likely consist of ad homs, as libertarians concede my points and show their childish, anti-intellectual nature.

  • The Angry Optimist||

    Walter Jameson - assuming the ingot is about 17 oz, that would yield you, what, 15,800? So, in other words, probably not!

  • Abner MacGillicuddy||

    Anyone who seriously believes that Americans will ever accept the kind of rationing inherent in government run healthcare is just plain kidding himself. Even the best systems like France, Germany and Sweden rely on rationing to contain costs and they're also finding themselves extremely strained.

    If such a system were ever instituted here you could be guaranteed to see every minority group would screaming "discrimination", every white male loser would crying about "affirmative action" and preferential treatment of the darker pigmented and women and feminists complaining about the patriarchy ignoring "Womyns' health issues".

    Plus that the Christion Right will be claiming that the elderly are being euthanized and babies aborted all for the love of filthy lucre.

    No, Americans want it all and they want it right now and they're not going to sit around like docile Eurotrash (or Canadians) and accept what the ruling class has decided is best for them.

    And we're certainly not going to make any "sacrifices" for "the greater good" just because our betters tell us to.

    No sir, not us, not the rugged individualist descendents of the people who crossed the plains.

    P.S. Any replies to this comment will most likely consist of ad homs, as libertarians concede my points and show their childish, anti-intellectual nature.

  • Naga Sadow||

    Pro Lib! Ha! You've fallen for my trap! Not interesting enough? Dude's got three names. Three! Cannabalistic serial killers always have three names.

    "Hey. Anyone seen Emmanuel around lately? He went to have dinner with Secretary NPH and now he's missing? This is exactly what happened to Geithner and Paulson. Strange."

  • ||


    There are only three ways to pay for this expansion of health insurance coverage: increased taxes, reduced benefits, or shiny gold ingots falling out of the sky



    I thought when Obama said "the stars are aligned" he was referring to the third option.

  • Naga Sadow||

    Aresen,

    Relativistic projectile?

  • Walter Jameson||

    There are too many variables to consider though: the location and size of the storm, the weight of the ingots, and most importantly, the huge drop in the value of gold.

  • The Angry Optimist||

    yes. A storm of gold ingots would be much like overprinting fiat currency.

  • The Angry Optimist||

    excuse me, "fiat" currency, because everything has value by "fiat".

  • stuartl||

    ".... and most importantly, the huge drop in the value of gold."

    Nah, inflation always raises the price of gold, so as long as the govt keeps spending way beyond its means everything will work out.

    P.S. Any replies to this comment will most likely consist of ad homs, as libertarians concede my points and show their childish, anti-intellectual nature.

  • ||

    But we ALL need insurance to cover the extremely high cost for the treatment of injuries from unicorns.

  • Naga Sadow||

    Don't forget naked bear wrestling.

  • BakedPenguin||

    Sorta how I could never get into 24.



    Naga, I could never get into 24 because it always struck me as apologia for state-sponsored brutality.

    "OMG! If Jack Bauer doesn't rip off that guy's fingernails, Bayonne will get nuked!!!" Yeah, bullshit.

    Also, most people have three names, it's just that you don't start using all of them unless you're a psycho killer. I suspect that's because psycho killers grew up hearing their moms call them by all three names a lot. e.g., "John Wayne Gacy! You put that half-dead cat down right now!!"

    P.S. Any replies to this comment will most likely consist of ad homs, as libertarians concede my points and show their childish, anti-intellectual nature.

  • ||

    Naga, naked hairy gay fatties?

    NTTAWWT

  • Sean W. Malone||

    I am truly shocked that no one's hated on Chapman yet. Astounding.


    In a related question however - is there really, honestly, anyone in the US who actually believes that a completely socialist system will be cheaper?? I mean... The way I figure it, most people have to recognize that costs are going to skyrocket even further but since evil rich people are paying, who gives a shit.

  • The Angry Optimist||

    Sean Malone - come on now. It takes basic economics to get people to learn TANSTAAFL, for Galt's sake. Yes, they think it's free, because the "end user" at the hospital can just walk in sans wallet or checkbook.

  • ||

    is there really, honestly, anyone in the US who actually believes that a completely socialist system will be cheaper??

    Tens of millions apparently do, Sean. Occasionally, one will post here about how the government bureaucracy will be more efficient than the private insurance bureaucracies, how the government will suddenly start to squeeze all the waste, fraud and abuse out of the system, etc. etc.

    Socialized medicine can be cheaper, of course, as long as you ration the hell out of care, either by wait lists or by just not having the more expensive items available at all.

  • ||

    Who could hate Art P.O.G.? WTF?

    Well, he does have a giant chip on his shoulder. Apparently.

  • ||

    When I am offered free beer, I don't really give a shit who's paying for it. Just keep it cold and plentiful.

  • ||

    When I am offered free beer, I don't really give a shit who's paying for it. Just keep it cold and plentiful.

    Even when the guy paying for it has a gun to his head?

  • ||

    "Worries about people trying to take advantage of all that "free" health care always seem overstated to me. The reality is most people don't like seeing the doctor."

    I don't think this is really the worry- some people unnecessarily going to their primary care doctor for a cold or something isn't likely to be a signficant cost driver.

    What can drive up costs significantly is taking away any cost impact to the patient when the doctor prescribes expensive drugs, or orders tests. A patient who has to pay all or some of the costs is likely to question the doctor about the need, whether there is a cheaper alternative, etc. The doctor is less likely to recommend unnecessary or expensive treatments to a patient he knows will pay the bill. When the cost comes from the government, that incentive goes away. A simple example- I'm currently in the military and get absolutely free medical care including free prescriptions. I've received prescriptions and tests that I would never have if I had to pay for them- they might provide some marginal benefit, but I don't see the cost as justifying them (some prescription toothpaste with extra flouride for $20 for example)- the doctors I see even sometimes seem to go back and forth on whether to prescribe but always lean toward prescribing- but since they're free, I figure I'll take the benefit.

  • LarryA||

    Do these clowns think that the insurance companies and hospitals are charging high prices because they can? That insurance companies refuse to lower prices and corner the market just because? It is really scary that people could be that stupid.

    They either truly believe it, or they're saying what their constituents want to hear. I have several otherwise-intelligent friends who believe that if we could just get rid of the insurance companies and do away with the profit motive in medicine they would be able to purchase complete medical care for less than they spend on beauty shop appointments or haircuts.

    The reality is most people don't like seeing the doctor.

    The reality is most people say they don't like seeing the doctor. My wife included. But every time she gets a cold, off she goes for a prescription. And if a kid runs a fever, don't get in the way.

  • MNG||

    "Even when the guy paying for it has a gun to his head?"

    That's his problem, did you not see the part about the FREE BEER?

  • MNG||

    I don't know what "these people" think about insurance companies, but I've heard it said that since a great deal of health care costs goes into the administrative adventure to see exactly who is covered for what, which is pretty important to an insurance company, that this would go down under a single payer system.

    I've also heard it said that having one entity to bargain with will reduce prices (look at how Wal-Mart, with it's significant yet of course non-monopoly market share could get the prescriptions for so cheap for its consumers).

    I think I'd lose out under any reform because my insurance coverage is pretty generous, and I oppose it actually, so I'm just saying...

  • MNG||

    And it's also argued that, as is noted oddly here by libertarians now and again, that since nobody is just going to die for lacking the means to get treated, that our system which will not pay for more preventative stuff but covers the dying, penniless man might be more expensive than one where the dudes like that thought they could go in for the preventative care...That paying for that dude up front early in the game is cheaper than paying the great costs to treat his condition when it is not caught and becomes more grave...

  • ||

    MNG, reliably showing up with the claim that the government bureaucracy will be cheaper than the private one.

    Also, I would note that, while the state has the undoubted ability to grind prices down to nothing, it is also subject to political pressures not to do so. And of course, reducing prices will, sooner or later, result in reduced supply. Its almost like a law of nature or something.

    So-called "preventative care" is grossly over-rated as an engine of cost savings. Preventative care consists mostly of scads of expensive testing to try to get an early diagnosis. The savings generated by that kind of testing over large populations is speculative at best.

    The real savings don't come from preventative care, but from lifestyle changes. And don't think Our New Medical Masters don't know it.

  • The Angry Optimist||

    how many millions of dollars are even thrown at so-called "dying, penniless men"? This is a sector of the population I hear about all the time, but have yet to actually lay eyes on.

  • Seward||

    MNG,

    ...that this would go down under a single payer system.

    Actually, it could go up, way up. Medicare/medicaid in the U.S. is generally far more top heavy on the administrative cost side than are private insurers.

    I've also heard it said that having one entity to bargain with will reduce prices...

    That depends on whether the price mechanism is involved; with Wal-Mart it is, with the government it is historically not. One of the biggest problems with the way the government determines costs is that it does so via boards and bodies and imposes price controls too boot. This is why you see the government charging the same price for something which in the realm of private insurance changed ten to fifteen years before.

    ...that our system which will not pay for more preventative stuff but covers the dying, penniless man might be more expensive than one where the dudes like that thought they could go in for the preventative care...

    Health care coverage would be a lot cheaper if so many state and federal mandates were not required of coverage. So, one way to attack costs and get people in for preventive care would be reduce or eliminate mandates and let people decide what sort of coverage they want. Of course, one might also be just skeptical of the health insurance model we have and that we have a hard time breaking away from due to government mandates, incentives, etc. Because insurance seems to be a business model for relatively rare, catastrophic events, not for yearly physicals. So if we made saving for yearly physicals, minor burns, lacerations, etc. tax free, I think that would undercut the need for insurance as it exists today altogether.

  • Seward||

    MNG,

    Anyway, there are a lot of interesting and far more beneficial things the government could do to expand healthcare coverage, reduce costs, etc. that would have nothing to do with a single-payer system, and would be individual and market friendly as well.

    One thing this whole deal does reinforce to me though is this: keeping up my very healthy lifestyle so I don't have to deal with the healthcare system.

  • Seward||

    TAO,

    Most members of the uninsured population rarely need medical care; we're talking a very small portion of that population that does. And they could easily taken care of by some sort of private-public relief.

  • EscapedWestOfTheBigMuddy||

    I can't be the only one amused by the idea that they're going to find US$60,000,000,000 per year in Medicare and Medicaid that somehow no one else has noticed yet.

    Also by the idea of promising that Obamacare will be as good as Medicare as a selling point! Have the actually talked to anyone (patient or provider) who uses Medicare?

  • Seward||

    R.C. Dean,

    Being somewhat of a "health freak" I can tell you that unless you have a voluntary mind set to do it, well, it is basically impossible to get someone to run a lot of miles per week, adopt a caveman diet, etc.

  • Naga Sadow||

    TAO,

    I believe he means those poor souls who are in a nursing home. Since the government foots the bill for their care, they end up getting shuffled back and forth so the cost is run up on the governments tab. I can't confirm this but I've heard this from health care workers in the past.

  • Gilbert Martin||

    "I know, I know, I've already laughed all I can at that..."

    And I'm still laughing at you about it.

    You see MNG, your being physically incapable of proving anything has nothing to do with the nature of the issue being discussed.

    It has to do with the physical limitations of YOUR brain. You are a liberal. And that means that the brain inside your skull is actually no larger than a chick pea - with the remaining space filled up with pure shit.

    Consequently you are physically incapable of posessing the requisite cognitive capacity to ever prove anything.

  • JB||

    The stars may be aligned for Obama to rape America more.

    Fuck Obama, he is worse than Al Queda.

  • stuartl||

    I've also heard it said that having one entity to bargain with will reduce prices (look at how Wal-Mart, with it's significant yet of course non-monopoly market share could get the prescriptions for so cheap for its consumers).

    Are you seriously suggesting that the government can step in and play the role of a highly efficient private company competing against others in a free market? No rent seeking, no rules to protect the little guys, no political patronage?

  • MNG||

    "how many millions of dollars are even thrown at so-called "dying, penniless men"?"

    I'm thinking of those people that come into the emergency room with no insurance or money for some problem that may not have developed as badly if they had got some earlier care (which they could not afford either). As is pointed out on H&R the emergency rooms don't turn those people away, we get the bill...

  • MNG||

    "Actually, it could go up, way up. Medicare/medicaid in the U.S. is generally far more top heavy on the administrative cost side than are private insurers."

    I'm pretty sure our very own Kolohe demonstrated one day that this is not true. According to the numbers he supplied the administrative costs of the private insurers are higher, though they do catch more fraud.

    "And they could easily taken care of by some sort of private-public relief."

    That's gonna take some proving for me to accept!

  • MNG||

    "Consequently you are physically incapable of posessing the requisite cognitive capacity to ever prove anything."

    So my brain is small and useless like your penis?

  • ||

    "And they could easily taken care of by some sort of private-public relief."

    The argument is simply about the amount and source of said relief.

  • MNG||

    "Are you seriously suggesting that the government can step in and play the role of a highly efficient private company competing against others in a free market?"

    What Wal-Mart did had nothing to do with their being private. They basically said "look, a shitload of people get your drugs from our company, and if you want to still have that market you will offer your drugs for less" and the drug companies said "shit, we lose money if we offer our wares at that price, but we would lose out more to lose Wal-Mart business."

    If the government were the single insurer it would go to health care companies and say "this is what we are willing to pay for x." What are the health care companies going to do, go into farming?

  • ||

    mng, I gotta say it. The willingness of folks to argue, "you don't agree with my position=you aren't sharp enough to form a complete thought" is getting very old.

    no, I'm not talking about you.

  • The Angry Optimist||

    MNG - I know who you are thinking of, but I have yet to see decent numbers on how many of those people there are actually are. And, of course, I know we don't exist in a world where emergency rooms and, therefore, the government, are going to turn away dying people. I'm simply skeptical that the costs of those (probably in the thousands of) people warrant a single-payer for millions of others.

  • ||

    brotherben,

    There's a mote-beam-eye component to all this that you seem to be eliding. (And I don't mean on your part.)

  • MNG||

    TAO
    I don't know about that myself.

    There's a logic to that argument, but I'm unaware of any empirical evidence and too lazy to look it up (like I said, I hope reform fails, both Obama type reform [I can't imagine a government plan being anything but worse than the one I have through my job] and libertarian reform [getting rid of the deduction for job-based health coverage, see my bitch about Obama type reform]).

    I will say that the last time I was in an emergency room the place seemed about half full of poor, crazy people...

  • Sean W. Malone||

    All this nonsense is the same Keynesian line of reasoning that assumes that government money is just as good as private money. Apparently, it's just too difficult to recognize the differences between the two, how they operate and what incentives are in play.


    Wal-Mart, Government... Same basic idea right? There's no difference in having to compete for market share voluntarily versus being able to obtain all of your "revenue" through force. And of course, the incentives CEOs & managers have to promote efficiency, and drive down costs in order to increase the profits distributed to their share-holders are identical to the incentives that politicians have to their constituents and lobbyists, right?

    Perhaps if I could only shut off my think-box, I'd stop seeing those things as a little different...


    MNG: You may also want to note that a great deal of the cost of Medicaid/care's administrative paperwork & legal costs are pushed on private doctors offices & hospitals - thus the hiring of extra staff just to do paperwork. One of the many "cost-saving" mechanisms employed by government... by which I mean, essentially, creative accounting practices which obfuscate the real costs involved.

  • MNG||

    Sean
    My point is that Wal-Mart could command better prices because of the size of the business they do with the drug companies. That's not economic rocket science, consumers in bulk and regular consumers often can command better prices.

    What's bigger, bulkier and regular than the government representing all consumers?

  • MNG||

    "the incentives CEOs & managers have to promote efficiency, and drive down costs in order to increase the profits distributed to their share-holders are identical to the incentives that politicians have to their constituents and lobbyists, right?"

    Actually, I am often surprised to find out how insulated CEO's and such can be from that type of thing, running companies in the ground while collecting bonuses...There is a whole principal-agent problem in the corporate world that seems to provide more protection for management from the holders than you might imagine...And on the flip side I think libertarians discount how accountable politicians can be to citizens for performance...

  • ||

    tao, the part of the conversation that interests me is this. An unknown percentage of the uninsured are that way because of poor decision making concerning education and child bearing. What is the responsibility of society to help them be less of a drag on our economy?

  • The Angry Optimist||

    But the government is probably incapable of acting like a competitive market actor. That is, if the drug companies told Wal*Mart to take a hike, Wal*Mart could not have statutorily dealt with the drug companies and just changed the law to give itself a better deal.

  • ||

    I wonder what wal-mart is doing to make insurance cost effective for all their employees.

  • MNG||

    But TAO, that would seem to only strengthen the government's hand in getting a better price, right?

  • ||

    According to the numbers he supplied the administrative costs of the private insurers are higher, though they do catch more fraud.

    Not sure what he supplied, but this is the best comparison I have seen.

    It concludes that the difference in "hard" administrative costs favors the government slightly. It also notes that it did not take into account the "cost of capital" for the government (that is, what it costs the government to collect the taxes/borrow the money that it spends on healthcare). And, of course, the government loads cost onto the private sector through mandates and regulations.

    What's bigger, bulkier and regular than the government representing all consumers?

    MNG, I find your notion that the government represents consumers to be touchingly naive. The government represents itself, first and foremost, and secondarily those interests that it depends on to maintain power. Consumers have not been notable as such an interest.

  • MNG||

    "I wonder what wal-mart is doing to make insurance cost effective for all their employees."

    Remember one reform that is often thrown out there is to let small firms pool together to buy insurance. The logic being that the bigger the firm, the more people being insured, the cheaper per person price can be demanded (any Sams Club shopper knows this: you can buy in bulk for cheaper prices).

    A single payer plan would create one big ass firm...

  • Gilbert Martin||

    "So my brain is small and useless like your penis?"

    You are partially correct.

    Your brain is small and useless.

  • The Angry Optimist||

    Uh, yeah, that's kind of my point. Is it in any fashion just or fair to say that the government can act as a market actor, but when acting in that fashion, the government is dissatisfied with the result, it can short-circuit the market?

    It's a matter of killing the Golden Goose. It might not be the case that Merck or Pfizer will go out of business tomorrow, but the government, using force, will not only mess up incentives and interfere with R&D, they will eventually make those companies arms of the government, and then you have the DMV version of Pfizer.

    I'm not happy with the way the health system is, but I want it to stay that way anyway.

  • MNG||

    Well RC, I only mean representing everyone in the way that Wal-Mart represented all of their customers, or employees...

  • The Angry Optimist||

    MNG - follow that logic. Why not, then, just have one "big government firm" that can negotiate lower housing prices? Food prices? Car prices?

    if the markets function in these areas, I don't see the justification for making the Government the Lone Big Firm.

  • MNG||

    TAO
    Well, that's two different things. One: should the government insure everyone and use their market power to demand lower prices for services. Two: Should the government simply legislate the lower prices.

  • Gilbert Martin||

    Of course the federal government has no legitmate Constitutional authority to establish any mandatory participation medical system to begin with.

    Just as it had no legitimate authority to create Social Security, Medicare, Medicaid or SCHIP.

  • The Angry Optimist||

    I'm saying that [1] is going to lead to [2], MNG. It's bound to happen.

  • MNG||

    Well TAO, I'm sure many proponents of single payer would not mind that at all!

    But I would hope some would have a more nuanced reply, like that the markets for health care are different in important respects than the ones for cars (maybe in an economic sense [more inelastic] or moral sense).

    But, let me get an answer from you: isn't it true that the more of something you buy usually the cheaper the price you can get for it?

  • MNG||

    Honestly TAO I think with 1 being true there would be little need for 2....

  • Sean W. Malone||

    *Smacks forehead*


    I just got done pointing out that you are comparing two completely different things... And yet, here you are arguing again that Wal-Mart & Government are somehow equivalent entities. That's absurd...


    And explain to me how, in a world where we have former KKK members, possible murderers, bloated cronies, Ted Stevens and other pork-kings, the horrendously unpopular Iraq War, Patriot Act, Homeland Security Department, the bailouts of banks, bailouts/nationalization of auto manufacturers and a completely unaccountable congress & Federal Reserve..... that you think politicians are somehow accountable to anyone, much less their immediate constituents.

    Politicians succeed in retaining their offices by giving people stuff - which they first have to take from other people! So the incentives for politicians are not to anything but their own re-election regardless of how much additional cost that imposes on society or how many people they need to conscript into whatever christmas present they want to give to their special friends & whatever scraps they want to throw to their constituencies....

    This is not economic rocket science MNG.


    And by all means, please explain to me how CEOs across the board are insulated from abject failure. Try to do it with more than anecdotes of AIG - and double bonus points for an explanation that doesn't involve politicians giving out favors of cash, tariffs, special-protections & other goodies to the "CEOs" in question.

    As for bulk purchasing, that argument ONLY applies if there is a free-price mechanism in place. With government we can be virtually guaranteed that there isn't and won't be one. So, that fails to convince.

  • MNG||

    "Of course the federal government has no legitmate Constitutional authority to establish any mandatory participation medical system to begin with."

    But can you PHYSICALLY prove that, my small penised friend?

  • The Angry Optimist||

    Yes. I'm going to rush to add that that does not in any way imply that the Government should use taxpayer dollars to pay for drugs.

  • Gilbert Martin||

    "But can you PHYSICALLY prove that"

    Absolutely.

    The 10th Amendment physically exists on the document known as the Constitution.

  • The Angry Optimist||

    Honestly TAO I think with 1 being true there would be little need for 2....



    Let's concretize this.

    Abbot Labs sells AIDS therapy drugs for say, 200 dollars a dose. So, here comes the government, which, through statute, now represents poor people who have AIDS. The government says "we're only going to pay 100 dollars per dose for Kaletra". Abbott Labs says "No". Now what do you think is going to happen?

  • MNG||

    Sean
    You don't much about the current debates in corporate law about the power management has relative to the shareholders do you? Without threadjacking here it has to do in part with the problem that management has, as an empirical matter, a huge influence over who will serve on the Board. And this is why you see so many "anecdotal" (aftera while that is what we call a "pattern") examples of CEO's running a company into the ground but getting bonuses or not punished in any way...

    But more to the point: if what is critical in my analogy is the bigness of the entity (meaning that it represents a huge share of the potential market) in bargaining for price, what in your mind about the government would cncel this out?

  • Gilbert Martin||

    You cannot create a new entitlement and give more people stuff and have it cost less money.

    Obama's claim that his plan will cut health care costs is total BS.

    The government cannot deal with the entitlement programs it has already created, primarily Medicare, and it won't be solving anything by creating another one.

  • Sean W. Malone||

    Oooh TAO!! I know!

    Government says: "Too F*ing bad Abbot Labs, we're only paying $100 per dose anyway! Screw you."

  • MNG||

    Gilbert, I imagine the "physical" parts of the document the government uses to do all that stuff are the Spending and Interstate Commerce Clauses...

  • Sean W. Malone||

    Also, in a PR announcement government makes it clear that Abbott Labs hates people with AIDS and is an evil, profit-seeking corporation... Politicians, however, are helping the little guy out.

  • MNG||

    TAO
    Really, if the choice the health care or drug company has is to accept the governmental price or sell none of their wares, I imagine they will find ways to meet much lower prices than currently exist...Monopolies have a lot of pull...

    Of course were the government to demand an asburd price they would be foolish. Demanding a price that would ensure there were no drug makers or health care companies would be stupid folly.

  • Seward||

    MNG,

    Even if true, there is to consider:

    As discussed in detail below, it clearly is true that the administrative or non-benefit costs reported in the Medicare budget and other parts of the federal budget are lower than the measure of administrative costs used in this study for private health insurance. At the same time, we find the administrative costs of Medicare to be about twice as large as a proportion of total Medicare outlays as commonly asserted, because the administrative costs reported in the Medicare budget do not include the costs of other federal government administrative functions reported in other parts of the federal budget, for which it is reasonable to allocate some share to Medicare.

    The piece is well worth reading, BTW.

    That's gonna take some proving for me to accept!

    System wide solutions are not required when you don't have system wide problems; if the issue really is the small portion of the population which is both uninsured and unable to adequately access health care then the solution concerns that group of people.

    What's bigger, bulkier and regular than the government representing all consumers?

    Because governments don't do that. They don't represent all consumers; they represent discrete individuals and groups. Public choice, interest group theory, etc. have spent decades demonstrating that.

    This is fundamentally different from what Wal-Mart does.

  • Sean W. Malone||

    You don't much about the current debates in corporate law about the power management has relative to the shareholders do you?



    MNG, you still seem to be oblivious as to HOW and WHY that shit happened in the first place.


    Anyway, again... Size of entity doing the purchasing doesn't matter unless the system is voluntary and operating with price-freedom. You're still trying to equate things that are fundamentally different... But apparently you don't seem to get that one involves force & guns and the other is inherently barred from the use of force. Why doesn't that enter into your mind at all?

  • ||

    Just exactly how are drugs cheaper in Canada? if in fact they are

  • The Angry Optimist||

    But, MNG, there's nothing precluding Abbott Labs from continuing to sell its wares to private parties, is there? Are you going to outlaw private dealings to effect a public health scheme? I think you're going to have to, because if Abbott Labs can keep making a profit on its pills even though it forgoes government largesse, now the government either has to raise its offered price (HA!) or just take the pills/outlaw private dealings.

  • Gilbert Martin||

    "Gilbert, I imagine the "physical" parts of the document the government uses to do all that stuff are the Spending and Interstate Commerce Clauses...

    Not a single word of either one authorizes the creation of a mandatory participation national health care plan.

  • MNG||

    I remember reading how Wal-Mart gets such low prices. They go to someone like Vlasic Pickles and say "How much do you want for those pickles?" And Vlasic says "Our price is two dollars a jar." And Wal-Mart says "Fuck that, we want to sell them for less than that. We will give you $1.30 a jar." Vlasic "Shit, that really cuts into our profits!" Wal-Mart "Well, if you want us to keep buying a bazillion jars a year from you to sell out our gazillion stores, then that's the price."

    Remarkably, these companies end up selling for less and Wal-Mart's aisles are not barren...

  • Seward||

    MNG,

    Demanding a price that would ensure there were no drug makers or health care companies would be stupid folly.

    And yet the U.S. government has done this on many occasions. The history of the railroad industry is a perfect example of this.

  • Sean W. Malone||

    "Really, if the choice the health care or drug company has is to accept the governmental price or sell none of their wares, I imagine they will find ways to meet much lower prices than currently exist...Monopolies have a lot of pull..."




    I think that really says it all about MNG's position here, doesn't it? Could be made slightly better by being spoken by Joe Pesci or Marlon Brando... "Government's gonna make 'em an offer they can't refuse" eh? No... I mean... literally, if they refuse, they're dead.

    Oh, and if it's impossible to make a profit selling at $100 a dose... that's your fuckin' problem.

  • The Angry Optimist||

    The fundamental difference is that Wal*Mart does that at its own risk, with its own money. You are failing to see the difference between them and the government, who will raise taxes on our income to fund pills for other people.

    If Vlasic tells Wal*Mart to screw off, then Wal*Mart renegotiates. If negotiations fail, well, then they fail. When they fail with the Government, the Government will just statutorily declare it a "non-failure" and take the pills anyway, through price controls.

  • Seward||

    MNG,

    Wal-Mart got low prices primarily because of its very efficient distribution chain; basically it hired a bunch of folks out Silicon Valley to set it up. That is the "secret" of its success. Without it Wal-Mart would not be in the position that it is in.

  • MNG||

    The spending clause allows spending for the general welfare.

    The Interstate Commerce clause allows regulation of interstate commerce (which most health care transactions, under current understandings, are).

  • ||

    If the company said that a profit wasn't possible at $100 a dose, I suspect a congressional committee would ascertain the true cost per dose of that drug.

  • Seward||

    MNG,

    BTW, this is well known to anyone who knows squat about the history of the rise of big box retailers.

  • MNG||

    TAO
    If Vlasic tells Wal-Mart to fuck off they lose 40% of their total sales. And Pete's Pickels happily moves in to supply the pickles for Wal-Mart's price.

    Now, the government plan is going to be bigger than Wal-Mart (if it bans other plans then it will be a monopoly on health insurance, if not it will still get a shit load of people)

  • Sean W. Malone||

    Vlassic also sells pickles to HUNDREDS of different companies MNG, not just Wal-Mart. And of course, that is the constant pressure of the market to increase output efficiency, so that you can meet your buyer's demands (Wal-Mart wants cheaper pickles) and maintain profits...

    But. Government ISN'T the same thing (you idiot)! Wal-Mart can't pass a law or use taxes backed by guns to make Vlassic sell them cheaper stuff - at some point, if they offer too low a price, Vlassic will just say no, and Wal-Mart has to move on... everyone loses. If government asks for a price that is too low, Vlassic says no, and gets slapped with price controls. Vlassic loses.

    WHAT is so damned hard to understand about voluntary transactions vs. involuntary ones?

  • Seward||

    brotherben,

    Well, there is no such thing as "true cost." What something costs is subjective.

  • MNG||

    Oh Bullshit Seward. Wal-Mart demands, and gets, its wares from the makers of the wares for less than most competitors and then turns around and offers them for less. That's a huge part of it.

  • Sean W. Malone||

    And MNG, when Vlassic loses, then Pete's Pickles loses, and there becomes a clear pattern that anyone who even thinks about supplying anything to the government monopoly is a chump looking to lose his shirt in the "deal"?

    Then what? We have a monopoly provider of X service with no one able to supply that provider with goods. Who loses...

    Think about it. I'll play the Jeopardy theme in my mind.

  • A T||

    Why pick France and Sweden as good examples? There are plenty of countries with socialized medicine with very poor performance.

  • ||

    So, Pfizer can't say how much it costs per dose to produce Viagra? How do they stay afloat?

  • MNG||

    "Vlassic also sells pickles to HUNDREDS of different companies MNG, not just Wal-Mart."

    Of course, that makes my point stronger, you see? Wal-Mart may only account for 25% of Vlasics total sales, but it can ill afford to lose such a chunk of sales, and so will strive mightily to reach Wal-Mart's demanded price...

    Under a reform plan the government would represent either a huge chunk of ALL of the market for health care and drug companies. They would strive mightily to meet demanded prices, otherwise they would either lose a huge chunk of business or have to eat their stethoscopes...

  • Seward||

    Also, just to point out the obvious:

    Wal-Mart is not a monopoly. It has numerous competitors, from companies as diverse as REI, Target, Bed, Bath & Beyond, Home Depot, Rite-Aid, etc.

  • Gilbert Martin||

    "The spending clause allows spending for the general welfare."

    Mandatory wealth transfers between individual citizens isn't "general welfare"

    "The Interstate Commerce clause allows regulation of interstate commerce (which most health care transactions, under current understandings, are)."

    Wrong - simply wrong.

  • ||

    I saw a program on the TEEVEE recently that made me fond of Taiwan's system of health care.

  • The Angry Optimist||

    brotherben - remember that the first pill costs 200 million dollars, and the second one costs two cents. Pfizer knows the marginal costs of making a pill, but it is attempting to recoup R&D expenditures through pricing each of those at a high markup.

  • Sean W. Malone||

    So let me get this straight... you are seriously advocating for a monopoly to step in - a complete monopoly of government no less, backed by laws & the whole shebang... and you think that that will cause prices to go down.

    Yes?

  • The Angry Optimist||

    They would strive mightily to meet demanded prices, otherwise they would either lose a huge chunk of business or have to eat their stethoscopes...



    Why would they do that? What are the incentives for a politician to pay the demand price when he can just arbitrarily change the price via statute?

  • MNG||

    "And MNG, when Vlassic loses, then Pete's Pickles loses, and there becomes a clear pattern that anyone who even thinks about supplying anything to the government monopoly is a chump looking to lose his shirt in the "deal"?"

    Haha, this is why the shelves in Wal-Mart are bare, eh?

    Companies LINE UP and BEG to get raped by Wal-Mart, because they would LOVE to have someone contract to buy a gazillion of what they are selling, even at Wal-Mart's lower than usual offered price.

    They would do the same for anyone with that much market share.

    And you can figure out the rest of where I'm going, right?

  • Gilbert Martin||

    "Under a reform plan the government would represent either a huge chunk of ALL of the market for health care and drug companies. They would strive mightily to meet demanded prices, otherwise they would either lose a huge chunk of business or have to eat their stethoscopes..."

    Or - they could effectivly drive people out of the public health plan back to private ones. If the drug companies refuse to do business with the public health plan that means the public health plan won't actually have any goods to deliver to it's customers.

  • Seward||

    MNG,

    Bullshit right back at you. Wal-Mart's success is based on its distribution network.

  • MNG||

    Gilbert Smallpenis:
    Spending aimed at improving the quality and access of health care to the public at large does not involve "the general welfare"?

    Ohhhhhkkkkkaaaayyyy....

    And as to second "argument", which has the complexity and thoughtfulness your arguments usually possess, let me respond: "No, I'm right."

  • ||

    TAO, granted. Pfizer obviously has to make a profit for the finished product, covering all costs relating to that product. The argumant between the haves and the have-nots is about the size of the profit.

  • MNG||

    Yeah Seward, Wal-Mart's success has nothing to do with the lower prices it offers.

    And those have nothing to do with the fact that they purchase the products they sell at low prices.

    Incredible.

  • Seward||

    MNG,

    Companies LINE UP and BEG to get raped by Wal-Mart...

    ...because they would LOVE to have someone contract to buy a gazillion of what they are selling, even at Wal-Mart's lower than usual offered price.

    The two clauses of this sentence conflict with one another. You aren't getting raped if you making it up on volume or one of your products is a loss leader while others of yours are not.

  • Observation||

    You guys realize that you arguing with someone who has repeatedly demonstrated on this very thread he doesn't (or perhaps cannot) grasp the difference between market share, monopoly, and extortion, right? Just like how secured and unsecured credit never really sunk in on the UAW threads.

  • Sean W. Malone||

    Vlassic wouldn't beg to be "raped" by anyone at a complete loss, and if they did, it wouldn't matter as they would quickly go out of business.

    Good fucking lord man, you still can't recognize a difference in Wal-Mart, which is a market participant, and government, which isn't. Government doesnt have "market-share", it has guns, laws & the power to destroy anyone who doesn't agree to their terms. If the deal wal-mart offers vlassic is so bad they have to duck out (which seems like a pretty terrible compromise on both ends if that would happen), there are other pickle suppliers and other retailers. VOLUNTARY transactions can happen until prices are arrived at mutually. A government writing a law that says the price will be X and fuck you if you can't produce the product for less than X is a different issue entirely!

    Then Vlassic is out of business in a few months, then Pete's, then Bob's, then whoever the hell else is conscripted into doing this shit... Then, guess what, there are no pickles at all.

    And in case you aren't clear the analog - Pickles = Cancer Treatment, Flu Vaccines, Asprin... Etc.

  • The Angry Optimist||

    Again, what are the incentives for Congress to pay the demand price when they can just change the demand price anytime they want?

  • MNG||

    I started this by noting the well-publicized action Wal-Mart took to get really cheap prescriptions for its customers (Reason reported on it btw). They just demanded a lower price from the drug companies.

    So that had to do with its distribution network Seward?

    Not one of your better arguments Seward...

  • Sean W. Malone||

    Yeah, you're right, "Observation"... Ugh.

  • The Angry Optimist||

    Poster "Observation" has a point. Incredibly, MNG seems incapable of seeing the difference between market actors and the Government's powers in these things.

  • MNG||

    TAO
    No, no, you first. I've asked more than once now.

    Normally, is it not true that the more you buy of something you can get it for cheaper.

  • Sean W. Malone||

    MNG, I don't think Seward was saying that Wal-Mart doesn't get better deals on wholesale than other companies, but it's the supply chain that allowed it to grow as it has... Nice red herring though.

  • The Angry Optimist||

    MNG - I already said "Yes" to that question upthread. And then I asked you "Why not have the government buy massive amounts of food! It'll be MAGICALLY CHEAPER THEN!"

  • MNG||

    Seward
    Well, of course.

    But that's my point.

    The companies will meet the government's price, and they will be happy they (and not someone else) got the contract.

  • Seward||

    MNG,

    It has low prices because its distribution network, which includes where it puts its stores, as well as all the tracking technology, etc. associated with this firm's business, all of which drive down prices. Compare its strategy with other companies and see which ones are successful and which ones or not; it is all about the distribution networks. That's what was so cool about the 1990s when it came to retail development.

  • MNG||

    TAO
    Well, as I said, the first kind of makes the second unnecessary.

    But also, demanding too low of a price would in fact kill the goose you are talking of.

  • MNG||

    Jesus Christ Seward.

    The pharmacy thing I'm talking about, where Wal-Mart got and sells its drugs for so much cheaper, had nothing to do with its distribution network and everything to do with the amount of business it represented to the other parties...

  • Gilbert Martin||

    "Spending aimed at improving the quality and access of health care to the public at large does not involve "the general welfare"?"

    Spending of any sort aimed at deliberatly making one citizen pay for some benefit provided to another isn't "general welfare".

    There is no benefit provided to the people on the paying end of the equation.

  • The Angry Optimist||

    Do you really believe that say, Barbara Boxer, is going to sit down and think "hmm, if we press too hard on this, we'll drive Pfizer out of the country. We have to determine a good price so Pfizer doesn't leave." Or is she going to give out press releases that state that greedy Pfizer is asking "too much" money and Sen. Boxer is "heroically battling" those who would put "profits over our nation's health."

    Come ON, dude.

  • Sean W. Malone||

    "The companies will meet the government's price, and they will be happy they (and not someone else) got the contract."




    Except, you know, when they realize that the government's "price" keeps going lower than their costs to produce the goods and there's nothing they can do about it... I love how you see all this stuff as if Government has any kind of history or incentive to act like an actual market-participant as opposed to a dude with a very big stick who gets whatever he asks for through threat/use of force.

    Someday, I truly hope you understand the difference between passing a law that says, the price will be X, versus voluntary negotiations from which either party can back out.

  • ||

    The argument is simply that the government, while insuring tens of millions of people currently uninsured, will attract lower priced care by being such a huge player in the market. That in turn will push down prices on health services and coverage from private insurers.

  • MNG||

    Yeah, yeah, I don't know what a monopoly or a government is. Get over yourselves dudes.

    What would give the government this ability to demand lower prices that suppliers would be inclined to meet is the same thing Wal-Mart had in the prescription drug example I gave above: that it would represent a shit load of business.

    Now you can go on and on about "oh my God not a market actor" and such, but I fail to see how that same thing, that crucial thing, would not apply to both.

  • The Angry Optimist||

    brotherben - and how is the government insuring those uninsured? Is it using its own Government-Profits or something?

  • Seward||

    MNG,

    The companies will meet the government's price, and they will be happy they (and not someone else) got the contract.

    Or they will leave the country. Modern liberals always assume that the only game in town is the U.S.

    Sean W. Malone,

    Even if across the board it got better details from a wholesale perspective (which just is incredibly unlikely), without its distribution chain and strategy of store placement Wal-Mart would have failed. It is a pretty simple necessary and/or sufficient issue.

  • MNG||

    Thanks BB. Maybe I've been stating it wrong or something...

  • Sean W. Malone||

    MNG, governments have ALWAYS killed their golden geese!!! What don't you get about that!?

    That's how this works! TAO just said exactly what I wrote upthread... When Pfizer can't produce at the price set by government, it won't be Barbara Boxer going, "Well, our bad, I guess we can raise the price a little to compensate." It'll be her saying, "Pfizer is just the example of greedy corporate pharmaceutical producers who are making the poor suffer."

  • Sean W. Malone||

    (I agree with you entirely Seward... I'm just saying, it's a red herring to shift the focus to all that)

  • ||

    The argument is simply that the government, while insuring tens of millions of people currently uninsured, will attract lower priced care by being such a huge player in the market.

    Like how the Pentagon was able to strong-arm the $800 dollar hammer company into only charging them $400 per hammer?

  • ||

    TAO, yes I know. I am not quite that dense. I personally believe that in a country as wealthy as ours, everyone should have affordable health care. Provided by the government if necessary. Unfortunately, our government has a habit of really screwing this type of thing up.

  • The Angry Optimist||

    And now the government is creating incentives to cut profits, which could have been plowed back into (very expensive thanks to government) R&D procedures. So, in the interest of "insuring the uninsured", we're sacrificing future lifesaving, and possibly better and cheaper, drugs.

  • MNG||

    Yes, yes, TAO how are they paying for it.

    Look, I'm just trying to answer the bare question of how could this lead to lower costs. I realize you think that the government might get drunk and take another step further, or that it would be wrong to use my money to pay for Gilbert Martin's erectile dysfunction care, but I've been trying to explain how it could be thought to lower health care costs.

    In representing a huge chunk of the market they could bid prices down. I've said this a million times now.

  • Seward||

    Sean W. Malone,

    Governments kill their golden geese because governments are driven by serving various discrete interests.

  • The Angry Optimist||

    But are lower prices what's happening now? Ask anyone who bills Medicare...because Medicare doesn't pay very well, it's actually leading to higher prices.

  • EscapedWestOfTheBigMuddy||

    I started this by noting the well-publicized action Wal-Mart took to get really cheap prescriptions for its customers (Reason reported on it btw). They just demanded a lower price from the drug companies.

    So that had to do with its distribution network Seward?



    On Seward's behalf: Yup.

    Walmart's distribution network was more efficient than their competitor, so they could and did undercut them. That allowed Walmart to grow. That gave them the influence to say "Give us a better price or we'll replace you." to various supplies.

    To which the suppliers said one of

    * OK.
    * Hell no

    or more commonly:

    * Guarantee us enough volume, and we'll see what we can do.

    The negotiations happened. Without guns.

    Which is the only point that matters.

  • Seward||

    SugarFree,

    The last time I saw anything on it, the Pentagon could not account for roughly 1/2 of its spending. Or some awfully large share of its budget.

  • Seward||

    Escaped,

    Oh, if I could only be as succinct as you. :)

  • ||

    Suge, area 51 is a very expensive place to keep running. A fair chunk of the hammer and toilet seat money was secretly redirected there.

  • MNG||

    SugarFree has a good point.

    Look, as I said upthread I AM AGAINST THIS REFORM! I have great health care from my employer. I'm set. I have trouble not seeing the government making my health care coverage and access WORSE than it is (though I think they will make it better for a lot of people other than me).

    Mind you I think the often proposed libertarian reforms (like getting rid of the deduction for employer based health care) would be even worse on me.

    But I'm against this. Upthread someone asked how in the world anyone could see savings coming from these reforms. To me its pretty obvious how one could see that. BB said it best.

    Now, in practice, it strikes me the government often fucks things up, and it could likely be more like the Pentagon's hammer than Wal-Mart's prescription drugs, but the idea is the same as what drove the latter...

  • Sean W. Malone||

    Are the interests really that "discrete" Seward? ;) I seem to see an awful lot of those interests on national TV quite often. Obama's union buddies aren't that discrete.

  • MNG||

    Escaped West
    You admit that what gave them the power to do that was their SIZE.

    And under any government reform I've read about the government would be a BIG ASSED player in the market.

    And it wouldn't need a great distribution network to do that. They are big because they take so much tax money (TAO is right here, though irrelevant to my point imo).

  • EscapedWestOfTheBigMuddy||

    < sigh >

  • MNG||

    Wouldn't the discrete interests be just as big of fools to kill that goose as private actors would be in, say, overfishing property they own or liscense?

    It's interesting that many libertarians seem to think economic axioms on human behavior stop when a person works for the government.

  • Sean W. Malone||

    MNG, what's disappointing, I think - is that you're against it only because you think that it won't benefit you in the short term, and not because you;

    A. Realize that it's morally wrong to use force to take from some people and give it to others.
    B. Realize that the alternative is far worse in quality & cost of care.
    C. Recognize that government incentives will lead to far more corruption & expansion of an all-controlling state...
    D. All of the above



    Just to pick a few reasons to be against this... But no, you're against it just cause you're already getting a good deal, so why rock the boat. Noble.

  • MNG||

    Escaped
    I've sighed a few times during this discussion too. Let's see if you can "help me understand."

    Under these reforms, the government wouldn't represent a big chunk of the market?

    So how is that different than Wal-Mart getting a better deal because they represented a big chunk of the market?

  • Sean W. Malone||

    MNG... there's no way around this... you've reached the point where I must once again realize that you are a moron.


    Wouldn't the discrete interests be just as big of fools to kill that goose as private actors would be in, say, overfishing property they own or liscense?



    Please find us one example of this. Last I checked private farmed fish were doing quite well.

  • Sean W. Malone||

    GOVERNMENT IS NOT A MARKET ACTOR you fucking moron.

    END.

  • ||

    Suge, area 51 is a very expensive place to keep running. A fair chunk of the hammer and toilet seat money was secretly redirected there.

    That's true. An alien uses a toilet once, and you just gotta chuck that fucker out. And the little gray ones shit all the time. Like constantly.

  • MNG||

    "A. Realize that it's morally wrong to use force to take from some people and give it to others."

    I don't believe that, as TAO could tell you (for example, I think it entirely proper to take a cell phone from a man who refuses to give it to a woman who is standing over a friend who has just been hit by a bus and is begging for a phone to call 911). I'm all about utility, force ain't special one way or the other for me.

    "B. Realize that the alternative is far worse in quality & cost of care."

    It will be worse for some, and better for others. Surely you are not arguing that for the millions of people who have no insurance or means to care that it will be worse for them?

    "C. Recognize that government incentives will lead to far more corruption & expansion of an all-controlling state..."

    As I've said, we disagree about how different "government incentives" are from private actors. And as long as people can vote and run for office, I'm not worried about this leading to totalitarianism...

  • Sean W. Malone||

    Depressingly, my original question of whether or not anyone actually believed that socialist medicine would lower costs has been answered.

  • MNG||

    Sean
    What do you mean by market actor?

    All I'm talking about is that the government would be "buying" (paying for) services and products from various actors, just like Wal-mart buys (pays for) services and products.

  • MNG||

    Their shit may be like the ones in the Aliens films and eat right through the toilets.

    If you are the Army custodian that has to mop up that mess you think that special 500 toilet lid is worth every penny.

  • MNG||

    Sean
    You are kidding, right? You need one example of a private actor who, in their short term self-interest, doomed their long term interests?

    Really? You think that doesn't happen with some frequency? Do you remember Enron? Or the Peanut Butter seller? Or any private actor who, in trying to save a quick buck, engaged in actions with a high risk of destroying their enterprises?

  • ||

    well, geeeeez.
    I was suggesting that the super expensive hammer was actually an accounting coverup to fund area 51. I have no knowledge of the feces of aliens. The one in Species did have a real pretty mouth.

  • Sean W. Malone||

    Actual market participants don't get to arbitrarily set prices or wages, write laws, use force against their "competitors" and get what they want without offering anything in exchange.

    No one else has those powers. No one. If you cannot understand the fundamental differences - as you've shown you can't - then this whole thing is completely fucking pointless. It's just getting annoying.

  • Sean W. Malone||

    "You are kidding, right? You need one example of a private actor who, in their short term self-interest, doomed their long term interests?"

    That's not the scenario you posited.


    Regardless, another gem that you just don't seem to be able to grasp here is that when that happens in a private setting, the idiots who are responsible go out of business. When the government does that (as they do, ALL the goddamn time), they raise taxes.

  • Seward||

    Sean Malone,

    You know, during the first period of FDR's administration they tried to set up cartels in many industries; it proved to be disastrous (indeed, it is one of the reasons why unemployment remained so high during the 1930s).

  • MNG||

    "Actual market participants don't get to arbitrarily set prices or wages, write laws, use force against their "competitors" and get what they want without offering anything in exchange."

    Jesus Christ Sean, this is only relevant in opposing a reform that sets prices and forces them, I've been talking all along about a system which merely uses the size of its market share to bargain for lower prices!

    You, like TAO, may think it is inevitable given government powers and incentive to do this, but this is not what I am defending (and, btw, if it were inevitable in the way you guys argue then it would be just as likely to happen whether or not the reforms I am defending are in place or not; the government would always be in a position to just set maximum prices).

  • Sean W. Malone||

    Also - what I was noting above, was that over-fishing, etc. doesn't happen on private farms where people actually own the land & the fish. It's only (or typically, as I'm sure there are a few idiotic exceptions that are in the dustbin of history) where you have no property rights in play that these things become a real issue. Everyone with half a brain knows that running a fishery and killing more fish than you can expect to produce in a year is going to be the death of your business... Anyone without half a brain goes out of business.

  • Sean W. Malone||

    It's absolutely inevitable. Haven't you paid attention to ANY of recent history, much less the history of governments around the world? And you think that the accounting will even be honest?

    Not to mention the demand for the cheaper government services skyrocketing, quickly producing a monopoly of the very very bad kind...

  • MNG||

    "When the government does that..." they lose support, and often their jobs.

    That can be a pretty stiff incentive.

  • MNG||

    "Everyone with half a brain knows that running a fishery and killing more fish than you can expect to produce in a year is going to be the death of your business..."

    Everyone with half a brain knows that selling peanut butter which has been produced in unsanitary conditions will likely make your customers sick and damage your reputation and likely your business...

    And yet...

    Homo economicus is a bit less rational than you think Sean.

  • Seward||

    Sean W. Malone,

    Just a statement about aquaculture:

    Aquaculture doesn't have problems with overfishing; it has problems with diseases that kill off the current crop, etc. But the members of the industry have learned a lot about how to do it, which is why so much of it is now done offshore of in protected bays, etc. (obviously freshwater producers of catfish, etc. have different solutions).

  • EscapedWestOfTheBigMuddy||

    MNG,

    Walmart earned its big player position by being better at delivering the goods for cheep.

    The government "earns" its big player position by pointing guns at people. This being a civilized society, the guns are mostly kept out of sight, but they are there.

    The incentive structure for the people who run Walmart pushes them to continue to be better at delivering the goods for cheep. This is hard, but it is the only way to stay on top.

    The incentive structure for the people who run the government pushes them to keep having the guns, and bring in the votes. Getting votes by promising voters that other people will pay for what they want is easier than staying on the top of the business heap. So the government will attempt to "fix" things by stealing (tax increases, price controls, lots of ways to pretty it up, but stealing none-the-less).

    When that leads the productive to quit (or breaks them in the traces) creating empty shelves, out lords and masters will want to nationalize industries. Which they aren't good enough at running to actually compete, so they'll have to steal even more to keep their campaign promises.

    A death spiral into totalitarianism follows.

    Hugo Chavez's little utopia got a bump the last couple of years from the price of oil, and is going down this route even so. Lets not even speak of Zimbabme. The remaining cold war communist's have either adopted free(ish) market solutions or are living on the charity of those who have.

    Central planners are intrinsically less able than the Invisible Hand.

  • Seward||

    ...instead of in protected bays, etc.

  • MNG||

    OK, good, you don't like government because it uses force to get where its at.

    But note fellas: this has nothing to do with the economics of what I was defending. So the "OMG he doesn't understand economics" seems pretty stupid right now.

  • MNG||

    The economics that consumers who offer to buy in larger volume often get lower prices is simply sound.

    But instead of acknowledging that you guys went all "but OMG they won't stop there they will use guns to force lower prices and kill the goose."

    And then turned around and berated me for not getting the economics.

    Big balls there dudes, big ones...

  • The Angry Optimist||

    this is government creating a market, MNG, not acting within it.

  • Sean W. Malone||

    MNG, it has everything to do with the economics you're defending!

  • Seward||

    Anyway, the government isn't really going to force anyone to lower their prices. What they will do is favor a certain select group of the members of the industry, and those companies will prosper, and any shortfalls will be made up with taxes.

  • MNG||

    A bully walks into the grocery store.

    Me: I bet if that bully offers to buy all the potato chips at once he can bargain for a pretty stiff discount on the price per bag.
    You Guys: Shit you don't understand, bully's will just take things by force! It's their nature, they have every incentive to do so!

    I mean, WTF guys! Notice that second line of thinking has pretty much jackshit to do with the truth of the first one.

  • The Angry Optimist||

    Seward - isn't that a distinction without a difference? After all, that means nonfavored corporate actors are indirectly forced to lower their prices.

  • Gilbert Martin||

    "I'm all about utility, force ain't special one way or the other for me."

    "Utility" only relates as a tactic to determine the most effecient way to achieve a goal that has already been predetermined based on one's ideology, morality, desires, etc.

    There is no stand alone "utility" that can be invoked to prove some outcome you desire is superior.

  • Sean W. Malone||

    MNG, there is nothing about government involvement that is not force. It is inherently that, and it's not a question of it "going too far"... and your notion that people in government will lose their jobs if they make bad economic decisions is just too cute for words.

  • MNG||

    TAO
    You mean the government would be creating a market for health care services, drugs, etc?

    Huh?

  • Seward||

    MNG,

    The economics that consumers who offer to buy in larger volume often get lower prices is simply sound.

    Except that is not all that government is doing of course. If thats all the government was doing (ignoring for the time being distortions associated with the taxes taken to do that buying), then you would have a point. But since the government is not any sort of real market actor, it is doing more than that.

  • The Angry Optimist||

    MNG - yes, it would be, for those "uninsured" who weren't in the market previously.

    It would be as if the government said that it was going to guarantee me a house (I don't have one now) by negotiating with realtors and home-builders to lower the price to bring "affordable housing" to me. I wasn't in the market for a house previously, but now the government says that I am, and that the realtors need to deal with it.

  • MNG||

    Currently people buy health care services, drugs, etc. from other people.

    Some of them pay for this with their own money, or private insurance, some of them the government pays for.

    Under these reforms that I've read about, the third class will be larger.

    I'm not sure what you're getting at then...

  • Seward||

    TAO,

    Yeah, I suppose so.

  • Sean W. Malone||

    Let me fix your analogy.


    A bully walks into the grocery store:

    Scenario A
    He says: "I want you to give me all your candy bars for $0.10 a piece." *Waves stick*

    Clerk says: "Uhh... Ok...... just don't hit me with that stick."

    Scenario B
    He says: "I want you to give me all your candy bars for $0.10 a piece." *Waves stick*

    Clerk says: "I can't do that! I'll go out of business."

    *Bully hits clerk with stick*

    Clerk says: "Fine... ok... just quit hitting me!"

  • Sean W. Malone||

    Epilogue:

    Bully comes in every day and gets his obligatory cheap candy bars for one year... The clerk loses money the entire time. One day, the bully walks to the store and finds that the clerk has closed up shop. He went out of business and fled town.

  • ||

    TAO, in your house example, I would think the realtors would be lined up to sell houses to the houseless knowing that the buyer had government backing. They wouldn't give a flying fuck where that money came from.

  • MNG||

    The government decides to buy everyone who does not own a house a house.

    It goes to the realtors and home builders and says "we would like to buy a gazillion houses, but are not willing to pay more than x per house." The latter would jump like motherfuckers for that, even if the "x per house" were somewhat less than the current market price.

    So the government would be "creating" a market there?

  • MNG||

    Sean
    For the last time, I'm not talking about the government setting prices by fiat.

    I'm talking about them saying "hey, if you want the contract for all the medical services we are now willing to pay for, you will provide said services for x amount, take it or leave it."

  • The Angry Optimist||

    Yes, it is creating a market, because previously, I was not "in the market" for a house. Now I am (because of the artificial lowering of prices).

  • Seward||

    MNG,

    The only appropriate response of course is that they tried that in the Soviet Union and it was a complete failure.

    The latter would jump like motherfuckers for that...

    No, what would happen is certain politically connected homebuilders would gain the vast majority of the work and the rest of the home builders would have to stick it out for that small share that doesn't reach that select few or would have to find another trade.

  • MNG||

    Now, I know you don't like the way the government got the money it offered for those houses, but I have no doubt that it could bargain for a lower price based on the sheer number of houses it is willing to purchase...The costs per house would be lower.

    Someone asked me how in the world this could lead to lower costs. There you go.

  • Sean W. Malone||

    Force vs. Voluntary transactions have *EVERYTHING* to do with the economics of the situation in question.

    Note that in both scenarios, whether or not the force was directly used, or implied via stick-waving, the bully got his low price regardless of whether or not the cost was acceptable (absent threats) to the clerk. The STICK is what made the difference, not just the size of the bully. Some things cannot be made up for by volume, and no amount of volume makes up for a losing position over time... Taking a loss for a week in order to have a year of prosperity is one thing, but government consistently works by making people take a loss permanently, until they collapse... Like Boxer the horse in Animal Farm. Heh...


    And of course, if you're a corporation, you really can't play on the allegiances of people to country or patriotism... But that's another story.

  • MNG||

    TAO
    That's crazy. Bringing new people into a market does not create it, almost by definition...

    There were people buying and selling houses for certain prices before the government offer, during and after.

  • MNG||

    Sean
    Are you really saying there is no difference between Wal-Mart saying "if you want to provide health care for our gazillion employees you have to do it for lower prices" and Wal-Mart saying "we will hit you with a stick if you don't supply health care for our employees at this lower price?"

    Amazing.

  • Sean W. Malone||

    Governments never set prices by anything BUT fiat, MNG!


    Besides, what happens when the price they "offer" (again, the offer is in quotes because of the massive stick-waving that will be accompanying said offer) is below what any company can afford to provide and they walk away... Government has no incentive to negotiate up when they can simply pass a law that controls the price of said goods. We've done it in the US a half a dozen times, and most places around the world do it regularly - ALWAYS with catastrophic results.

  • Sean W. Malone||

    WTF?

    "Wal-Mart" doesn't have a stick to wave MNG. Government does. Get that through your little head already.

  • ||

    Seward, no argument here about favored players getting that gubmint money. I just have to figure out who they are and buy their stock while it's cheap. That's the nature of the greed and power driven form of inbred fucked up "capitalism" we have here. It's a time honored part of the business model. Some folks can make a little scratch from the side bets.

  • Seward||

    MNG,

    We're talking about the real world; how the real U.S. government works when it comes to what it purchases. How such a plan would work in reality in other words. What are you talking about?

  • MNG||

    Sean
    According to you the government will always have this tendency and incentive to just set the prices to what it wants. So what if it engages in the reform I'm talking about before hand? Don't you see how irrelevant what you are saying is?

  • Sean W. Malone||

    How could you have misunderstood what I wrote so pitifully?

    There's a huge difference between an entity (Wal-Mart) saying, "We'd like you to provide health care for all our employees at X cost, can you do that? No... Ok, how about this? Yes? Cool."


    And...

    Another entity (Government) saying, "We'd like you to provide health care for everyone we cover at Y cost, can you do that? No? Ok, well if you don't, we'll make your life a living hell of regulations & slap some price controls on your ass, followed by a stream of IRS audits and we'll be giving your competitor some special reductions in taxes and we'll launch a PR campaign against you for being greedy and evil... Oh... What's that, you can give us a lower price now? Cool, I knew you would make the right choice!"

  • MNG||

    Well I'm not talking about or defending a government stick waving program Sean, I'm talking about the government doing what Wal-Mart does. Nothing more.

    You're answer "OMG they won't stop there, they have no reason to and they never do" is, by its own terms, IRRELEVANT. They are just as likely and capable to set the price by fiat whether the reforms I'm talking about are being tried or not...

  • MNG||

    "Ok, well if you don't, we'll make your life a living hell of regulations & slap some price controls on your ass, followed by a stream of IRS audits..."

    Alright, see, stop, stop stop right there! No one here is advocating that. Who are you talking to? Talking to people who do not exist around you is a troubling sign...

  • Seward||

    MNG,

    They are just as likely and capable to set the price by fiat whether the reforms I'm talking about are being tried or not...

    Actually, if actual real world experience is any measure, they are likely to spend roughly a decade trying to figure out the "price" while a group of committees kicks around proposals to one another. If you want to see price stickiness in action all one has to do is look at government procurement, pricing, etc. procedures. By that time any information associated with the price will have been lost.

    Compare this to the market's price mechanism, which is rich with information.

  • The Angry Optimist||

    They are creating a market for houses that didn't previously exist, MNG, because, before, let's say that all houses bought and sold for a minimum of 50,000. That is, all goods called a "house" have a price of at least 50K. The government is now "creating a market" for houses below 50K, which didn't exist previously.

    It's the same thing. There was no market for houses at that rate, and there is no market for drugs for those, by definition, not in the market for drugs.

  • MNG||

    I'm talking about government doing exactly what Wal-Mart is doing. Since the government is proposing to pay for a lot of health service and such, just like Wal-Mart pays for a lot of health services, I'm proposing that the government do what Wal-Mart does and just say "if you want all of this business you must agree to a lower price."

    Don't bring up sticks, I'm not talking about sticks. All I'm talking about is the above. And I maintain that they could get lower prices just like Wal-mart did BY JUST DOING WHAT WAL-MART DID (NO MORE!).

  • MNG||

    So Wal-Mart created a market for $4 prescriptions when it negotiated, and got, that?

  • ||

    When ya'll want to argue about whether the government should be trying to participate in the health care marketplace, let me know. I'll explain why it is necessary which will be followed by cursing and threats from most everyone here.

  • MNG||

    To be clear:
    Before Wal-Mart bargained with them the drug companies did not sell the prescriptions at the low price Wal-Mart got.
    After Wal-Mart bargained with them the drug companies did sell drugs at that low price to Wal-Mart.

    Before the government bargained with them the house companies would not sell a house below 50,000.
    After the government bargained with them the house companies sold houses, to the government, for 50,000.

    So how did one create a market and the other not?

  • Sean W. Malone||

    "You're answer "OMG they won't stop there, they have no reason to and they never do" is, by its own terms, IRRELEVANT. "

    Yeah, except... That's NOT MY ANSWER!

    The government *IS* force, MNG. That's all it is... It's the group of people we've appointed to wield force with societal sanctions. That's IT!

    It can't divorce itself from that and act like Wal-Mart who doesn't have that power. In a situation where the goal is just to purchase stuff, then it has no advantage over Wal-Mart or the competitive marketplace. In fact, if you look at most examples, you'll find government overpaying for everything from office supplies to real-estate to hammers and space-shuttle toilet seat covers...

    BUT, if the goal is to get something for cheap, then the only way it can out-compete a private market is by actively using its powers to force or threaten people into what they want. I'm not saying "OMG" they'll go too far, I'm saying that's the only way they can operate. And that is not irrelevant at all...

  • Sean W. Malone||

    The problem MNG, is that any action of government to get lower prices comes with those threats almost inherently.

    And again, where that is not actually the case, then they simply aren't going to do better than the private organizations.

  • MNG||

    Jesus Sean you are dense. It has this advantage ove Wal-Mart, in fact it has the exact advantage Wal-Mart used, and it has more of it, that is the size of the business it is offering in exchange for the lower price.

    The government buys things all the time without using force. I'm just saying that if it wanted to, like any actor that is purchasing a lot of stuff, it can negotiate a lower price in return.

  • MNG||

    One actor buying a million widgets can get a cheaper price per widget than 100 actors each buying 10,000 widgets.

    If the government (or ANY actor) insured everyone rather than 100 different insurance companies, the government could get a cheaper price per unit.

    It's incredible we've had this much debate over this!

  • MNG||

    I mean, talk about EKON 101!

    Later guys, been, well, interesting!

  • Sean W. Malone||

    Wal-Mart, as it was already discussed - had a completely different advantage that led to them being able to purchase things in higher quantities, but that alone doesn't make it successful.

    Government's "supply chain" is bogged with redundancy, hundreds or thousands of middlemen, bureaucratic red-tape, paperwork, more paperwork, and lets not forget, politicians guiding the whole process... By which I mean, corruptible people who will happily divert this or that funding to companies not by cost advantage, but by what state they're in or who's buddy is running the company.


    That is a huge competitive advantage... Oh wait, no it's not.

    Again, government just "buying things without using force" (is impossible, as government is force as it's root nature), isn't an advantage at all! It's a hindrance, which is why government stuff always costs more...

    The only conceivable way they can get truly lower costs is through using their powers more overtly to push a company to provide a below-market price.

  • Sean W. Malone||

    You seem to have failed "EKON 101" MNG... Simply because you fail to recognize the basic differences in the two entities you are discussing.

  • The Angry Optimist||

    yes, MNG, the government is "creating" a market in a way that is different than your Wal*Mart comparison, because where it acquired that market-changing ability is not through negotiation, but through taking taxes. Wal*Mart negotiated the price; the government "negotiates" with our tax dollars, that it coerces out of us.

    So, yes, it's the creation of a market that didn't exist, because of the nature of the government.

  • Sean W. Malone||

    TAO,

    It seems that MNG has never stopped to understand what the fundamental nature of government is. It's something I realized at 12 or 13 years old though, so I'm truly baffled that it's such a difficult concept for adults.

  • ||

    # BakedPenguin | June 15, 2009, 10:54am | #

    # ... most people have three names, it's just
    # that you don't start using all of them unless
    # you're a psycho killer.

    Or your name is common enough, even in your local region, to be confused with those of others, so that your controversial opinion is mistakenly imputed to them or vice versa, unless the full three names are used.

    I got hip to this truth in two ways: 1) Other "James Merritts" started passing bad checks, about which the recipients and police pestered ME. 2) My incendiary letters to the editor started to cause trouble for other (different) "James Merritts" in town, who would then leave unfriendly messages on my telephone answering machine.

    On the other hand, some people don't bother to use even ONE of their real names, 'eh BP? Each approach has its pros and cons, I'll admit...

  • ||

    In these debates, who will take the position that it is wrong to equate "insurance" with "access to health care"? SOMEBODY needs to do it. The current debate is akin to arguing whether to treat a headache by using stronger Vicodin (indirect Hugh Laurie/House reference) or performing surgery to sever key nerves, when we really should be talking about removing the patient's head from the vise marked "Property of US Government."

    US government intervention into the economy during the WWII era put us on the bad road, the dead end of which we appear to be approaching. Subsequent interventions and tweaks here and there kept us moving briskly along the unfortunate path. Somebody has to stand up and scream -- loud enough to wake the sleepwalkers -- that WE'RE ON THE WRONG ROAD!

    We have to stop, take a deep breath, and look thoughtfully at our predicament, to see where the main road is, and how (and whether) we can get back to it.

  • Fascitis Necrotizante||

    I could only make it through about the first ten times a basic observation flew right over MNG's head, so this may have gotten discussed at some point.

    Family members of mine work with private health care providers. My understanding is that the current Medicare/aid reimbursement levels (varying by state but generally in the .65 range) - contrary to MNG magic - don't lower prices overall. Even with the huge share of health care services they account for! They manage to drive up costs for every other buyer as the service provider attempts to recoup its fiat-imposed losses.

  • Sean W. Malone||

    James: I'll always happily take up that position, and have many times in the past.

    Fascitis:

    (Paraphrased MNG): But... But, it's not by fiat! The government is just acting like any other business.

  • Sean W. Malone||

    (By which I mean, any other business that can arrest you for not doing what it wants... Oh, there aren't any of those? Oops.)

  • ||

    # Sean W. Malone | June 15, 2009, 4:47pm | #

    # James: I'll always happily take up that
    # position, and have many times in the past.

    I was, of course referring to the public, national debate, not the echo-chamber shouting matches (and mud-wrestling contests) that take place in fora such as these threads here. Argue the case in the op-ed pages of the major newspapers or newsmagazines, on the evening news or the Sunday morning talking-heads shows, on the floor of the House or Senate -- or even attain build a huge Facebook, MySpace, or Twitter constituency for you as spokesperson for those views -- that's what I'm talking about: something that exposes the broad base of people to a true opposition view.

    Don't get me wrong: I'm not complaining that you, personally, do not do this or have not done it in the past. Only that I really don't see that point of view seriously introduced, much less considered, in the customary venues of popular discussion, so I can't help but wonder who is -- or might come forth to be -- its champion. I can only say that such people seem conspicuous by their absence, and I worry that we'll soon be locked into socialized medicine without giving a true, free-market alternative a fair hearing, much less a fair chance.

  • Sean W. Malone||

    Health Care really isn't my "main" issue by any means... I typically do more general economics stuff, and I do write a lot and occasionally have stuff published. It's really hard to explain the health-care stuff to people though because for whatever reason, everyone thinks that it's one of a few enshrined areas where the market "doesn't apply"... as if economic principles just stop working when the commodity is medicine and not pencils.

  • ||

    Eliminate the Earned Income Credit. That would help pay for the health care reform.

  • mark||

    Or you could end corn subsidies to pay for health care. Why is this such a bad idea?

    Or you could just support the Patients' Choice Act.

  • MNG||

    "So, yes, it's the creation of a market that didn't exist, because of the nature of the government."

    What a cop out! Terrible TAO, terrible. I could expect such a lame answer from Malone, as he's trumpeted the same irrelevancy all day (but it's teh government, and the government uses evil force so it's different!), but you should know better...

    You may not like where or how the government gets its money, but when it spends that money it is simply another market particpant. When the government buys only hybrid cars, it does not "create" a market in such "because" the money they used was collected via taxes, it influences, as a large purchaser often does, an existing market. And when the government buys insurance for people then ditto. That the source of the money spent would determine whether one or the other actor is "creating" rather than "participating" in a market is an absurd contention.

    Here is how absurd your contention is. Let's take another organization that I'm sure you disapprove of, one that gets its money from coercion and force as well: the mafia. If there is a mafia, and if it has many, many thousands of members (let's say), and it decides to buy all of its members a house with such ill-gotten gains, and it says to the seller "look, we will buy a whole bunch of houses but only if you agree to this price reduction", then it would be absurd to say that a market has been "created" because of the source of the money used in the transaction and how it was raised. Certainly the mod didn't "create" a market for the houses...

    And this example also shows how bizarre Malone's comments have been. If someone were simply pointing out that the mob COULD use their ability to buy in volume alone to get lower prices, then how stupid would it be to "rebut" that contention by jumping up and down and repeatedly pointing out that at times the mob uses immoral force and is nasty? It simply has no bearing on whether, like any other entity in the economic world, it COULD get lower prices because of its ability to buy in volume...

  • Sean W. Malone||

    You really haven't understood a word I've said, have you?

    FORCE is the determining factor in what makes government fundamentally different from any other actor in a market you dumbass. Wal-Mart cannot force their suppliers to give them lower prices. Government can. Your whole "buying in bulk" argument is a fucking canard and I already explained why... so I'll just quote myself:

    "Wal-Mart, as it was already discussed - had a completely different advantage that led to them being able to purchase things in higher quantities, but that alone doesn't make it successful.

    Government's "supply chain" is bogged with redundancy, hundreds or thousands of middlemen, bureaucratic red-tape, paperwork, more paperwork, and lets not forget, politicians guiding the whole process... By which I mean, corruptible people who will happily divert this or that funding to companies not by cost advantage, but by what state they're in or who's buddy is running the company.


    That is a huge competitive advantage... Oh wait, no it's not.

    Again, government just "buying things without using force" (is impossible, as government is force as it's root nature), isn't an advantage at all! It's a hindrance, which is why government stuff always costs more...

    The only conceivable way they can get truly lower costs is through using their powers more overtly to push a company to provide a below-market price."




    Read all that again... Or I'll try to simplify.

    Option A: Government makes things WAY more expensive across the board.
    Option B: Government imposes price controls and brandishes their one & only power that no one else has... beating people into submission... And subsequently causes economic decline & shortages.

    It is *NOT* like "any other entity in the economic world". When you fucking understand that, then you may actually start understanding why the policies you would ostensibly advocate keep resulting in a poorer & poorer world.

  • Sean W. Malone||

    BTW - in real world terms... Medicaid & Medicare already account for half the spending in health care. That's more "market share" than Wal-Mart has already by 20%....

    So clearly, they're already a bulk purchaser of medical supplies. If your argument was even remotely correct, then we would be seeing costs go down already. And it would have been a steady decline for 20 years. But your argument is a massive failure.

  • The Angry Optimist||

    It's not a cop-out, MNG. you had a perfect example in the mob, but not how you think.

    Do you think that there was a market for store protection before the Mob came to town? No? How about after they burned down "that nice place...be a shame..."?

    The Mob just created a market, a racket, in protection. Just because police protection already exists and people pay for it doesn't mean that you're entering the market. You're creating a whole new one.

  • ||

    You're all missing one key point here, and even the author missed it in the last line. The administration knows full well and is advertising that it will increase taxes on the wealthy. The administration can and will raise taxes on those making 250K or more per year.

    It can happen, and it will happen, and there will be no choice but to pay. Like it or not, the "government option" will be all that's needed for large companies like mine so "save" tens of millions of dollars on health benefits by simply eliminating the benefit. The only possible reason any company would continue to offer private health insurance is to potentially attract better employees, but I just don't see it happening.

    Once a single domino falls, they all will, and it's over. We'll all be in a government program. Well, at least I'll be getting my money's worth. :(

  • ||

    "The administration believes it can cover about half that amount through tax increases on the rich and greater efficiencies in Medicare and Medicaid."

    A few problems with that. First of all, the rich make up a rather small portion of our population. There is no way you could tax them enough (within reasonable and fair-ish boundaries) to really help that much. Secondly, the words efficiencies and Medicare/Medicaid should never be in the same sentence.

    The whole idea of government in healthcare is simply an attempt to grab more power. It is a scheme by which the government is allowed to grow.By the time it's failure is evident, the architects of the plot will be long out of office so our opinion of them does not matter anymore.

    Besides, the government is responsible in some way for roughly half of all monies spent on healthcare. If government involvement in healthcare was such a great thing, wouldn't our healthcare system be roughly 50% better and more efficient than in the past. Just like all other big-government-plans, the more the government gets involved, the worse things get but, because we are told otherwise by the media and politicians, we believe them. We had less government in healthcare and it was fine. We got more and it got worse. So therefore more government must be the answer? Right?

  • ||

    I don't agree that government has the solution to this problem, but can't we just agree that there is a problem?? People in their 20's typically cannot afford individual health care. There are all kinds of restrictions on getting policies for those with pre-existing conditions. You are forced to change doctors every few years as businesses jockey to get the cheapest coverage, and those who can least afford it, the working poor, are in the position to be the greatest user of medical services and those most vulnerable to loss of job due to bad health/mental health etc.

  • ||

    Please call it what it is--Tax payer socialized health care. Its not Government health care. the Government has NO money. It only has what it TAKES at the point of a gun, from tax payers.

  • ||

    how bout we pay for universal healthcare by chopping our bloated and highly corrupt defense budget. how bout we stop WAR, Inc...Its amazing how many things we'd be able to afford.

  • Epicurus||

    So, aside from Medicare, Medicaid, and the VA, our health care system would be just perfect, right? No change needed?

  • abercrombie milano||

    A few problems with that. First of all, the rich make up a rather small portion of our population. There is no way you could tax them enough (within reasonable and fair-ish boundaries) to really help that much. Secondly, the words efficiencies and Medicare/Medicaid should never be in the same sentence.

  • Scarpe Nike Italia||

    is good

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