Bankruptcy and Medical Costs or, Why Not a Single-Payer Income Insurance Plan?

Nick Gillespie | June 5, 2009

A new study splashed across the interwebs today will doubtless add fuel to arguments about how desperately we need to switch to a "free" health care system if the United States is ever to become a world-class country/save us all from economic ruination/win the World Cup in soccer/etc.

The study surveyed over 2,700 bankruptcy filers in 2007 and found that about 62 percent cited medical costs as the main reason for their going under.

Most of those bankrupted by medical problems were "solidly middle class" before they suffered financial disaster—two-thirds were homeowners and three-fifths had gone to college. In many cases, these people were hit at the same time by high medical bills and loss of income as illness forced breadwinners to take time off work. It was common for illness to lead to job loss and the disappearance of work-based health insurance.

The study also found that well-insured families often had to cope with high out-of-pocket medical costs for co-payments, deductibles and uncovered services. Medical bills for medically bankrupt families with private insurance averaged $17,749, compared to $26,971 for the uninsured and $22,568 for those who initially had private coverage but lost it during their illness.

The highest average costs were incurred by people with diabetes ($26,971) and neurological disorders ($34,167), the researchers found....

The co-author of the study told the press, "Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy."

There's no question that a) it would be great to actually reform health care root and branch, including the delivery of services (break the MD cartel already!) and insurance; b) that it is inconceivable that the government will do a better job of minimizing bureaucracy and patient failure; and c) that's likely exactly how Congress and Barack Obama are going to go on this issue. The supposed containment of health care costs in Canada and the U.K. (where patients routinely do whatever they can to exit the public system) is due to rationing, not due to the streamlining of service provision. Just telling people no, you can't have that procedure is one definite way to keep costs down; it seems remarkably unwise, especially in an age of blossoming individualized services for consumers.

To go back to the study: There's simply no reason to conclude anything from extreme cases (which bankruptcies are by defintion), and there's certainly no reason to base general policy on extreme cases. In any case, it seems like the problem described above could be addressed via changes in longterm disability insurance. Indeed, why not simply lobby the government to guarantee incomes for disabled workers, forever and ever?

I haven't read the study but from the descriptions above, the costs are less daunting than they seem at first. One would expect to see bankrupt people filing heavier-than-average costs pretty much across the board. In 2007, health care accounted for less than 6 percent of a household's direct cash outlays, far below housing (33 percent), transportation (18 percent), and food (13 percent); insurance and pension costs, some of which goes to health care in the form of premiums, came in at 11 percent. According to government data, the average household directly spent about $2,700 on health care (actual totals are skewed, with younger people spending far less and seniors far more).

Is it really that hard to bring the health care debate out of the stinky old swamp of single-payer vs. something like what we have now, only marginally more expensive to individuals?

Any sort of serious reform of the health care question really has to start with definitional questions: What exactly is health care? And what is its relation to health insurance? Why can we draw that simple distinction when it comes to, say, cars and car insurance but we hopelessly conflate the two when it comes to health care? To claim that "only single-payer" can save us all is simply intellectually unserious.

I'm all for severing the tie between the workplace and health insurance. I know that my employer has better things to do than be some sort of half-assed insurance broker and I'm guessing that I could do a better job picking plans based on my family's needs. But I'm guessing that the plans emanating from Congress in the dog days of this summer won't be heading in that direction.

Update: Via Alan Vanneman comes this relevant blog post from former Reason editor Virginia Postrel, who comments on a Council of Economic Advisers report that concludes "Nearly 30 percent of Medicare's costs could be saved without adverse health consequences." Writes Postrel:

Think about this for a moment. Medicare is a huge, single-payer, government-run program. It ought to provide the perfect environment for experimentation. If more-efficient government management can slash health-care costs....why not start with Medicare? Let's see what "better management" looks like applied to Medicare before we roll it out to the rest of the country.

This is not a completely cynical suggestion. Medicare is, for instance, a logical place to start to design better electronic records systems and the incentives to use them. But you do have to wonder why a report that claims that Medicare is wasting 30 percent of its spending thinks it's making a case for making the rest of the health care system more like Medicare.

Whole post here.

Comments

robc|6.5.09 @ 10:12AM|#

Im assuming this study will be just as debunked as the previous one claiming 50% of bankruptcies were the result of medical costs.

For one thing, no middle class family should be bankrupt over 17k in medical debts. Im guessing that PLUS the 50k in cc debt is what did them in. Plus the heloc on the underwater house.

Because Im thinking, if you filed a bk with just your 17k in medical debt, you need to be suing your bk lawyer for malpractice.

|6.5.09 @ 10:19AM|#

This study found that about 62 percent cited medical costs as the main reason for their going under.

Actually, no it didn't. About a third claimed medical costs as the main reason, but Elizabeth Warren et al. decided that another large group was wrong about their claims, using the same metric as before-- "even if you have other enormous problems, like housing costs and spending as much or more than you make each month so you have no cushion for anything, like that New York Times reporter and his wife, if you also have a medical expenditure we're going to blame the bankruptcy on that."

The study also failed to note that the total amount of bankruptcies is still down from the 2005 change in law, and the rush of people to file before the change in law. If you assume that people with medical emergencies are the ones who have the least control about when to file (as opposed to people like that New York Times reporter and his wife), then you would have to assume that medical bankruptcies would make up a larger proportion of the massively smaller denominator.

The number of bankruptcies is so much smaller than before the 2005 law, in fact, that if you took this study's figures you would have to conclude that the total number of medical bankruptcies themselves dropped, yet somehow it's a crisis.

Megan McArdle has a few criticisms here.

Cabeza de Vaca|6.5.09 @ 10:29AM|#

Al Gore to the rescue.


http://www.foxnews.com/story/0,2933,525175,00.html

hmm|6.5.09 @ 10:32AM|#

Let them force rationing and destroy health care in the US. India and Singapore will take up the slack with cheap US educated health care and thrive. Just make sure to invest your what will most certainly be almost worthless dollars in companies in those areas.

Fuckem' if you can't beatem' figure out how to profit off em'

|6.5.09 @ 10:35AM|#

This is another voodoo statistic. SOMETHING has to be the leading cause of bankruptcies. Would everyone feel better if the leading cause of bankruptcies was gambling addiction? How about drug addiction? Maybe sheer laziness?

It reminds me of the study stating that cell phones are the number one cause of car crashes. Would we sleep better at night if drunk driving, or hitting someone on purpose were the leading causes of crashes?

As JT stated, the NUMBER of incidents compared to time is significant. The percentage of the cause is just a number dishonest people can use to further their agenda. If only 1 person in the US filed bankruptcy, and that was due to medical bills, the number would be 100%. Don't they require basic statistics in school anymore?

Fascitis Necrotizante|6.5.09 @ 10:42AM|#

John Thacker's McArdle links are pretty thorough takedowns.

martin|6.5.09 @ 10:46AM|#

@ John Thacker

How did you find out that Nick is referring to the Warren study? I can't find any reference one way or another.

|6.5.09 @ 10:47AM|#

As some one who has been self employed most of my life,I've always considered company health benefits untaxed income.I have no sympathy for people crying about this system.People who whine about 'co pays' think nothing about paying for the normal up keep on their car.Ask the same person to pay 50 bucks of a doctor visit and they scream bloody murder.

robc|6.5.09 @ 11:03AM|#

martin,

I dont know how John knows, but I saw another link to the Warren study yesterday with these exact same numbers, so it is that.

Some Guy|6.5.09 @ 11:04AM|#

Why can we draw that simple distinction when it comes to, say, cars and car insurance but we hopelessly conflate the two when it comes to health care?

Because nobody is ever denied car insurance for reasons entirely outside of their control, and you can't die from not having a car. That doesn't mean single-payer is the way to go, but if you really can't tell the difference then please don't go on TV and try to play up our side. You'll do more damage to popular opinion on this than Republicans have to the free market by claiming that's what their corporate welfare policies were.

robc|6.5.09 @ 11:09AM|#

Some Guy,

No one has ever died from not having health insurance. They may have died from not having the cash to buy the service, but that isnt the same thing.

Alan Vanneman|6.5.09 @ 11:22AM|#

Yeah, Nick, a link would have been nice. Anyway, Megan McCardle gives the study a thorough pounding here:

http://meganmcardle.theatlantic.com/archives/2009/06/why_warrens_new_bankruptcy_stu.php

I haven't read the study myself, but after seeing what Megan did to poor Edmund Andrews

http://avanneman.blogspot.com/2009/05/bad-news-is-that-bank-is-foreclosing.html

I would NOT want to argue about bankruptcy with her.

|6.5.09 @ 11:23AM|#

Oh puh-lease! I lived in the USA for 46 years and yes the health care was great was EXPENSIVE.

Then after I was diagnosed with a illness classes as a disease, my insurance compnay did everything they could to get rid of me. Just my medication and doctor co-pays alone were huge. It was hard to decide whether to eat food or medication.

Then after I moved to the UK, it all changed. I get all my meds and doctors appointments through the NHS.

And it is untrue that this author says: "U.K. (where patients routinely do whatever they can to exit the public system)...

The private system here is called BUPA and it is the forerunner of the awful system that is killing our parents and loved ones there in the USA.

People here will defend the NHS to the end. They have no concept of how private insurance works.

The truth is that non-life threatening conditions take less priority than life threatening ones. Like triage...it makes sense.

When will America realize that it lacks behind most of the Western world in this respect and really it's the insurance companies like Kaiser that Nixon helped put into business to rob and cheat us blind?

Warty|6.5.09 @ 11:31AM|#

really it's the insurance companies like Kaiser that Nixon helped put into business to rob and cheat us blind?

So we agree: the government fucked up the healthcare market. You, for some reason, think the government is competent to fix it.

|6.5.09 @ 11:32AM|#

Mike @ 10:47,

How do you feel about:

1. Interest on homes being deductable
2. Tax on homes being deductable
3. RE tax on current homeowners being frozen or rate of increase in RE tax being restricted for current homeowners resulting in a net effect that two otherwise identical homes sitting next to each other may end up being taxed at dramatically different rates.

|6.5.09 @ 11:52AM|#

Fuck the NHS!

As I have mentioned before, I lived in the UK for 15 years. One of my sons was born in the US, the other in the UK. Thank god, assuming there is one, that the older son was born in the US as he was 6 weeks premature. The older son was born in a modern hospital with proper facilities to handle a premie. The hospital my younger son was born at in the UK in 1988 was straight from the 50's. Worst of all, my younger son turned out has cycsitc fibrosis (CF). It was quite likely that there was a tell-tale symptom at birth that was missed at the UK hospital. At two years old, the NHS doctor misdiagnosed my younger son as being lactose intolerant. The result of this misdiagnosis was we were withholding foods with high milk fat content and high calories. Since CF patients cannot digest fat properly, withholding foods with high fat content was the same as starving my son - all done in accordance with doctors orders. The ironic thing is, the doctor that misdiognosed my son replaced a doctor that moved to Glasgow because his son had CF and the CF treatment center was in Glasgow.

When my son was finally diagnosed at 11 y.o., I was covered by Kaiser. Kaiser sent my son to the specialist at Johns Hopkins Hospital and never once - not once - baulked at any treatment at any cost. In 2003 I returned to the UK with my son to bury his grandfather. Before I went I checked out the CF center at the Yorkhill Childrens Hospital in Glasgow to make sure that I knew where to go should my son have a down turn while in the UK. At that time the CF center at Yorkhill had lost its certification because it was dirty and lacked staff.

|6.5.09 @ 11:53AM|#

Renter 11:32,I'm against it.I've never been able to take it.When I bought my house in 1996 my house payment was 501.00 a month,I've redone it with my own money and work (almost doubling the square footage) and have increased the value while the debt went down.I never had enough to take anything except the standard deduction,all my deductions are business related.I only buy something if I can afford it,not for a deduction.Of course I write my own tax checks,including 14.93% for self employment.

Gilbert Martin|6.5.09 @ 11:58AM|#

"Let's see what "better management" looks like applied to Medicare before we roll it out to the rest of the country"

Medicare's performance is abysmal on a nominal basis and ever worse on an actual basis if adjusted for the fact that it effectively offloads some of it's costs onto the private sector healthcare market. Healthcare providers engage in cost shifting onto privately insured patients to make up for below cost Medicare reimbursement rates on some procedures.

|6.5.09 @ 12:08PM|#

How did you find out that Nick is referring to the Warren study? I can't find any reference one way or another.

From his comment "A new study splashed across the interwebs today." Really, the newly released Elizabeth Warren study is the one that's splashed across the Internet today. Only a very, very solid guess. But yes, Nick could've actually linked to the study or a one of the many stories about it.

|6.5.09 @ 12:17PM|#

Mike @ 11:53

Good. Just making sure you were consistant. Mind you, when I did own a house I did take all of the legal deduction available (I maybe an asshole, but I am not stupid), I just don't agree with these deductions.

|6.5.09 @ 12:31PM|#

Renter,I don't blame you for taking the and I would have also.It's the way they rig the game.My wife couldn't understand why our friends received refunds and we didn't.We married in right after we bought the house( in her name to keep it out of the business).I haven't owned anything in years.I've always tried to owe 500 to 1000 at the end of the year.Of course,our friends all have with holding at work and pay 900 to 1200 a month in house payments for the same size house .I'd rather have an extra 500 less payment than a tax deduction.I do take every business deduction I'm allowed but it's mostly rent,utilities,supplies and mileage.

robc|6.5.09 @ 12:39PM|#

Renter/Michael @whenever,

How about sticking to the correct thread?

Sean W. Malone|6.5.09 @ 12:48PM|#

Argh... I keep seeing the writing on the wall, watching the US go towards socialist medicine is really going to be a problem.

I'm not old enough to have amassed any kind of legitimate fortune, so I know I'm going to be stuck with it unless I can get better positioned in the next couple years and stay under the radar otherwise... The real question is, where the hell would I be able to move that I can escape all of this nonsense?

|6.5.09 @ 1:09PM|#

"""This is not a completely cynical suggestion. Medicare is, for instance, a logical place to start to design better electronic records systems and the incentives to use them."""

EMRs are will not bring costs down. The equipment and software is expensive and the equipment has about a 5 year life span.

Here's what they can do. They allow for an agency to review what procedures are being done for whatever assessment. This sets up a great way to micro-manage health care, be it government or corporation. EMRs make it easier to propagate your health information too. Double edged sword there. One day it will be easy for any provider (anywhere) and any government agency to review your complete medical history. The only thing stopping anyone from looking is a username and password. And, HIPAA laws have an exclusion for law enforcement. Also it becomes a question of laws that allow access to your records, we know who makes laws, so that shouldn't be of any comfort. One day a pre-employment medical screening could be as simple as a credit check. Of course, if your in a bad car accident while on vaction, it probably a plus.

EMRs are necessary for the looming micro-management of your health care by government. It's already being rolled out. Look up the Take Care New York program, and the Center for Medicaid and Medicare services' (CMS) Physician Quality Reporting Initiative.

|6.5.09 @ 1:33PM|#

EMRs will not bring costs down.

I can confirm that. First, they are hellaciously expensive, building more cost into the system. Second, your carrying costs are lucky to stay flat, as you replace lower-wage medical records people with higher-wage IT geeks.

The most successful installations to date increased efficiency or managed care in a way that covered their costs. Most are money losers.

Harpoon|6.5.09 @ 2:01PM|#

The government can barely support the IT infrastructure for Medicare. I shudder to think what would happen if they had to run the entire health insurance industry.

I am so into myself!|6.5.09 @ 2:08PM|#

"The real question is, where the hell would I be able to move that I can escape all of this nonsense?"

Just die. That's what I plan to do. Both parents died young after lengthy battles with cancer (ovarian and esophageal). The quality of life isn't worth the cost. You pay to be tortured.

I also took care of my grandmother and her sisters in their final years (all lived to about 90). Nursing homes are a racket. I can't believe there isn't a mob connection.

So again, my advice is to simply die. It's natural you know. And natural shit is good for you, right?

The Lakota had it right. At some point you just wander off into the woods.

JB|6.5.09 @ 2:26PM|#

End of life costs are the death knell for America if they try socialist healthcare.

Every old fart wants to live forever and we can now keep them alive even longer at even higher costs. They don't care about the costs because they don't pay they them. Who cares if it cost $300,000 to live another 6 months at age 95? It's not your money.

Abner MacGillicuddy|6.5.09 @ 3:55PM|#

You know, every so often someone asks, "are you prepared to let people die because they get sick and can't afford healthcare?"

Well, leaving aside from the fact that that's a question with a dubious premise, let's examine it.

First of all, let's face it, given that we live in a world of limited resources*, some people are going to die because of the inability to pay for health care.

So, do we go with letting people die because they individually can't pay, or do we go with a committee deciding who dies because they're to far down the waiting list to get timely treatment. Or failed to win some other form of lottery.

Now, what national health schemes do succeed at is delivering primary care, thereby keeping a lot of potentially dissatisfied rabble content. As long as someone is taking care of them, they really couldn't give a shit about someone with a serious illness on a waiting list. Nobody really cares about outliers on the margins, no matter how "compassionate" they claim their "society" is.

*I seem to recall that's why we have a subject called economics.

Sean W. Malone|6.5.09 @ 7:08PM|#

"Just die"... well... you see, I'm 26. I'm not planning on dying just yet. I will be alive another 60ish years, and I'd rather not live in a world that sucks balls as our current America is shaping up to.

|6.5.09 @ 7:53PM|#

I take great offense at your comment that in the UK "patients routinely do whatever they can to exit the public system". This is a typical comment I hear in this debate, and it is simply not true! How do I know, because I've spent 24 years of my life in the UK and can tell you first hand that the NHS is excellent and people in the UK love the system. The irony is, in the UK they hold up the US health care system as an example of how badly run a private system is.

That fact of the matter is, the US ranks lowest in the industrialized world for health care (as measured by mortality rates). The US private system has MASSIVE overhead, way more than medicare which is actually extremely efficient. Stick to the facts, this is too important of an issue to get lost in the politics-as-usual mud slinging that too often holds the US back from much needed reform.

Also, why draw the line with health care? If you follow the same logic, why do we have 'single-payer' police departments? Or 'single-payer' fire service.

Sean W. Malone|6.5.09 @ 11:53PM|#

The US doesn't HAVE a private system Mike. Anyone who holds it up as a reason "privately run health care" fails is either dishonest or ignorant.

So I'd encourage you to "stick to the facts" sir. The point is we have a system that, like many publicly funded, but privately run systems, is designed for waste and higher costs. It's not exactly shocking to see costs increase dramatically - but yet again, the propaganda machine in the UK and elsewhere (and here for that matter) would have you believe that the costs have to do with the private aspect of the system and it couldn't be farther from the truth.

I hope people have made this point to you before, but in the aspects of the healthcare system that are actually subject to market forces... like Lasik eye surgery, for example, are consistently improved and cheaper now than they were just a few years ago.

You've come to the wrong place to advocate for "single-payer" police. But I'll leave that for another time.

Sean W. Malone|6.6.09 @ 2:04AM|#

Also:

"Economic Research on Direct-Purchase Health Insurance: New Models for Real Health Care Reform"

Alice Bowie|6.6.09 @ 8:53AM|#

I don't know about this "Nick Gillespie" guy...Is he an acutal Libertarian...or just another lobbist for the Insurance Industry.

- You work
- Your job insures you
- You have $50,000 in 401k
- Your child gets cancer
- The insurance company doesn't cover it
- You exaust you 401k, savings and even sell house
- You declare bankrupsy

So, Nick Gillespie, what is it that you want me to do ? You seriously call this an OUTLIER or EXTREME CASE? You want me to lobby for disablity insurance?

This is not an, out of the ordinary case.

Alice Bowie|6.6.09 @ 8:59AM|#

So, the guy i take the bus with has a new baby coming. It is determined that the child will be born with a Clef Lip and Palette.

He is told by his insurance company that they won't pay a PENNY for the ($15,000) operation. Do you know why Mr. Nick Gillespie, because it is a cosmetic procedure.

It kinda makes one wanna drive over to the Insurance Company, find the CEOs Kid, CLIP his mouth open with a pair of garden clippers, and then ask him ... "So, do you think your copmany should not pay to repair your child's mouth because is it is a cosmetic procedure?"

Nick Gillespie I saw your video last week on the best way to fix the Health-Care problem in america is by American's getting health insurance. Yes, I believe that people should pay for health insurance instead of beer...no doubt. But, Many of us, a lot more than you give credit for, PAY FOR INSURANCE and THEY DON'T do SHIT !!!

Michael Ejercito|6.6.09 @ 9:15AM|#

I wonder if price controls on medical care will reduce bankruptcies due to medical bills.

Sean W. Malone|6.6.09 @ 2:00PM|#

For gods sake we already HAVE price controls Michael!!

Why does no one have any idea how medical care is run in the US?

There is almost nothing "privately run" about it... Geesh. Doctors salaries are controlled, prices for nearly everything is controlled, Government pays for some 70% of all medical care ALREADY, and the "Insurance Companies" are getting vilified right now for being *exactly* what a government run system is... Don't you guys get it? Right now, you are not the customer. Your insurance company & the government is. SO, hospitals, doctors, clinics and everyone who takes insurance and medicaid/care payments to provide treatment caters to THEM, not to you! So guess what... It's not set up to be about your needs.

You're not the client right now. And price and wage controls are econ 101 FAIL. This shit always raises the price of goods and services. Every aspect of the way the system works right now is econ 101 FAIL.

I'm getting hysterical about this nonsense, because it turns into yet another situation where people are claiming that libertarians are "shilling" for some corporation or some other nonsense and pretending that we don't care about the chillun, and there's just grotesque idiocy and ignorance about how any of it even works.

WE HAVE PRICE CONTROLS. Price controls are a bad goddamn idea.

Start here: Economics in One Lesson


Seriously people. What you have now is a result of government intervention.

|6.6.09 @ 7:00PM|#

Sean,

The excellent New York article that Postrel (approvingly?) discusses how doctors receive additional payments based on the additional tests that they order. That doesn't sound like controlled salaries to me.

Sean W. Malone|6.6.09 @ 9:44PM|#

Mike,

You're missing the point, entirely. First off, ordering additional tests and getting additional payments for recommending certain drugs, etc. is exactly the kind of way that people work around wage & price controls, which is one reason why they are chronically inefficient at keeping costs overall low.

Secondly, anti-competitive forces quite often work to keep prices (especially wages) high. The AMA functions just like any other union and by restricting the number of licenses granted per year they deliberately keep doctors wages and associated training costs high. The are able to do this through government intervention.

There's this fine article I read not but a month or two decrying the doctor shortage.

And I can't help but ask the question "Well wait a second, why do we have a doctor shortage?!" We don't have a shortage of plumbers, or engineers, or musicians do we? Of course not... WELL sir, the answer is because of this:

"Medical Miscalculation Creates Doctor Shortage"

From the article:

"Controlling the supply

The marketplace doesn't determine how many doctors the nation has, as it does for engineers, pilots and other professions. The number of doctors is a political decision, heavily influenced by doctors themselves.

Congress controls the supply of physicians by how much federal funding it provides for medical residencies - the graduate training required of all doctors.

To become a physician, students spend four years in medical school. Graduates then spend three to seven years training as residents, usually treating patients under supervision at a hospital. Residents work long hours for $35,000 to $50,000 a year. Even doctors trained in other countries must serve medical residencies in the USA to practice here.

Medicare, which provides health care to the nation's seniors, also is the primary federal agency that controls the supply of doctors. It reimburses hospitals for the cost of training medical residents."

So the problem here Mike is that you assume, as so many do, that government isn't involved in all of this. And it is. To a massive degree, and it has been for some 40 years.

Ron Paul also wrote a fantastic article years ago about this very topic (and of course, he is a physician as well): Lowering the Cost of Health Care"

The cost of drugs & hospital procedures is controlled tightly through Medicaid & Medicare especially because they will only pay X amount per various procedures regardless of how much they actually cost, this pushes additional costs onto hospitals & doctors, which subsequently (and unsurprisingly) have to work around these things in order to continue to exist.

The ridiculous part is we have a dozen government created/enforced problems that compound on each other. If there aren't enough doctors - which there aren't - and government has restricted that ability of anyone to compete for doctor services, and we put price controls on procedures, then the costs have to go up. Now, add to that the problems of FDA approval costing approximately $1,000,000,000 per drug, sociological problems of people not bothering to even ask what procedures cost thanks to 3rd party payers...... Guess what.

The way the system is designed is guaranteed to increase cost of health care. YET, you view it as a problem with the system being "for profit" and/or "private", and that's utter nonsense. Utter. Nonsense.

Again, you want to find the parts of the medical industry that have gotten cheaper over the years. And the only ones you're going to find are the ones not as tightly controlled. As usual, the fundamental laws of economics apply to all economic activity - it doesn't matter whether or not it's consumer electronics, medicine, schooling, etc. it all works the same way. If you interject government into the system, attempting to force various outcomes, you skew the market and cease its ability to function. The more clearly I understand all this stuff the more I realize that the only thing that can really solve the problems of dispersed knowledge is *always* going to be a free price system. Anything else is a disaster.

Sean W. Malone|6.6.09 @ 10:15PM|#

Forgot another link:

Economic Research on Direct-Purchase Health Care

Alice Bowie|6.7.09 @ 12:39PM|#

OK Sean...i read both articles.

How about this. Seince you and most libertarians and conservatives and the rich are so confidend that profit-based insurance companies/hospitals/providers will just simply do 'The right thing' for a middle class father who:
- Has a Stroke
- Looses his job
- Has to surrender his house, savings retirement funds and college funds for his children...

Let's just take away the ALL government involvement. Let's just let capitalism runs its course and everything will be ok...FOR PEOPLE with LOTs and LOTs of MONEY...that is.

For the regular JOE like myself who do pay for health care and would OBVIOUSLY not be able to make the premium payments after loosing their job once they have a stroke, well, perhaps we can offer an ELECTRIC FENCE in every TOWN where I can JUMP ON, Die, and my family can at least collection the Life Insurance PREMIUMS so that they, at least, don't end up in the poor house...in which most mean-spirited conservatives, libertarians, and rich would be able to keep their billions.

We find that unacceptable. And EXPECT decent, riots, crime, and perhaps a Guillotine right next to that ELECTRIC Fence I proposed...FOR YOU!

History has proven time-and-time again that not taking care of the regular Joe and the poor will lead to something very very very mis-fortunate for YOU!

I know libertarians are big in civil liberties. But, if you persist on dis-enfranchising the poor and the regular joe...You're gonna have to join the likes of the conservatives in instituting a NORTH KOREAN/SYNGAPORE/CHINA like POLICE STATE to protect you from my KIDS living on the street.

Alice Bowie|6.7.09 @ 12:59PM|#

Look, I understand that we can't just simply GET RID of the Insurance Companies at this point. Millions of Americans are employed by these people. And the last thing we need is TARP money to bail out the INSURANCE COMPANIES when everybody STOPS paying them premiums.

The complaint that the Average American Joe has is that the government was REAL QUICK to spend $11BILLION dollars a MONTH on IRAQ. We give BILLIONS to AFRICA, ISRAEL, Latin America, etc. etc. etc. Yet, the same Government is unwilling to pay for REAL URGENT TREATMENT that people need. I'm not talking about a hang-nail. I'm talking Cancer, heart disease, etc.

If you child is born with a Cleft Lip, insurance won't pay...as if this is NOT A REAL URGENT NEED. Yet the government is more than willing to PAY LOCKEED and Haliburton for machinery that BLOWS off people's feet...the FEET of OUR OWN TROOPs.

And I'm not saying that I am holly-er that thou...If I ran and INSURANCE company, I would collect premiums from healthy people. Yea, I'll pay for the occasional Dr. visit, x-ray, and asthma, cholesterol medication. And, as soon as someone gets a stroke/cancer where now MY INSURANCE COMPANY has to payout more to that family than I have collected in premiums from them ... I'd deny the claim. It's the American Capitalistic way. The Insurance Companies are behaving EXACTLY how they are suppose to behave. They are keeping profits and the stock price HIGH. And for the occasional Joe that has medical hardship...TOUGH SHIT.

This is going to cause other problems. And if it keeps happening to enough people, the Insurance Providers are going to fail because people are JUST GOING TO STOP paying the premiums.

If I'm going to be OK if nobody in my family gets sick and I'm going to loose EVERYTHING once someone gets cancer or something...what's the point of me paying the $1,242 a month I pay today to AENTA?

Perhaps we should do what Ron Paul recommends...Let everybody pay for their own healthcare cost. If that's the case...I don't wanna PAY AETNA another DIME !!!

Alice Bowie|6.7.09 @ 2:25PM|#

...It's bad enough to loose a child or a spouse to cancer/etc...Let alone to be left without a penny...AFTER years of paying $1,200 per month for my family.

Sean W. Malone|6.7.09 @ 9:42PM|#

Alice... I know you own a computer. How much did it cost, out of curiosity? My guess is, not all that much - clearly less than you're paying in insurance. The reason you were able to own a personal computer, is not because government came in and determined that it was a "necessity" and controlled the prices or development of the technology, but precisely because it did the opposite. Don't you get that?

Capitalism is *BEST* (by far, by the way) for the poorest among us. Have a look at people in India, Singapore, Hong Kong (and now to some degree China), South Korea, West Germany vs. East Germany, Estonia... Costa Rica... the list is endless. That's what I never understand about people (like yourself) who make emotional arguments about this stuff.

The RICH benefit the most from the system as it is now! As I pointed out above, we have a government controlled/run system already. Why do you labor under the delusion that when more government is involved suddenly the high-costs will suddenly disappear and big businesses will suddenly stop being able to go to their buddies in congress and write laws that benefit them at the expense of everyone else? The reality of history is 100%... seriously... one hundred percent of the time the opposite! Every time you increase government power, and concentrate more authority in the hands of a small group, the incentives to influence that authority simply get higher - and guess who has the clout, the money, the access and the historical know-how to do the influencing? Seriously... Just guess. It's not going to be you. And it's not going to be me.

The only way to stop that, the only way to stop big businesses from making medical decisions for you, and the only way to lower costs for *everyone* in health care (just like consumer electronics), is to adopt a laissez-faire, completely free-market approach. Any of these half-measures, or outright socialist medicine schemes will wind up the same way as social security - broke, failed, unable to deliver it's promises and resorting to outright theft and lies in order to even stay alive.

Don't you get that one of the main reasons libertarians advocate the free-market policies we do is precisely because we want to see the poorest people, the most vulnerable protected from businesses and political interests?


Finally, I have to say - you've come to the wrong place to rail against supporters of Iraq, supporters of shady government contracts and foreign aid. I doubt very much if a single one of the libertarians who frequent this site support a bit of it. I know I don't. So yeah, it sucks that the US will be paying billions to fight silly wars in Iraq, and billions more sending to other countries taken forcibly from the taxpayers, but any argument that says "Well, Government forces us to pay for Iraq, so it should be ok to force people to pay for more medical care" simply doesn't hold any water.

Besides, as I've already pointed out the US Government already pays the lion's share of cost of paying for health care, and the data is somewhat skewed as medicare & medicaid pass a lot of their administrative costs onto the private sector (by making doctors and hospitals - as opposed to some HHS agency - fill out all the paperwork and keep all the records). So exactly why is it that you're not blaming existing government? They're more involved already than either employer funded health care of household/private donor funded health care.


Look, I don't know what to tell you about your high medical costs other than that it sounds like it sucks, and I feel bad that you have to deal with that. I'd encourage you to push as hard as you can for an open market in medicine. Without that, the costs will never come down. The alternative is increased costs, rationed waiting times, more denied procedures, and probably worst of all... an end to innovation. At that point, it really will be only the rich who can afford it.

Alice Bowie|6.7.09 @ 10:29PM|#

Sean, can you SPECIFICALLY tell me...how would you STOP an insurance company from dropping someone once they are sick?

I'll take any argument other than "oh...just simply move to another carrier...that's what's what great about america...competition.". That doesn't work once you've had the STROKE...It's a pre-existing condition...and you are UNINSURABLE.

What I would accept as an answer from you is that they Once I have the Stroke...I can go ahead and drop dead. I may not like that answer. But, I doubt you, or anyone else who supports the 'laissez-faire' thing can think up of anything else.

But, I'm all ears Sean. Tell me how would accomplish that without the government.

Inspector Fu|6.7.09 @ 11:26PM|#

"Sean, can you SPECIFICALLY tell me...how would you STOP an insurance company from dropping someone once they are sick?"

Nice setup.

A question not about a specific scenario without specifics known, while simultaneously looking for a specific panacea answer for a hypothetical question about an industry that's already inundated with government controls whose inquirer asks 'how could we do that without government?'

Not sure even Jesus could answer that question, good on ya, you've delved into the world of obtuse minutiae.

I don't know if you've caught on, but Sean's given an overall gauge of the market system vs. government controls of the healthcare system. But now that he's given an enormously concise argument, you're probing with a non-question about a non-specific scenario looking for a *specific* *single* answer about a non-specific ailment of a non-specific person in an industry already intertwined in government with an untold number of scenarios and outcomes. YOU SEE. Given that there are millions of these kinds of decisions made every year about millions of people, all in different circumstances, the only answer is the one he's given, the BIG PICTURE one and that is to free it of the artificial controls of government. We've seen this time and again, freeing the market of artificial controls benefits everyone.

Alice Bowie|6.7.09 @ 11:30PM|#

?? Inspector Fu ??

Do u really think "...an insurance company from dropping someone once they are sick?" is a hypothetical question?

Inspector Fu|6.7.09 @ 11:40PM|#

"You're gonna have to join the likes of the conservatives in instituting a NORTH KOREAN/SYNGAPORE/CHINA like POLICE STATE to protect you from my KIDS living on the street."

This is just nonsense. Not only because it have no place in presenting a concise argument about policy, it's factually misleading.

As a resident (not citizen) of Singapore, I take exception to this. Singapore bears little resemblance to China and especially NOT NORTH KOREA. What the hell? Don't lump countries together at random if you want to be taken seriously.

Singapore:

http://travel.nationalgeographic.com/places/pho
tos/photo_singapore_cntry_singapore_cntry.html
http://www.valori.it/_media/images/immagini/singapore.jpg

NK:

http://juniorannex.files.wordpress.com/2009/03/korea_lights_lg.jpg
http://media.nowpublic.net/images//3b/1/3b168a2ae9cf8f65d8d5d522fa83803d.jpg

Inspector Fu|6.7.09 @ 11:42PM|#

"Do u really think "...an insurance company from dropping someone once they are sick?" is a hypothetical question?"

...

who is 'someone'? What are the specifics? And thanks for disregarding nearly the entirety of the rest of my post. Thanks.

Alice Bowie|6.7.09 @ 11:50PM|#

I'll make it more specific. Replace "someone" with "anyone". As i EVERYONE...that is pretty specific.

Alice Bowie|6.8.09 @ 12:21AM|#

How about this idea:

Let's NOT do SINGLE PAYER HEALTH INSURANCE. In fact, let's get rid of Medicare/Medicaid and all of that unecessary stuff.

Let's keep the Insurance Company AS IS.

Better yet, Let's take away ALL GOVERNMENT REGULATIONS.

Let's remove the regulation that any company has to offer healthcare to their employees. Insurance will be available for anyone who wants to buy it...and since there is no government regulations...It would not be mandatory for anyone to buy it. If you are rich and can afford to pay health provider from ones checking account, credit card, etc...why pay for health insurance. And, if you are poor and you don't have the money to pay for insurance or a health provider...well, tough shit. And, if you are middle class, you can (at your own will) buy health insurance or NOT buy health insurance.

Me, as a member of the middle class, would NEVER buy health insurance. I would just pay for cash for everything. If me or a family member ends up in the hospital and it costs $100,000+ by selling everything I have including my home, my 401k, my savings account, etc. And, when I have no more money...Touch Shit.

The way i see it. It would be silly to pay $12,000 per year for 10 years...just not to be properly covered and have to sell everything i have anyway.

And, if in the MOST LIKELY event that nothing really happens to us...as it does for most people...why bother paying.


This will solve the problem.

Inspector Fu|6.8.09 @ 12:50AM|#

"EVERYONE...that is pretty specific."
"If you are rich.."
"Me, as a member of the middle class.."

You're not even making an argument anymore. Not that there is a good one for socialized healthcare, no matter what its current permutation in nomenclature is.
And this thread is done.

Sean W. Malone|6.8.09 @ 2:24AM|#

Alice, for the bazillionth time, it is because of government intervention in the market that health care is so expensive. It's not a feature of free or relatively free markets to drive costs up. It simply doesn't work that way. Competition in EVERY SINGLE AREA that you can find a free or mostly free market operating pushes quality up and price down. Always. This is about as close to a fundamental law as you're going to get.

So again, if you are middle class (btw, I'm very very much lower middle class at the moment), then you would be one of the main beneficiaries of a system stripped of government involvement - as you have been in consumer electronics, (mostly) transportation, (mostly) food, and literally everything else that the individuals are allowed to trade for on an open market.

This isn't rocket science. 30 years ago, a computer like the one you no doubt used to post your inane comments on this board.... well first of all didn't remotely exist (innovation is awesome isn't it?), but secondly would have cost 10s of thousands of dollars. That was obviously unaffordable by any middle class standard, certainly a "luxury" item - but guess what, a few years down the road and shazam, you get something 100 times better for a fraction of the cost.

How did that happen Alice? Do you understand what I'm trying to suggest here? Competition in various markets over the years has produced cheaper, better *everything*. EVERYTHING Alice. That is, everything except in all those areas that there is no free market. Areas like medicine. How is that pattern hard to see?

A cursory understanding of basic economics will help you to understand why what you've said is nonsense.

You have also done nothing but set up strawmen and red herrings here...

I didn't say "Let's keep the Insurance Company AS IS."

What I said was; the way things are is heavily controlled and influenced by the government already! Don't you get that? I've spent far too much time writing all that out, explaining what's going on and linking to sources that back up what I'm talking about. So... I guess, it's just becoming silly. What is so hard to understand about what I've been saying?

"As is" = Government run health care.

You can keep pretending that your problem is the insurance companies, but that's simply nonsense. And by the way, for the record... I wouldn't "STOP" insurance companies from denying claims. That's entirely the point. These things aren't done just because they hate you - but because the costs are too high. This is a remarkably important market signaling mechanism... But as things are it is a consequence of the government involvement that prices are so high to begin with. If you don't understand that I really cannot help. Once you eliminate barriers to entry, and you get government out of the business of price-fixing, and you do these things:

1. End the FDA's $1 billion dollar per trial monopoly on "testing".... That is, allow independent organizations to rate the safety of medical procedures
2. Break up the AMA-only licensing requirements, allow competition for licensed medical professionals - and quit using government funds to control the quantity of doctors
3. Allow nurses to run triage clinics and allow patients to choose their own place of treatment. For example, if you had a cold that lasted a week, or a broken arm, you could chose to go be treated by a nurse instead of an M.D. - just by doing that, without increasing the supply of doctors, would increase competition and lower costs immensely as you aren't paying for the time of someone who spent 12 years in school every single time you have anything at all wrong with you.
4. Remove the 3rd party payment system through government. If you want to go with an insurer for bigger emergencies fine, but for 90% of your medical care, pay for it yourself! And actually ask how much the price is!

Those are just a few things to start with. As I've said again & again, there are thousands of government interventions in health care.

Now. What you can do instead of using government to force other people to take care of you, is to first set up conditions where prices come down through competition of services & goods as explained above - and also (if you even need it at that point) obtain private charity (as used to be much more common), or - and this is the part that you're going to have trouble understanding, you can realize that you won't predict the myriad of options in medical treatment & financing that an actually free market will produce.


The thing you really need to understand here is that the costs are going to keep going up until you have an open market for these things. So while you're complaining that insurance companies deny some people treatment (which is a far cry from saying that they won't get treatment by the way!), when you should understand that insurance companies are bound by cost limitations just like you are in your own budget. So instead of vilifying them, maybe you should start recognizing where the high costs come from.

Anyway - this was insanely long, I'm sorry to anyone else reading this. As it stands I have to end it here... Alice: You really, really need to take the time to understand what you're talking about. Especially when it comes to thinking through the actual logic and reality of what you're advocating. I get that you have some serious emotional attachments to your positions on this topic, and I feel for you - but emotion is a very poor substitute for reason.

Michael Ejercito|6.8.09 @ 11:40AM|#

King Drew

Alice Bowie|6.8.09 @ 9:25PM|#

Insurance is simply going to drop you...or, you won't be able to make the payments once you are sick. Free markets are great for everything...except when it comes to peoples lives.

Alice Bowie|6.8.09 @ 9:47PM|#

I'm not a pinko. I don't want this country to turn into CUBA.

We're probably best off just leaving things the way they are. In fact, perhaps we should let the conservatives idea of eliminating all government intervension in commerce. I'll just get rid of my $1,242 per month bill. I'll keep the money and when I get sick, I'll put the money in a mattress for my kids...and...I'll just declare bankrupsy. If they're not going to pay for anything and I die...the debt will die with me.

Sean W. Malone|6.8.09 @ 11:23PM|#

Free markets are especially great when it comes to people's lives Alice. In fact, that's kinda the whole point... You may have noticed that you don't live in abject poverty, squalor and you will likely live til you're 80. Don't be an idiot.

Also... What you're talking about is called a "Health Savings Account" and they exist now. Check them out.

And finally... How is it that you are unable to read a word I've said this entire time? $1,242 per month bills suck, guess what... If you actually had a free market in medicine the costs for doctor visits, hospitals, drugs and everything else that bill is going towards would be ten times cheaper. Do you seriously not understand how that would benefit you directly? I mean honestly Alice. Is it that hard to comprehend that the way things are right now is A. not what I'm advocating, and B. set up to make things more expensive... and that the policies you talked about above only make things worse?

Geesh.

Alice Bowie|6.8.09 @ 11:49PM|#

Then let's at least get rid of the insurance companies. And just make going to the Dr. just like going to get food. We need food to live...we'll die without it. And, if you don't have money for McDonald's...there's always the dumpster out in the parking lot, soup kitchens, and kind friends/relatives.

And, if you simply can't afford treatment, you just don't get the treatment.

Would you prefer this kind of system?

Why pay for health insurance. I've had two kids...costing a total of maybe $40,000 when all said and done. And you are probably tired of hearing it...but i pay around $15,000 per year in insurance...and have been paying that since the year 2000s. Now, had the extra money i paid had gone to some poor smuck that got sick...i guess i wouldn't feel so bad about it. It just went toward STOCK equity that ended up VANISHING in a mere two years. I mean the STOCK HOLDERs didn't even get to enjoy the excess premium I paid...It just all went to the exec.

Just get rid of those characters. Let those that can pay Dr. visits pay.

And look, I agree with you on one point. When I go to the Doctor, there must be 85 people involved besides the Doctor and his assitance. There's the billing department, the insurance judicator, the person check eligibility, the person checking the ICD-9 codes to see if the procedure is covered, etc.etc.etc.

Now, if you didn't have all of that crap...I'm sure the Doctors visit would be much much more affordable.

Alice Bowie|6.8.09 @ 11:56PM|#

To tell u the truth Sean...My real problem is my up-bringing. I had a christian up-bringing. Not that crazy stuff you see on TV. It was more the compassionate type. Where the virtues of charity were cherrished. Help you fellow man. Forgive. all that crap.

Today, I don't believe in any of that. But you know, i think it did me more harm than good. We live in a world that completely lacks compassion for anyone. And that christianity crap doesn't prepare anyone for the REAL world...where people really don't give a shit about anyone.

A world where we 'DO on to others...before they do it to U'

We'll ... nitey-nite Sean...i give up...and u do have a great argument.

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