Heal Thyself

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New at Reason: Ron Bailey looks at the ways we can take health insurance beyond the command economy.

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  1. “Currently Congress limits MSAs to only 750,000 Americans, and will permit no more to be established after the end of this year.”

    Isn’t this contrary to the 14th amendment? Any constitutional scholars out there?

  2. “Currently Congress limits MSAs to only 750,000 Americans, and will permit no more to be established after the end of this year.”

    Isn’t this contrary to the 14th amendment? Any constitutional scholars out there?

  3. “And, to beat the dead horse one more time, ceasing to enforce anti-market patent monopolies on drugs would drastically reduce costs.”

    And thus guaranteeing that no one bothers to develop new drugs.

  4. Kevin,

    Are you an Ithacan? I was myself, from 1994-2000. I rememeber back in the day when Ithaca Health was an offshoot of Ithaca Hours. But back then, coverage included setting broken bones, ambulance rides, and a little bit off of office visits. Very spartan.

    Neat link; thanks.

  5. There are two other issues that have not been
    discussed here but are important.

    The first important issue that is not addressed
    in Ron’s piece is measurement.

    The numbers reported by the Census Bureau
    are self-reports of health insurance coverage
    by respondents to the March Current Population
    Survey. This is not clear from the way the
    numbers are presented by the Census, which is
    not to their credit. It is well known in the
    economics literature that many respondents
    who report not being covered by health
    insurance are eligible themselves, or their
    children are eligible. These issues should
    have been highlighted by the Census folks.
    As a lot of folks are newly unemployed, the
    extent of this measurement error has likely
    increased in the last year. I am sure that
    this does not account for all of the increase
    but it likely accounts for some.

    Second, some of the increase in the non-
    insured results from individuals declining
    employer-provided insurance. At some firms,
    individuals can do this and take cash instead.
    These policies exist so that employees who
    already have coverage from their spouse do not
    have to “pay” for coverage twice. However,
    some individuals who take this option are
    just making a gamble that they will not get
    really sick. If you are 25 and healthy it
    is probably a good bet (put differently, the
    insurance is not actuarially fair for such
    persons).

    The press has really done a bad job of
    reporting these numbers – something that
    would make the topic of a nice reason
    article on the interaction between science,
    politics and media, something I know is
    close to Nick’s heart.

    Jeff

    P.S. I know I have seen a nice paper on just
    this issue recently, but can’t find it. A
    useful paper on a closely related issue, that
    cites some of this literature, is by Tom
    Delaire and Helen Levy of the Harris School
    of Policy Studies at Chicago. You can find
    it at nber.org (but it will be five bucks if
    you are not in the club) or at Prof. Levy’s
    page at:

    http://harrisschool.uchicago.edu/faculty/levy.html

  6. I liked the article, and agree with most the suggestions. However, it seems that there is no suggestion for the poor/unemployed/elderly.

    yeah, i know some of your first reactions will be to say “screw ’em”, but I seriously doubt that the American government would begin to ignore these peeople. “universal healthcare” in theory is not in itself a bad thing, as it simply means that everyone will have healthcare. now, how everyone will be provided with healthcare, namely the funding, is where i would imagine the disagreement begins.

    so, considering that America will help the poor/unemployed/elderly, what is the most “libertarian” way for this to reasonably be implemented (don’t tell me charitiable donations cause it won’t happen)?

  7. Well, the first thinkg we could do for them would be to stop require health insurers to always cover the best, most up-to-date, most expensive treatments. That would bring the cost of health insurance back into reach of many such people. Lower-cost plans could offer lower-cost coverage — this is impossible in most states today.

    Of course, it would put the best, most up-to-date, most expensive treatments out of the reach of some people. But that is inevitable anyway: Expensive treatments will continue to be developed, and making them universally available will become an ever-greater expense. There is no bound on this process.

    Another thing that would help would be to examine why the same treatment costs less when obtained through insurance than out-of-pocket — out-of-pocket payers are in effect subsidizing insured payers (and both are subsidizing non-payers). If out-of-pocket costs were in line with insurance-paid costs, then the young and healthy might elect to save money by paying out-of-pocket or by buying catastophic-care-only policies.

    In the worst case, it might prove necessary to take the non-libertarian solution of breaking the insurance-industry monopsony by require hospitals to charge all payers the same for the same treatment. But this might be avoidable — I’ve not seen any serious analysis of the issue, which touches on the risks of non-payment and on HMO malpractice arbitration and other such things. It is possible that cleverly constructed healthcare-buying-cooperatives could serve the same cost-reduction role as health insurers for the uninsured.

    Of course, both of these solutions would fly in the face of the drive toward absolute-uniform-insurance-for-everyone, and therefore will never happen. But one can dream.
    –G

  8. How about ways to encourage citizens to live healthier lives? I know local governments can theoretically try to do this by doing things like building parks, providing recreation services, and such. As a Libertarian, I hate to ask this, but are there things the government can do, on more of a macro level, to provide incentives for healthy living? Maybe a better question would be, are there things the government is currently doing that prevent or impede healthy lifestyles that the government should cease to do?

    The other thing I would add is that an ounce of prevention is worth a pound of cure. Find a way to encourage or incent citizens to use preventative measures on their bodies and their health.

  9. Quite a few of you bring up good points.

    1) the cost of healthcare insurance
    the most interesting way i’ve seen a government entity in the US lower the cost of healthcare to the consumer is the Oregon plan. I don’t live there, so I only know it in theory – in other words if you know dirt, please share.

    but, what they did is created an agency like Consumer Reports that evaluates prescription drugs based on price and efficacy. they release a journal to doctors to inform them of the most cost-effective recommendations they can give their patients, holding quality of care steady. the idea is to counteract the drug company funded journals that typically promote patented drugs over generics.

    why do i like it so much? it negates one of the arguments against libertarianism – that the consumer is not fully knowledgable to make necessary decisions without 3rd party (government) intervention. government providing the knowledge solves that loophole, while still allows private industry to provide the service.

    A good overview by PBS’s Frontline here

    2) Healthier lives
    Honestly, when casket sizes are increasing, and so are the size of football stadium seats, it may be time to take note.

    it really gets to me that americans think taking a low-cholesterol pill will counter-act their cheeseburger. these things should only be taken if diet and exercise do not work! additionally, i wonder why all the ant-acids are so popular?…quit eating shitty, refined, fatty foods!

  10. Grant Gould and Keith,

    For an example of how a “silver standard” of insurance might be organized, check out this:
    http://www.ithacahealth.org

    It still covers only a relatively small range of illnesses; but the larger the membership, the more they can expand coverage. Many will object about the unegalitarian nature of health insurance that excludes the most expensive, high-tech treatments; but guess what? Under any form of “public” health insurance, you’ll get the same thing under the guise of rationing access to the most expensive services: long waiting lists, with people who can’t afford to spend their own money often dying in the meantime.

    And, to beat the dead horse one more time, ceasing to enforce anti-market patent monopolies on drugs would drastically reduce costs.

    Brad S,

    I’m surprised more HMOs don’t mandate regular checkups and cover preventive medicine. And at the risk of raising some hackles, medical licensing board “standard practices” and FDA restrictions on nutritional medicine are a way of excluding competition from partial substitute technologies, and thus giving monopoly profits to mainstream white-coats and the drug companies.

    Brady,

    Here’s another of my dead horses I’m going to give a whack or two:

    “Public” health insurance is a subsidy to big business. On Labor Day I heard Gep Dickheart’s spokesman, Jim English, outline Dickheart’s healthcare plan of mandatory employer coverage with a 60% employer tax credit for costs. English said it would end the competitive advantage of smaller companies that were less likely to be covering their employees today, and reduce the competitive advantage of big corporations in countries with a national health service, that don’t have to cover their own employees.

    Like most examples of corporate liberalism, “public” health coverage is a way of cartelizing certain personnel costs through the State so they don’t become a matter of cost competition between firms.

    It’s a pretty close parallel to the big business motivation behind the Meat Inspection Act, as described by Gabriel Kolko in *The Triumph of Conservatism*. Despite the official “Upton Sinclair” version of the story, as propagated by Art Schlesinger and the government schools, the main backers of the legislation were the big meat packers. The government had already, at their request, instituted an inspection regime for packers in the export trade, in order to provide a government seal of approval and counteract the effects of some nasty tainted meat scandals (Armour) in Europe. The problem was that mainly larger packers exporters, so the small packers not covered by the inspection regime had a competitive advantage. The MI Act brought the whole industry under the same regime, and thus secured the market shares of the largest producers. The meat packers viewed Sinclair as a useful idiot.

  11. Health care is half the problem, the other shoe being retirement. Given today?s job market, where young workers change employers about as often as they buy new underwear, why should either retirement or health insurance be tagged onto where you work? Other than to keep vast numbers of HR personnel employed, that is.

    How about a system where when you have children you go to someone like Merrill Lynch or Morgan Stanley, or your bank, and set up a Universal Retirement Account for them. Health insurance would be included as one of the choices. Then, however you get paid (including wages, self employment, inheritance, gambling winnings, unemployment, court judgments, or finding a $20 on the sidewalk) you could contribute to the account under the same tax rules.

    When you change jobs, you just tell the payroll person where to direct deposit your retirement/health insurance contribution, along with any company contribution. They could even take care of the Social Security and income tax calculation, since they would know about all your income and wouldn?t have to fool with one W-4 to offset income earned from self-employment, etc.

    You get a permanent plan, the financial institution has a stable customer, the government gets better managed accounts, and the business avoids all the hassle of making your retirement and health decisions for you.

    The only ?down? side is that the folks who manage those huge pension funds that belong to nobody wouldn?t be able to buy private schools with them.

  12. Kevin,

    when did i promote public, universal health care??

    perhaps you need to re-read my comments. the only thing of the such i ask is how do we deal with the poor/undemployed/elderly.

  13. Brady,

    “‘universal healthcare’ in theory is not in itself a bad thing, as it simply means that everyone will have healthcare.”

    I interpreted that as an endorsement of government-funded universal coverage. Is that inaccurate?

    Keith,

    Nah, I just stumbled across it through a web-search, after Jesse Walker posted a link about the guy who started Ithaca Hours. It’s still a pretty spartan program, but like they say, the larger their membership, the better it gets.

    Sebastian,

    How much of the cost of developing drugs is a redundant and overblown FDA testing regime? And about half of the R&D money comes from taxpayers–in fact, some of the most lucrative drugs were developed *entirely* at taxpayer expense and then the patent rights given away to a drug company. Besides, a lot of much cheaper nutritional stuff is currently neglected because of the drug-industry dominated standards of practice enforced by the medical boards. How about St. John’s Wort as a replacement for some anti-depressants, B-6 as a mild anti-hypertensive, Coenzyme Q-10 for CHF, etc.?

  14. I could more or less live with the present system if they did the following:

    a) make it portable from employer to employer (and periods when you are self-employed)

    b) leave the deductibles EXCEPT when it comes to health care checks, etc. This should be a no-brainer. If insurance companies provide an incentive (or at least don’t penalize them) for people to get check-ups consistently, the greater the chance that something wrong will be caught early and less money will be spent by all.

  15. Kevin,

    all i meant by universal is a that everyone would have coverage, not how the coverage would be given. by the same means, i could say that ideally everyone would be employed.

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