Politics

The Case for Real Health Care Competition

ObamaCare will restrict choice, not expand it

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"Choice, competition, reducing costs—those are the things that I want to see accomplished in this health reform bill," President Obama told talk-show host Michael Smerconish last week.

Choice and competition would be good. They would indeed reduce costs. If only the president meant it. Or understood it.

In a free market, a business that is complacent about costs learns that its prices are too high when it sees lower-cost competitors winning over its customers. The market—actually, the consumer—holds businesses accountable and keeps them honest. No "public option" is needed.

So the hope for reducing medical costs indeed lies in competition and choice. Today competition is squelched by government regulation and privilege.

But Obama's so-called reforms would not create real competition and choice. They would prohibit it.

Competition is not a bunch of companies offering the same products and services in the same way. That sterile notion of competition assumes we already know all that there is to know.

But consumers often don't know what they want until it's offered, and their preferences and requirements change. Businesses don't know exactly what consumers want or the most efficient way to produce it until they are in the thick of the competitive hustle and bustle.

Nobel laureate F.A. Hayek taught that competition is a "discovery procedure." In other words, the "data" of supply and demand emerge only through the market process. We need open-ended competition not merely to see which rival is better, but to learn things we didn't know before and aren't likely to learn any other way.

"Competition is valuable only because, and so far as, its results are unpredictable and on the whole different from those which anyone has, or could have, deliberately aimed at," Hayek wrote.

Well-meaning politicians have created untold misery by assuming they and their experts know enough already.

The health care bills are perfect examples. If competition is a discovery process, the congressional bills would impose the opposite of competition. They would forbid real choice.

In place of the variety of products that competition would generate, we would be forced "choose" among virtually identical insurance plans. Government would define these plans down to the last detail. Every one would have at least the same "basic" coverage, including physical exams, maternity benefits, well-baby care, alcoholism treatment, and mental-health services. Consumers could not buy a cheap, high-deductible catastrophic policy. Every insurance company would have to use an identical government-designed pricing structure. Prices would be the same for sick and healthy.

In this respect, it wouldn't matter whether or not Congress created a "public option," a government insurance plan. In either case, bureaucrats would dictate virtually every aspect of the health-insurance business.

What Obama says in favor of a public option—as of today, at least—tells us how little he understands competition. The public option's virtue, he told Smerconish, is that "there wouldn't be a profit motive involved." But as St. Lawrence University economist Steven Horwitz writes in The Freeman magazine, profit is not just a motive. Profit (along with loss) is what enables competition to perform its discovery role:

"Suppose for a moment that we try to take the profit motive out of health care by going to a system in which government pays for and/or directly provides the services. … (P)ublic-spirited politicians and bureaucrats have replaced profit-seeking firms.

"By what method exactly will the officials know how to allocate resources? By what method will they know how much of what kind of health care people want? And more important, by what method will they know how to produce that health care without wasting resources? … In markets with good institutions, profit-seeking producers can get answers to these questions by observing prices and their own profits and losses in order to determine which uses of resources are more or less valuable to consumers. … (P)rofits and prices signal the efficiency (or lack thereof) of resource use and allow producers to learn from those signals."

Profit is the key to competition. Anyone who claims to favor competition but looks down at profit has no idea what he is talking about.

John Stossel is co-anchor of ABC News' 20/20 and the author of Myth, Lies, and Downright Stupidity. He has a blog at http://blogs.abcnews.com/johnstossel.

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  1. That's quite a mild article (from what I skimmed). I can't wait to see people blow up over how crazy the claims are. I'd at least like to pre-empt some of the haters and say:

    "We've tried pro-market before! Clearly it isn't working!!!"

    If you think what we have now is a "free" market, you have to be kidding yourself. Relatively free? Maybe. Free enough to do it's job right? Clearly not.

  2. Write your congresscreature and ask them to support H.R. 1427/S.726?. The government has caused a market distortion that leads to incredibily high monopoly prices for biologic drugs. There is no pathway for generics for "safety" reasons.

    It's stupid, and it needs to change.

    BTW...Ron Paul is a co-sponsor.

  3. "John Stossel is a pathological liar"

    Fuck, i should not have clicked on that link. The sidebar with all the tributes to Teddy alone made me gag.

  4. Thanks for the warning, X.

  5. That link should be called "I'm a dumbass. Please buy my book."

  6. Voice of Reason,

    First argument -- why not raise the minimum wage to $100/hour then if raising the minimum wage doesn't hurt those on the cusp?

    Second argument -- women don't make the same wages for the same jobs? So a job title means doing the same job? Same responsibility? I think there is still some to learn in this area, and I'm certainly OK with women making the same as men. The value is in work, not having a penis.

    Third argument -- the article mentions 923 peer reviewed articles that say global warming is real and manmade. Beside not answering whether there's anything we can do about it now OR if we even should, the article doesn't mention any articles even exist that have been peer reviewed with a contrary message. I wasn't able to get to the website, but here appears to have a list of papers that fit that description. Without a relative number, it's difficult to understand the size of both sides to understand if scientific consensus has truly been reached. So it seems too one-sided to not add a number for the other.

    As you can see, it's not as easy as just calling him a pathological liar and being able to dismiss all of his claims as lunacy. Do you have anything to add about this article, O' Voice of Reason?

  7. I clicked the link. I'm no pussy, even if my name ain't "Xeones".

    😉

  8. FTA: "Competition is not a bunch of companies offering the same products and services in the same way."

    This "pathological" tidbit, well-known to free-marketeers, needs greater emphasis in the debate.

  9. This is your brain.

    $%^**% ^*(*)wee!

    This is your brain on John Stossel:

    ___________________________________

  10. Rush Limbaugh offered himself some kudos Wednesday for predicting in March that the health care bill wouldn't be passed before Ted Kennedy's death.

    "Before it's all over, it'll be called the Ted Kennedy Memorial Health Care Bill," Limbaugh said at the time.

    Indeed, with Kennedy's passing, Sen. Robert Byrd (D-W.Va.) has called for health care reform legislation to be named in his honor.

    Limbaugh, who was criticized for his insensitivity over the Kennedy remarks, is expressing vindication. "I predicted it, and I caught all kinds of grief for it out there," he said.

    http://www.huffingtonpost.com/2009/08/26/limbaugh-congratulates-hi_n_269711.html

  11. "Indeed, with Kennedy's passing, Sen. Robert Byrd (D-W.Va.) has called for health care reform legislation to be named in his honor."

    Be funny if they do and it fails to pass.

  12. "Be funny if they do and it fails to pass."

    Unlike Kennedy. 😉

  13. If they do that, Ron Paul should introduce a bill to reduce government regulation of health insurance and call it the Mary Jo Kopechne Memorial Health Care Bill.

  14. Hooray for John Stossel. Sure there's easy pickings if you want to take pot shots at him. But he's delivering the Good News to the masses. More than you can say about anyone else since Milton died.

  15. Why does John Stossel hate America?

  16. "This is your brain on John Stossel:

    ___________________________________"

    Liberals' brains have the same reaction regardless of whatever it is that attempts to make them think.

  17. How could the impending destruction of The USD and the current size of Government not be good news?

  18. We seem to talking right past the proponents of Obamacare. Just about everyone of them I've talked to will eventually get to the "free rider" argument. This is, of course, a valid argument that libertarians have made much use of!!! Take catastrophic insurance - "Sure, we let John Doe buy it, and then when he crawls to the emergency room with poison ivy, the taxpayers have to pick up the tab when he won't." Free Riding is a real problem. Libertarians address it by "user pays" kind of arguments. "You buy a cheap car and it breaks down, you pay for the repairs." "You jump on board the Amtrak and you pay the full cost of your ride." However,
    as you are all aware, it doesn't work that way with health care because everyone has a "right" to treatment whether they can pay it or not. So we really need to deal with the "right" or "special advantage" question instead of dealing with the minutia of what the qualtiy of life assessment really means or what's the difference between government option and co-ops.

  19. Hey Creech,

    Everything you said makes sense, but one question. How do you propose to argue rights to a society with entitlements? People assume they are entitled to a retirement,an education, why not healthcare?

  20. Kennedy didn't kill anyone, Mary Jo simply died while on the Kennedy-imposed waiting list for rescue. Much like you will waiting for KennedyKare if it passes.

    Yea, name the bill after someone its opponents can charge with manslaughter. I dare you.

  21. Choice, competition, reducing costs-those are the things that I want to see accomplished in this health reform bill

    Perfect BO, that is exactly what John Mackey itemized and advocated in his now infamous Wall Street Journal article. Have him over for a beer to fill you in. Problem solved.

  22. Indeed, with Kennedy's passing, Sen. Robert Byrd (D-W.Va.) has called for health care reform legislation to be named in his honor.

    You have to admit, that is a good name for a bloated, incoherent bill that burdens America for generations to come.

  23. It's too bad Obama isn't very bright and instead is a complete and total moronic cunt.

  24. First argument -- why not raise the minimum wage to $100/hour then if raising the minimum wage doesn't hurt those on the cusp?

    Why not a trillion/hour? Zombies like Voice of Reason have to have it pounded into their skulls. Stupid fuckers.

  25. John Stossel is a Pathological Liar link was funny. I read it through the 2nd Paragraph where I realized that Sirota was suggesting minimum wages don't hurt the poor and then I realized his understanding of economics is less than that of a 4 year old and stopped reading.

  26. Seriously - anyone who can't understand basic arithmetic like:

    If employer X has $100 per hour to employ workers, at $5 an hour he can offer 20 jobs. If gov't mandates minimum wage at $10 an hour he can only offer 10 jobs.

    ...is more retarded than is worth talking to.

  27. Seriously - anyone who can't understand basic arithmetic like:

    If employer X has $100 per hour to employ workers, at $5 an hour he can offer 20 jobs. If gov't mandates minimum wage at $10 an hour he can only offer 10 jobs.

    ...is more retarded than is worth talking to.

    You don't understand the economics of an employers payroll Sean. You see, while on the surface your analysis is 100% correct, you're missing the deeper issues.

    One, the theory goes that while employer X only has $100 per hour now, business will increase because his customers are now making a higher minimum wage and can afford to buy more products, so it offsets.

    The reality is that these dipshits think payroll is actually paid with pixie dust and unicorn farts.

  28. Oh, I understand the argument Tomcatt.... I just refuse to acknowledge that pixie dust & unicorn farts are legal tender.

  29. Sean W. Malone | August 27, 2009, 1:45pm | #
    John Stossel is a Pathological Liar link was funny. I read it through the 2nd Paragraph where I realized that Sirota was suggesting minimum wages don't hurt the poor and then I realized his understanding of economics is less than that of a 4 year old and stopped reading.

    Ah, come on now. Don't be too hard on the Huff-in-tatas... They've really been rubbing their collective's net 2 brain cells together fervently over the last few months...

  30. One, the theory goes that while employer X only has $100 per hour now, business will increase because his customers are now making a higher minimum wage and can afford to buy more products, so it offsets.

    I suppose there might be some truth in this... Those that are on minimum wage working for Mickadees could probably only afford to eat at Mickadees. Assuming they want to eat out, I suppose that if their minimum wage is increased slightly, they could spend an extra dollar at McDonald's per visit or something like that.

  31. "Those that are on minimum wage working for Mickadees could probably only afford to eat at Mickadees. Assuming they want to eat out, I suppose that if their minimum wage is increased slightly, they could spend an extra dollar at McDonald's per visit or something like that."

    Except that we still have a bunch of people left out of this game of musical chairs entirely who are unemployed. And of course, we have the problem of entropy in the loop...

    Employer collects $100 in revenue, pays $50 on wages. Employees use $25 to buy what employer sells. Employer collects $25 in revenue, pays $12.5 on wages...... You see that the direction we're headed on this one is epic failure.

  32. Tomcat1066,

    Your argument rests on two assumptions: 1) that people earning minimum wage are more likely to consume their raise in pay rather than save it; and 2) that the employer's business is patronized by enough people who earn minimum wage to where a boost in minimum wage will equal a boost in revenue.

    Moreover, however, your argument fails to consider the net economic impact of the jobs lost and how that will affect the a household's purchasing power.

    Finally, from the perspective of a business owner, it's far more expensive to hire qualified people than it is to fire them. Once those positions are eliminated, there's a strong chance they won't be coming back for a good, long while...

  33. Holy shit folks. I'd have thought the part about funding with pixie dust and unicorn farts would have shown that my whole damn post was a joke.

    I've heard bullshit like that, but don't believe a word of it.

  34. Stossel ignorantly assumes that the health insurance cartel that exists now can be transformed into a free-market bid/ask system.

    Stossel probably thinks OPEC is a free-market as well.

    Why should Geraldo Rivera-Stossel be taken seriously? He should go back to 20/20.

  35. "President Obama told talk-show host Michael Smerconish last week. Choice and competition would certainly be good, writes John Stossel. They would indeed reduce costs. If only the president meant it. Or understood it."

    Obama understands exactly what he is doing. He is just lying about what he is doing.

    It is not "healthcare reform", it is not "health insurance reform".

    It is a new welfare/entitlement program designed to get even more people dependent on government than is currently the case and engage in massively increased levels of wealth redistribution.

  36. I'm not sure how you nullify The Economic Law of Marginal Productivity. As for minimum wage laws, my understanding is that if we were on a Rule Monetary System instead of an Authority Monetary System, you would have falling prices year after year in most parts of the economy?

  37. Stossel ignorantly assumes that the health insurance cartel that exists now can be transformed into a free-market bid/ask system.

    Not without dramatically reducing the cartel protections instituted by various levels of government, no.

  38. "Stossel probably thinks OPEC is a free-market as well."

    Considering Stossel is the one pointing out that cartels aren't representative of a free market... I'm a little confused why you would make that assumption Shriek. Governments create & enforce cartels, not markets.

  39. RE: "Competition is not a bunch of companies offering the same products and services in the same way."

    Actually, having identical outputs that are completely interchangeable substitutes for one another IS one of the preconditions for perfectly competitive markets.

  40. "Rule Monetary System instead of an Authority Monetary System, you would have falling prices year after year in most parts of the economy?"

    Assuming some agency wasn't inflating the currency or destroying stuff (eg: Civil War), YES.

    I'm actually in the middle of creating a graphic right now which shows the relative value of the dollar from 1800 to the present. Between 1800 and 1850, the value of the dollar doubled. $1 bought you $2.00 worth of stuff relative to the baseline worth of 1800 dollars. The Civil War wiped out the gains, but it never dipped below $0.96, so basically as much destruction as the US Civil War caused, it only brought the currency back to where it started. By 1900, we were back up to $2.04...

    Today... We're at NINE CENTS.

    That's a 90% drop from where we started in 1800, but a 95+% drop from where we were just 100 years ago.

    Thanks Federal Reserve!

  41. Consider the Big Pharma cartel that uses the FDA to crush competition.

  42. "Actually, having identical outputs that are completely interchangeable substitutes for one another IS one of the preconditions for perfectly competitive markets."

    This doesn't make any sense at all BH. In no competitive market are all outputs "identical" and it would be a ridiculous precondition to assume. You don't want identical outputs, you want variation. A burger is not the same at BK as it is at In & Out which is not the same as it is at Nobu. There'd be no point if outputs were identical - in that case, may as well have government provide everything.

  43. I should probably say it's a 195+% drop in the value of the dollar from where we were 100 years ago if you count anything above the 1800 $1 baseline as an increase.

  44. Consider the Big Pharma cartel that uses the FDA to crush competition.

    Precisely - and they use the taxpayer funded NIH for R&D and then used the Republican Party to fix prices for their plum customer group and to prohibit free-trade to/from other NAFTA members.

  45. J.Q.P. | August 27, 2009, 2:49pm | #
    Consider the Big Pharma cartel that uses the FDA to crush competition.

    You mean the ones that signed onto ObamaCare?

    See, they care. They don't want to make money. They're sticking up for the little guy. /s

  46. I'm actually in the middle of creating a graphic right now which shows the relative value of the dollar from 1800 to the present.

    What's your baseline; value of the dollar relative to what?

  47. Precisely - and they use the taxpayer funded NIH for R&D and then used the Republican Party to fix prices for their plum customer group and to prohibit free-trade to/from other NAFTA members.

    And? This is exactly why current reform legislation proposals are taking us in the wrong direction. They increase the cartelization. They increase the gain to large corporate interests from working with government. And they decrease the chance that competitors of those large corporate interests will displace them from their favored politically protected economic position.

  48. This doesn't make any sense at all BH. In no competitive market are all outputs "identical" and it would be a ridiculous precondition to assume.

    Actually, he is right.
    http://en.wikipedia.org/wiki/Perfect_competition

    It's a simplifying assumption you make when looking at a market. If you are looking at a commodity market, its an ok assumption. Looking at something like Healthcare, its probably pretty bad. Even if all outputs are the same, having the market do it is still more efficient than having government provide it due to the incentives present in a market.

  49. FREE MARKET IS THE SOLUTION

    The Federal Government lacks any authority to preach fiscal responsibility. It has exhibited none in my lifetime and has reduced the wealthiest nation on the planet to world's biggest debtor nation.

    But Ma and Pa citizen have had to balance a checkbook their entire lives. The solution is to return control of health care spending to them.

    Pass a law making it illegal for an employer to offer health insurance as an employee benefit. End wage stagnation and give employees raises instead.

    Doing away with group health insurance and forcing insurance providers to compete for individual business will permit cost conscious Ma and Pa to shop for the best deal, like they do auto insurance. Then the free market will bring costs under control!

    FEDERAL GOVERNMENT LACKS AUTHORITY OVER HEALTH CARE

    The first step toward Universal Health Care must be an Amendment to the Constitution. Providing universal health care is not one of the enumerated powers of the Federal Government.

    For The General Welfare:
    1. International and interstate commerce (trade)
    2. Naturalization
    3. Bankruptcy
    4. Coin Money, establish its value
    5. Weights and Measures
    6. Punish counterfeiting
    7. Postal Service
    8. Issue patents and copyrights
    9. Establish Federal Courts
    10. Govern District of Columbia
    11. Purchase real estate for necessary buildings

    See Illegal Health Reform by David B. Rivkin Jr. and Lee A Casey: Illegal Health Reform: http://www.washingtonpost.com/wp-dyn/content/article/2009/08/21/AR2009082103033.html

    Bring John Shadegg's 'Enumerated Powers Act' to a Vote
    It's time for Congress to, "Cite it, chapter and verse." Where do they derive their authority? When they pass new laws or spend taxpayer money, they should be required to point to specific language in the Constitution. The Enumerated Powers Act would require them to do precisely that. Help us bring this bill to a vote.

  50. Pass a law making it illegal for an employer to offer health insurance as an employee benefit.

    Two wrongs don't something something.

  51. Do the Dems really think naming legislation after uber-liberal Ted Kennedy is going to get most Americans on board all of a sudden? Very wishful thinking on their part. Maybe they suspect the plan is dead anyway, so they might as well throw a bone to their delusional base that loves him.

  52. Maybe they suspect the plan is dead anyway,

    Yet another reason to name it after Teddy.

  53. "Actually, he is right.
    http://en.wikipedia.org/wiki/Perfect_competition"

    Perhaps i should have said that the "perfect competition" model in neoclassical Keynesian dumb-ass macro-economics makes no sense.

  54. Explain to me why half the people who keep coming over here offering "free market" solutions say:

    "Pass a law making it illegal for an employer to offer health insurance as an employee benefit."

    ????

  55. Hey Sean W,

    Could I get a copy of that. and Could you give me anything for 1877-1897 in particular??

  56. Sean,

    Many people offering "free market" solutions insist on passing laws outlawing employer based healthcare because it ties you to that employer.

    Let's assume we do not have the public plan or universal government coverage. Let's assume we had the FREE MARKET Health Care that everyone wants. There would be nowhere to go once you got a stroke and lost your job.

    There would be no mandates or regulations on insurance companies. So, they can charge whatever they want. And deny coverage for whatever they want.

    Since most people are NOT sick, they'll charge the market rate. Once one is sick...they will become uninsurable.

    With the Free market . If you are healthy and working...yea, insurance will be cheap.

    If you have diabetes, history of disease, and disabled to the point you can't work...you will be uninsurable.

  57. And nor will you be able to afford insurance.

  58. Many people offering "free market" solutions insist on passing laws outlawing employer based healthcare because it ties you to that employer.

    The state doesn't need to outlaw employer provided health insurance. It merely needs to remove the state-imposed incentives that favor it. The state should either fully tax such employee benefits as income, or -- if it feels the urgent need to subsidize people's health care -- it should provide exactly the same tax benefits to individuals. You would rapidly find health insurance becoming employee-owned and employee-managed, much as the 401(k) tax loophole induced companies and employees to convert pensions to portable individual retirement accounts.

  59. Sean,

    We've argued a lot on this point. You may be happy 2 know that i no longer support the single payer solution. I'm totally convinced that the Single Payer Solution will destroy the health insurance industry and cause millions of people to be out of work.

  60. Sean W. Malone,

    Is your data much different from the CPI data that you can see at Measuring Worth?

    That still doesn't get to the heart of things. Before 1913, except for wartime paper, you're mostly measuring the value of things against the value of gold. After 1913, it's the value of things against the value of whatever the Fed says a dollar is.

    What's really interesting is, say, the value of things against the value of an hour's wage. I don't know where to find exactly that, but the real GDP per capita graph comes close.

  61. The state doesn't need to outlaw employer provided health insurance. It merely needs to remove the state-imposed incentives that favor it.

    That would be a good idea MikeP. But why should health insurance be tax deductable at all?

  62. I don't think it should be. But you are the one bemoaning that it is unaffordable. Make it tax deductible or tax creditable and it would become more affordable.

    One other reason not to tax health insurance is that it would give government a huge new pile of money with which they would probably try to do something stupid like subsidizing universal mandated insurance.

    Bottom line, I'd like to see employer provided health insurance taxed as income, with the taxes going straight to covering the deficit.

  63. MikeP and Sean:

    What would you do with people that get sick and have no insurance?

  64. Considering where we are now and where Obama and Congress are trying to take us, I would be delighted if everyone accepted that government will have to supply some minimal basic health care to some people.

    It could be done by subsidizing the consumer and placing them into the market -- namely, vouchers for the poor and those with preconditions.

    It could be done by supplying government payment for health care for the poor via Medicaid or free clinics or the like.

    But the bottom line here is don't screw up health care for the 75% who can take care of themselves when the problem is the 25% who can't.

  65. These vouchers would be paid by who ?

  66. Out of the general fund, like any other welfare.

  67. LeeJoe:

    You can get a copy of it when I'm done - but you'll have to give me an email address.

    Alice:

    1. My point was that it's not a "free market" solution to BAN something else.

    As MikeP said - there's no reason to ban anything, just even out the tax incentives and allow proper competition. The employer/insurance thing is entirely a creation of previous government interventions as we've covered hundreds of times, remove those interventions and things will self-correct.

    Also, a really good solution is the one offered by John Mackey and others - Health Savings Accounts for incidental, every-day checkups, doctors visits & prescriptions, etc. coupled with high-deductible catastrophic insurance that only gets used in the case of serious illness. This coupled with the myriad other reforms I have suggested over the last several months will drastically lower costs across the board and thus make many millions of people much more easily insurable and have greater access to care.

    Couple that with eliminating the stranglehold on supply of doctors controlled by the AMA and allow people the freedom to contract alternative treatments at their own risk (reducing the power of the FDA), and you have a system in which market forces are allowed to actually drive costs down & quality up like they do in every other relatively free industry.

    Big gains in production = Massive gains in access to average people.

    At that point, I find it nigh inconceivable that the remaining population who was truly too poor to afford either basic care or insurance wouldn't be able to be entirely covered by charities, family, friends and free clinics.

    IF we did everything I have advocated, and still there is a significant number of people without access to care, the government *might* be justified in setting up a voucher similar to food stamps. Choice and price mechanisms are still preserved and yet we manage to create a "Safety Net" like so many people afraid of freedom demand.

  68. There's lots of comparisons between medical cost per person in the US and Europe/Britain. We're at 6k per person, and they're at 3k per person or something like that. Why not compare people 65 and over. Over here they're covered by Medicare, and over there by the government -- both government institutions. Anyone have statistics?

  69. Sean W. Malone,

    After one gets cancer, they cannot get health insurance...not even at $10,000 per month. They would not be covered for cancer. They would end up in the emergency room anyway.

    I also agree with the guy that said earlier that people with High-Deductible Catastrophic Insurance would just go to the emergency room as a 'John Doe' and demand treatment for major (not catastrophic) treatments such as a broken arm, burns, sprains, severe colds, etc.

    How does any of this repair the current fiscal crisis that the current healthcare system creates?

    Who would pay for the free clinic? Who would pay for the vouchers? If the answer to these questions is THE TAX PAYER...That's just another word for 'THE PUBLIC PLAN'.

  70. I'm not for Single Payer Solution.

    A government plan with NO additional mandates should not hurt Aetna. It would just be a place where people can go and pay for health insurance once they are NO longer insurable. I just don't see a problem with this.

    I know what people are afraid of...additional mandates on other insurers. I don't believe that the public plan (from what I've read) has anything to do with the other insurers.

  71. I don't believe the government is too hard to compete with. FedEx, UPS do a good job at it.

    The rich pay for private schools....They have NOT gone out of business. There are NO shortage of people attending Private Colleges as oppose to state/county colleges.

    The Government offers Treasury Bonds...We still have a healthy Bond Market.

    The government plan is NOT going to run the insurance companies out of business by offering a better plan.

  72. I don't believe the government is too hard to compete with. FedEx, UPS do a good job at it.

    I find the first class mail service of FedEx and UPS to be extremely poor. Is your experience different?

  73. I find the first class mail service of FedEx and UPS to be extremely poor. Is your experience different?

    They don't offer 1st class mail...and u know why.

    I don't believe that Obama's Plan for the Public Plan will restrict Private Insurance companies the way the Post Office does to FedEx/UPS.

  74. They don't offer 1st class mail...and u know why.

    Yes. I know why. Because government makes competition with government illegal whereever and whenever it deems it is needed.

    I don't believe that Obama's Plan for the Public Plan will restrict Private Insurance companies the way the Post Office does to FedEx/UPS.

    I believe that Obama's plan for health insurance reform will make it illegal to supply health insurance that does not meet the minimums set by the plan or higher minimums set by the state in which the beneficiary resides.

    In other words, it will make plans that do not do largely what the public plan does illegal, rendering "choice" and "competition" comical buzzwords.


  75. I believe that Obama's plan for health insurance reform will make it illegal to supply health insurance that does not meet the minimums set by the plan or higher minimums set by the state in which the beneficiary resides.

    I disagree...and is nowhere in the bill.

    You may argue that by creating a Public Plan private insurance companies will need to compete with the public plan...and that would be a good thing.

    I would STILL be willing to pay MORE for a PRIVATE PLAN where I didn't need to wait on long lines and get premium service from premium providers than go to a medicare/medicaid doctor/clinic...which is what the Public Plan will be.

  76. And so would many other Health, moderately Wealthy Americans with good paying jobs and no pre-existing condition.

  77. Alice - Charity is not paid by the tax payer, and you're not thinking this through properly.

    When cancer treatment costs 1/10th as much due to the massive improvements of productivity and as a result of actual price competition, then the cost to pay for treatment isn't that much of a problem. There's literally no reason that you should be assuming $10,000 a month to treat someone for cancer. The only reason you have that assumption is because that's roughly what you might be looking at under the current completely screwed up government distorted system - after 50 years of stifled "competition" and with government as primary payer mucking things up. I don't have the statistics on this off hand, but I would bet almost anything that the bulk of cancer treatment is paid directly by government. Regardless - the point is that you're starting the story assuming that there are no changes in price due to competition, and that's the whole point of introducing a legitimate market to begin with.

    If the cancer treatment drugs were widely available, to the extent that there was literally enough for everybody who has cancer - the price would be dramatically reduced per unit.

    Imagine you're an insurance company for a minute or two:

    Imagine that MikeP and I buy the same plan from you for $300 a month with a $2,000 deductible, ok? The plan covers cancer treatments, but right now, cancer costs $10,000 per month to treat averaging 10 months - thus the total cost to you, the insurer, would be $100,000 for MikeP or my cancer treatment, if we should get cancer.

    Not factoring in your overhead costs, or your salary as provider, profits or even routine, smaller scale care it might take... At $300 a month X 2 payers, it would take nearly 14 years for you to take in enough money from our paying in to the plan to actually cover the cancer treatment for just ONE of us.

    You are betting that we don't get sick, and you'd better be right... If you're not, you're immediately out of business.

    Now... Imagine that real competition entered into the picture here, and that brought the now-over inflated prices of medicine down, reducing the cost of cancer treatment by 50%.

    Suddenly, you have double the ability to pay for our treatments in the same time frame...

    I would like to give you more complex scenarios, but I just want you to realize that what we're talking about here is not the status quo.

    Prices in a competitive market don't just stay the same, so when you're considering a competitive free enterprise option in health care you shouldn't assume that the price of doctors salaries through cancer drugs through MRI machines stay static. They won't - they'll ALL come down, leaving much much much more money in the system for you - the insurer - to be able to afford to cover more procedures for more people. Likewise, it will mean that the burdens on private citizens for regular care comes down dramatically, and charities can pick up the slack.

    As for the idea that people would just go to the ER... That's silly...

    First, ER's, being first response & life or death - are necessarily in high demand, and thus can (and should) command higher prices for their services. It would be more expensive to go to an ER with a flu than it would to pay your local nurse say $100 for 20 minutes of her time and a shot. That solves that problem... I never said ER's should be free! They shouldn't be. They should be covered by everyone's insurance plans in emergencies, but doctors & nurses and everyone else working in Emergency Rooms deserve their fair compensation just like anyone else. I think ER's would and are necessarily more expensive for routine stuff... Problem right NOW is, people aren't paying for that out of pocket and they know it.

    Secondly, as happens now, when you go in to an ER you get triaged. Patients who are not in critical condition go to the back of the line... The goal is to treat as many real emergencies as possible - focusing on the most life-threatening cases. So the more life-threatening your condition, the faster service you get. Why would you wait 10 hours to get a flu shot or an antibiotic prescription? That's just a tremendously uncomfortable and unpleasant waste of everyone's time - and as noted above, an expensive one to boot.

  78. Stossel is right. I want a free market in the auto industry, too. I want a top-fuel powered dragster without seatbelts or air-conditioning that I can drive on the 405. Let the free market rule. Why should government intrude upon my right to drive as fast as I want?

    Oh yeah, it causes a hazard for everyone else around me. hmmm... I wonder if being 200lbs overweight causes any consequences beyond my own body? I'm sure my single coverage, catastrophic only insurance will cover my pre-existing condition and not require any tax payer money to keep me on a ventilator while my cardiopulmonary system fails.

  79. Sean,

    Believe it or not, in NYC's Columbia Presbiterian Hospital, the Emergency room is jammed up with people that don't have insurance. They go there for Asthma Pumps, Medication, and all sorts of stuff...and, these crazy people wait 5-10 hours.

    If i got hit by a cab in front of Columbia Hospital in NYC...I would take the same cab across the hudson river to NJ to a less crowded hospital.

    As far as waiting for the transition to happen...I hope i don't get cancer during that time.

    Dr's Salaries will not go down.

    In NYC, where there are a lot of affluent people, many many many of my Dr. friends do NOT accept insurance. You gotta pay them in cash.

    My friend, the Psychiatrist, charges $600 for the initial evaluation and $450 for every one hour visit afterwards. And, people pay it.

    My friend, the Dermatologist, charges $300 per visit...PERIOD.

    Neither one of them want to deal with the insurance companies. And, since they are BOTH in private practice, neither one wants to hire a $60,000/year administrator to deal with the paper work. They give you a bill with the ICD-9 code and the Treatment Code...and you can go play the games with the insurance...or not.

    This is the free Market you are talking about. It will NOT bring down cost. It will only create a multi-tier system where the wealthier people will get better care and the poor people will end up on some public plan anyway.

    Not that I'm against the free market or a multi-tier plan. We have it in NYC.

    The poor, stand on line for 10 hours in the Emergency room...courtesy of the tax payers. The rich, they pay as they go, and have the BEST NYC Doctors to go to. The middle class, have to deal with very very very frustrated Doctors that see 70 people per day and give you 90 seconds to talk to them...three weeks from now. Now, if I, a middle class person, call the same Doctor and Offer CASH...I can get an appointment THE SAME DAY.

    The free market is alive and kicing in NYC. And the cost keeps going up and up and up. In fact, as more affluent foreign people move into NYC...costs go even higher.

    This is something that nobody can fix...and probably shouldn't

  80. Sean W. Malone | August 27, 2009, 7:37pm | #
    LeeJoe:

    That's odd. The article posted around here yesterday bragged that HSA+catastrophic plans cut spending by a whopping ten percent or so: hardly "drastic" as you claim. HSA+C is not the solution to the spiraling cost problem, nor is is something those that disagree with you are particularly against.

    How about a single-payer HSA+C for everyone? Call it a compromise.

  81. Alice.

    There IS NO FREE MARKET IN HEALTH CARE.

    Please quit with that nonsense. I mean, that last post was just completely ridiculous.

    The fact that a psychiatrist can charge $300 per hour and doesn't want to deal with insurance is a consequence of the system AS IT IS RIGHT NOW.

    NYC's hospitals, just like every other hospitals are controlled by government in a thousand different ways.

    You always ask me questions like you want me to respond, but then clearly don't bother reading what I just fucking wrote. I said DO NOT MAKE THE MISTAKE OF THINKING THINGS AS THEY ARE - RIGHT NOW - WOULD BE THE SAME

    We have no free market in medicine and you know this damn well... Everyone does. What you just pulled out of your as was just stupidity.

  82. And Chad brings up the rear making the same damn mistake Alice just did!

    Mackey saves 10% on costs with HSA's & Catastrophic Insurance RIGHT NOW with no other changes, no increase in competition, no increase in market freedom, and no attempts to put patients back in the price feedback mechanism. There's still the AMA cartelization/unionization of doctors licensing, there's still no national competition of insurers, there has been no reduced cost of drug approvals by the FDA, there has been no reformation of malpractice or tort law... There's been no reduction in government skewing the market to all unrecognizable hell.

    The drastic reductions in cost are from doing ALL those things, not just from one company coming up with a smarter way to cover its employees.

    Why do I even bother with you... Fuck that was dumb.

  83. Are you guys really so dense as to not realize the difference between things as they are today, after 50 years of fuckery by the Federal Government, and things as they would be after a series of systemic changes returning health care to economic sanity??

    I have a hard time imagine anyone is incapable of this realm of thought.

    Government involvement in health care has systematically destroyed competition, stifled production, hampered any ability for new companies - not to mention new medical practitioners - to enter the market, thus causing shortages in supply in virtually every aspect of the chain from too few doctors & nurses, to shutting down/disallowing the new building of hospitals, to empowering a small number of giant companies to have regional monopolies over insurance, to imposing insane costs on developers of medical technology. In the same time period, they've artificially boosted demand for every service imaginable by handing out "free gifts" to consumers.

    I don't know how much simpler this could be!!

    Government has destroyed supply and radically boosted demand at a completely unsustainable price.

    That leads EXACTLY where we are right now... DUH. And most of the free-market economists in the 1960's warned about EXACTLY this. Shocking. Observations of reality and a little basic math are all you need to understand why this shit is fucked up, and yet instead of doing that, we've got politicians doubling down on the same retarded policy that got us here, only trying to expand it 10-fold.

    INSANITY.

  84. Sean W. Malone | August 27, 2009, 11:23pm | #
    And Chad brings up the rear making the same damn mistake Alice just did!

    Mackey saves 10% on costs with HSA's & Catastrophic Insurance RIGHT NOW with no other changes, no increase in competition, no increase in market freedom, and no attempts to put patients back in the price feedback mechanism. There's still the AMA cartelization/unionization of doctors licensing, there's still no national competition of insurers, there has been no reduced cost of drug approvals by the FDA, there has been no reformation of malpractice or tort law... There's been no reduction in government skewing the market to all unrecognizable hell.

    The drastic reductions in cost are from doing ALL those things, not just from one company coming up with a smarter way to cover its employees.

    Why do I even bother with you... Fuck that was dumb.

    Sean, the "savings" come from people consuming less, which may or may not be a good thing, depending on what they cut out. Now, if all your magical price reductions happened, would they consume less, or consume more, or consume the same? Who knows. Ask yourself this. The price of electronics has fallen dramatically in the last two decades. Do people spend more or less on them than they did back then? The answer is a lot more.

    And I agree with you about the AMA and tort reform, but they won't make a huge dent in the problem, which is the fact that ANYTHING THAT IS INSURED IS OVER-CONSUMED. The only way to "solve" this problem is to eliminate insurance entirely. HSA+C eliminates perhaps a third of insurance by turning it into private spending. This is not necessarily bad, but only solves a third of the problem.

  85. Sean W. Malone | August 27, 2009, 11:34pm |

    That leads EXACTLY where we are right now... DUH. And most of the free-market economists in the 1960's warned about EXACTLY this. Shocking. Observations of reality and a little basic math

    Sean, if you every left your computer and entered reality, you would realize that

    A: Even the most rational people depart drastically from homo economicus

    B: Numerous situations exist where rational individual decisions do not lead to optimal group outcomes.

    Your "little basic math" withers in the face of game theory and real people. Libertarianism is appealing to mathy geeks like you because it is internally self-consistent. It is also garbage, because its assumptions are not only wrong, but usually VERY wrong.

  86. Chad,

    If u eliminate insurance, you will put millions of people out of work.

    Sean,

    I just think un-doing 50 years is a lot harder than u think.

    I completely understand ur point. You think that if we just abandoned everything we have now and go free market...things will change. That change will take a long time. And, I'm not totally convinced that we will end up in the utopia you r professing.

    I just respectfully disagree.

  87. When cancer treatment costs 1/10th as much due to the massive improvements of productivity and as a result of actual price competition

    Ahh, Sean. Is THIS the kind of fantasy world you live in? A NINETY PERCENT cost reduction? HAHA FUNNY FUNNY. You aren't even in the right universe. Even if you eliminated every drop of overhead, the costs of the professionals that actually treat you are at least half the cost. So I guess they are going to have to accept 80% pay cuts to reach your magic target.

    If this is the kind of stuff you believe, you really are denser than I thought.

  88. Numerous situations exist where rational individual decisions do not lead to optimal group outcomes.

    Examples?

  89. Paying your taxes.

  90. Chad
    The trajectory of all free market technology for tha last 50 years has been ever improving quality for a lower price.
    A basic calculator 40 years ago cost $250
    now you can get one for $2.00. Thats 2% of the basline price before considering that the dollar is worth 15% of what it was 40 years ago.

  91. Chad, I'm saying that there's no reason that we can't have a 90% cost reduction on cancer treatment. No reason at all other than inhibition on productions. I can't tell you whether or not 90% would happen because I don't know if that's cost effective, perhaps the market doesn't require a 90% reduction to effectively meet demand.

    My point is that the economic question is fundamentally always and everywhere a supply problem.

    And your electronics example is pretty silly because as price has gone down, yes we've bought more of it, and we now spend more on electronics than we do on other things as a percentage of our income precisely because price has gone down in most every aspect of our lives - we now spend money on computers that we used to spend on different luxuries like self-cleaning ovens and color TV sets.

    Big deal.

    The "trade off" is that our standard of living has gone up immensely and our worlds have been populated with tools that never existed before.

    By contrast, in health care we're starting to see some stagnation in the tools and costs keep going up and up and up.

    As for "homo economicus" - it's only the Neoclassical guys who espouse that drivel Chad. Ludwig von Mises expressly rejected that notion 70 years ago. The ideas I'm talking about require people to be regular humans, nothing more. You don't need "perfect competition", you don't need "perfect knowledge" and you don't need people to be inhuman calculating machines. You just need them to act in what they perceive to be their own interest and make voluntary trades based on the assumption that they will benefit as a result. That is it.

    Homo economicus is an idiotic idea that is completely unnecessary in a discussion of free-market economics. It's only important if you're trying to come up with some nonsensical Keynesian econometric and that's never what I'm talking about... So how about we try not to confuse Keynesian & neoclassical ideas with Praxeology, huh?

    Anyway... It's funny how you challenge my "assumptions" without ever bothering to detail anything explicit except the above nonsense - which ISN'T one of my assumptions to begin with!

    The fact of the matter is, you and everyone else who yaps about costs without talking about supply are trying to ask & answer the wrong question. We already know what the best means of allocating resources is - it's a market with a functioning price system. There is nothing that can or will hold a candle to that... What you're missing though is that the problem is of a different nature entirely. The only reason we're struggling to get treatment to everyone who needs it is because we don't have enough of it.

    Even if price didn't come down significantly, a massive increase in production of health care providers and related goods would mean greatly increased access to all people. And isn't that the goal!?

    I thought the finish line here is getting quality care to the greatest number of people.

    Or am I missing something? Is the goal writing a law that "guarantees" care so that politicians can look good by spending other people's money? Cause that's how it's shaping up - all the while making promises that everybody already knows they can't keep. Not a single government plan I've seen even talked about yet does a damn thing to increase the ratio of supply::demand. They do the opposite.

    This isn't some arcane "theory", Chad - it's fucking common sense borne out by facts every day in every part of the world. Less stuff being chased after by more people = less access and higher cost. Always. Every time. No exceptions.

    This isn't solved by rearranging the distribution, and it sure as hell isn't solved by tightening your grip on suppliers.

  92. The beauty of freedom and individual choice coupled with a price mechanism is that nobody knows what's the "best" way to do things!

    ...Because... *gasp* there isn't ONE best thing for everyone.

    We all have different needs, requirements, risk-factors and yes - ability to pay. Just like in every other aspect of life, when I'm running low on cash I make different purchasing decisions than when I'm doing well. It's none of your business what decisions I make though, Chad. At some point I'd like to brand that with a hot iron onto the back of your skull.

    And Alice - I'm not aiming for "utopia". I'm aiming for the best possible system where competitive & productive forces are brought to bear to work for the average consumer. As long as there's still scarcity, not everyone is going to get every thing all the time. We won't all have giant mansions with Ferrari's in our marble-paved driveways and concierge doctors living in our guest-rooms. But doubling the number of people who have easy access to medication by doubling the amount of that medication available in the world would be a damn good start.

  93. Also, Chad - for the record my libertarianism STARTED with people watching, not with math. I had some pretty mediocre math experiences growing up and instead some great experiences with history and humanities... And I have a job that requires skills in fundamentally understanding people. The mathy side of my geekdom occurred much later, when I realized that math was, in fact, quite useful in the real world.

  94. I believe that Obama's plan for health insurance reform will make it illegal to supply health insurance that does not meet the minimums set by the plan or higher minimums set by the state in which the beneficiary resides.

    I disagree...and is nowhere in the bill.

    I must confess to not having read any of the bills. I'm just going by what I read...

    The bills in both houses require that Americans purchase insurance through "qualified" plans offered by health-care "exchanges" that would be set up in each state. The rub is that the plans can't really compete based on what they offer. The reason: The federal government will impose a minimum list of benefits that each plan is required to offer.

    Today, many states require these "standard benefits packages" -- and they're a major cause for the rise in health-care costs. Every group, from chiropractors to alcohol-abuse counselors, do lobbying to get included. Connecticut, for example, requires reimbursement for hair transplants, hearing aids, and in vitro fertilization.

    The Senate bill would require coverage for prescription drugs, mental-health benefits, and substance-abuse services. It also requires policies to insure "children" until the age of 26. That's just the starting list. The bills would allow the Department of Health and Human Services to add to the list of required benefits, based on recommendations from a committee of experts. Americans, therefore, wouldn't even know what's in their plans and what they're required to pay for, directly or indirectly, until after the bills become law.

    On what basis do you claim that stringent minimum insurance requirements aren't in the bill?

  95. Also from that article...

    The bills seriously endanger the trend toward consumer-driven care in general. By requiring minimum packages, they would prevent patients from choosing stripped-down plans that cover only major medical expenses. "The government could set extremely low deductibles that would eliminate HSAs," says John Goodman of the National Center for Policy Analysis, a free-market research group. "And they could do it after the bills are passed."

    See also the Cato blog article "The Attempted Murder of HSAs" quoting a WSJ column...

    The Senate plan says a policy deemed "acceptable" must have insurance (rather than the individual) pay out at least 76% of the benefits. The House plan is pegged at 70%... Roy Ramthun, who implemented the HSA regulations at the Treasury Department in 2003, says the regulations are crippling. "Companies tell me they could be forced to take products off the market," he said in an interview.

  96. I would STILL be willing to pay MORE for a PRIVATE PLAN where I didn't need to wait on long lines and get premium service from premium providers than go to a medicare/medicaid doctor/clinic...which is what the Public Plan will be.

    Incidentally, Alice, I too hope that premium plans remain legal for those who want them. But spending more for private alternatives to the public plan isn't the problem from the government's perspective.

    The problem from the government's perspective is people spending less for alternatives to the public plan. And that is why the government will impose minimum standards on private plans. It's plain old fashioned price-fixing -- making it illegal to offer something different for less -- and it lies in direct opposition to the words of Obama in the anchor post...

    "Choice, competition, reducing costs-those are the things that I want to see accomplished in this health reform bill..."

  97. JoshinHB | August 28, 2009, 1:28am | #

    A basic calculator 40 years ago cost $250
    now you can get one for $2.00. Thats 2% of the basline price before considering that the dollar is worth 15% of what it was 40 years ago.

    Manufactured goods get cheaper. Electronics, being a special subset whose value is only minimally related to physical materials, got a lot cheaper. Labor does not get cheaper, nor would you want it to unless you are already retired. Health care is mostly labor.

  98. Sean W. Malone | August 28, 2009, 1:51am | #

    This isn't some arcane "theory", Chad - it's fucking common sense borne out by facts every day in every part of the world. Less stuff being chased after by more people = less access and higher cost. Always. Every time. No exceptions.

    If the "theory" you are describing is voodoo Austrian economics, whose "axioms" are vague and which rejects mathematics almost entirely, I again find you laughable. Austrians specifically reject imperical measurements of the real world.

  99. Profit is not essential to competition. The best American universities are private and not for profit, which by the way, co-exist with many world class public universities.

    There are good, specific reasons why free market have not produced low cost, high quality health care. The free market has worked well in car insurance and life insurance. Nobody is demanding that goverment takes over car insurance. People want health care reform only because the market has failed misably. We should take time to understand the specific causes of failure of the market to produce a good solution.

  100. There are good, specific reasons why free market have not produced low cost, high quality health care.

    Oh? Care to name some?

    And please note that there hasn't been anything close to a free market in health care since the mid-60's, that the single most severe insult to the free market in health insurance has been around since World War II, and that physicians and drugs have had their supply strongly curtailed by state regulation for a century.

  101. After one gets cancer, they cannot get health insurance...not even at $10,000 per month. They would not be covered for cancer. They would end up in the emergency room anyway.

    That's only because the laws prevent insurers from offering that person a plan that excludes cancer treatment. Once gain we see that the current level of government intervention is *causing* the problem people want to solve with more government intervention.

  102. People want health care reform only because the market has failed misably.

    This is called begging the question. Please define "market has failed miserably[sic]".

  103. Chad, let's talk about two different labor-intensive skilled procedures.

    1) Child delivery

    2) Laser eye surgery

    There's potentially higher liability issues in the former case, probably more education required in the latter case, and the former used to be done for 10 times lower cost to the patient (in the 50's and 60's), while the latter used to be done for 10 times higher cost (in the 90's).

    There are a number of different factors that go into the cost of both, but ultimately you can get the laser eye surgery for less money. Is that because of actual costs involved or could it be that there's a free market for laser eye surgery while obstetrics has been forced into the non-free Comprehensive Health Insurance market?

  104. Austrians specifically reject imperical measurements of the real world.

    Are you stupendously daft or stupendously intellectually disingenuous?

    'imperical' evidence? Austrians have been right straight down the line and Keynesians have been wrong down the line. You want a sure bet? Bet against PK.

    Every damned month we hear about how government Disney economists are 'surprised' by changes in the economy.

    Keyensians are the ones that ignore the entire history of 'imperical' evidence showing the disastrous results of economic 'stimulus'.

    The excuse is always the same 'It would have worke.. if only we spent more'

    Disney economists have no credibility whatsoever, and because your average Joe hears all the time about how Disney 'economists' were mistaken they think that Disney economics is real economics and that economists don't know jack.

    But people do understand you can't spend your way out of debt. In such wise your average welder or waitress knows more than every Keynesian economist combined.

  105. Yeah... Chad is confused by what Empirical evidence is.

    Funny since he has occasionally claimed to be a "scientist".

    The Austrians don't reject empirical evidence, Chad - they reject econometric modeling and statistics as an epistemologically sound way of obtaining evidence. Instead, they've chosen to study history carefully, and to apply deduction and study things from the perspective of; "If this happens, what are the consequences at different relationships?". They look for root, rather than proximal causes and actually look for the "unseen" or unintended effects of different policies or actions.

    And as faithkills said, they've been right AGAIN and AGAIN and AGAIN, and AGAIN. While the Keynesians have been embarrassingly wrong over and over and over - or do you need me to link to the "Peter Schiff was Right" video??

    So yeah... let's see, which is more empirical? Observing and studying actual events of human history, and actual data that was recorded at that time - or mathematical models and predicted data that never comes true? Hmm... Tough call.

  106. We should take time to understand the specific causes of failure of the market to produce a good solution.

    So well said Andrew.


  107. After one gets cancer, they cannot get health insurance...not even at $10,000 per month. They would not be covered for cancer. They would end up in the emergency room anyway.

    That's only because the laws prevent insurers from offering that person a plan that excludes cancer treatment. Once gain we see that the current level of government intervention is *causing* the problem people want to solve with more government intervention.

    nmg,

    I'm trying hard to restrict myself from name calling. I will not call you names.

    But what exactly do you think is the solution? That a cancer patient be allowed to purchase insurance that doesn't cover cancer? That is the typical mean-spirited, selfish, cruel shit that I HATE From conservatives/Libertarians.

    I Thank god that u now NOTHING about CANCER. And, that you've had NOBODY in your family has had cancer. Because had u, u'd c how STUPID that solution is.

    Cancer re-occurs and shows up later...in case u didn't know.

  108. Alice,

    I've lost one family member to cancer already, and another has it now. So hopefully that gives me standing to point out that you're an idiot.

  109. As a 'soft' libertarian myself, I'm all for the free market. I'm even for lifting ALL RESTRICTIONS on Health Insurance Providers. They are free to
    - Charge as much as they like
    - Drop people at will
    - Deny and/or pay what ever they'd like
    - Reject anyone with any and all pre-existing conditions
    - Not be mandated to insure anyone
    - Not be mandated to pay for anything...not even taxes

    Let the buyers beware...and shop around. Let the 'FREE MARKET' dictate everything with NO Government Intervention. I'd even pass a law outlawing people from being able to sue their insurance company...if that would make u puritian libertarians happy.

    However, I'd hope you would ALL GIVE IN and accept a PUBLIC PLAN (paid by the TAX PAYER) for people that can not afford the FREE MARKET coverage or are un-insurable.

    Would u atleast accept that ?

  110. I didn't think I was talking 2 u Jake...I was referring to the comments made by rng.

    Nonetheless, I stand by what I said...even if all of u consider me an idiot.

    Once you have cancer....you are at the mercy of charity...because insurance will NOT cover you...and you are likely to get cancer again.

  111. Sean W.

    Sracruz5@yahoo.com: Whenever the graph is done, I'd love to have it. Just put Monetary Graph in the title.

    Alice:

    When the lightbulb came into it's own, millions of candlemakers were out of business. We could probably achieve 100% employment if we outlawed backhoes and shovels and forced all digging to be done with spoons. Increased producitivty makes us richer. If we can eliminate needless employment in any industry, those people can they work in another part of the economy meeting society's needs based on the limited resources at any given time.

    As for the Keynes vs Austrian thing:

    My understanding is that Keynes and his views weren't original? I thought he was just famous because he was saying all these things that Economists thought they had debunked a long time ago and his works caught on during a rough spot in the 30s?

  112. So LeeJoe Cruz,

    R u 4 closing down the insurance industry ?

  113. Or, r u say'n that my fear of unemployment shouldn't be considered ?

  114. However, I'd hope you would ALL GIVE IN and accept a PUBLIC PLAN (paid by the TAX PAYER) for people that can not afford the FREE MARKET coverage or are un-insurable.

    Would u atleast accept that ?

    Since that would be an unequivocal improvement on what we have today, I would absolutely accept that. Would that Congress were even dreaming of heading in this direction...

    What you suggest is, essentially, Medicaid without Medicare in an otherwise totally free market. That is of course far better than Medicaid with Medicare and a highly interventionist market.

  115. Thank's MikeP.

    I would have an addition regulation though. I would ONLY accept people in the PUBLIC plan that could NOT afford health insurance or are un-insurable.

  116. I'm merely suggesting that in a freemarket, you probably won't have the estimated 30% waste of administrative costs. Insurance Companies and Medical Director Offices will not need as many low skilled workers. This is not a bad thing.

  117. However, I'd hope you would ALL GIVE IN and accept a PUBLIC PLAN (paid by the TAX PAYER) for people that can not afford the FREE MARKET coverage or are un-insurable.

    Would u atleast accept that ?

    I would not accept a solution where people could not sue their insurers, that's just stupid, and would not make any libertarian happy.

    As for a public option that takes everyone regardless of health or income, well unfortunately it would eventually become the single-payer, so I could not accept that either.

    How about this for a solution: Government promises to pay all medical expenses above $50,000 in one year for any individual. Anything below that you have to buy insurance or pay out of pocket. This idea was mentioned in the Atlantic cover story everyone should have read.

    There's still probably some huge unintended consequences of that idea, but it's better than what we have now.

  118. I would have an addition regulation though. I would ONLY accept people in the PUBLIC plan that could NOT afford health insurance or are un-insurable.

    But how could you prove that? What if insurers jack up rates for all but the healthiest individuals so they're forced to go on the public plan?

  119. Mark,

    I word-ed it wrong.

    What I mean is that the Government would pay for the medical cost of people uninsurable or poor. Not that the Government would be an insurance company.

    Basically, Medicaid would be offered to those who are uninsurable or poor.

    Perhaps my idea is very short-sided. I don't know how I would be able to do without mandating that everyone get private insurance...accept the poor and uninsurable.

  120. But how could you prove that? What if insurers jack up rates for all but the healthiest individuals so they're forced to go on the public plan?

    If the free market for insurance behaves like that...well, then, YES.

    Either way, in America, you're gonna have to give healthcare treatment to the sick that don't have insurance. Whether it's the emergency room, medicaid, or whatever name you give it.

    I doubt that a law will be passed to deny people medical treatment if they are poor.


  121. But how could you prove that? What if insurers jack up rates for all but the healthiest individuals so they're forced to go on the public plan?

    You mean like what is happening today ?

    This is exactly what's happening today. And yes, once they jack up your premiums once you get sick (as they do today...of not drop u altogether), you gotta pay for medical treatment out of your own money. And, yes, once you've exhausted all of ur money, you go on MEDICAID (the PUBLIC PLAN).

  122. The idea that physicians denied people care simply because they were poor is absurd not to mention historically inaccurate. You used to be able to go a Private Hospital and receive treatment and not even required to give your name! Remember that Medicare was helped by Insurance Lobby dollars. Think about it, People pay their lives into a system, and then when they get to the age that they statistically actually need it for castrophic illness, they get put on the taxpayer payroll.

  123. What if insurers jack up rates for all but the healthiest individuals so they're forced to go on the public plan?

    Then those insurers are being idiots by foregoing profit.

    Either you believe in markets or not. Allowing companies to supply insurance at rates acceptable to those companies means that, for single individual, there is a price at which he or she can be insured.

  124. "They are free to
    - Charge as much as they like
    - Drop people at will
    - Deny and/or pay what ever they'd like
    - Reject anyone with any and all pre-existing conditions
    - Not be mandated to insure anyone
    - Not be mandated to pay for anything...not even taxes"

    Alice, how come you only think through one-side of these things?

    The market ensures that they can't charge "as much as they'd like" - they can only charge what people are willing to pay, while competing with other companies who want the average consumer's business.

    Apply your thought to some other industry for a second - Imagine I'm an apple-farmer. I could set my prices at $1,000 an apple if I like. I'm free to do so by law. But would ANYONE buy my product? No... Of course not. And I would go out of business in a heartbeat. I wouldn't set my price that high not because I don't want to get paid $1,000 per apple (I could retire in luxury in a year if people paid those prices!), but because the market won't bear that price.

    And before you start talking about "collusion", I say two things: 1. Find me a single example of businesses "colluding" without government backing in the form of an enforced cartel - and 2. there's no incentive to do that. As long as even one of my competitors realizes that he could get 100% of the apple-business by offering them at $900 instead of $1,000 - he would do so to gain advantage. And this is why competition bids price DOWN, not up.

    As for your other statements:

    Sure an insurer could "Drop people at will" - assuming you were dumb enough to sign up for an insurance policy that didn't have set rules for those kinds of things. And assuming that there's no incentive for a competitor to point out that Company X is "dropping people without paying, and therefore you should get your insurance from Company Y who has a much better reputation". Even a few people in society actually reading their contracts solves that problem.

    Same applies for your "Deny and/or pay what ever they'd like" comment. Insurance - like any other contracted arrangement is meaningless without specific terms. I'm not going to pay into a plan of any kind unless I know what will and won't be covered.

    "Reject anyone with any and all pre-existing conditions":

    Sure... And I think you want them to, for the most part. Imagine the alternative.

    You - a good, healthy, productive citizen - pays $200 a month to your insurance provider for 20 years. You've cost the system very little as you've maintained your health fairly well - only a few routine check ups from time to time and maybe a broken finger that you got while trying to build your wife a new deck.

    Over 20 years, you've paid in $48,000 (again oversimplified and ignoring insurance provider costs).

    Now, imagine that suddenly - I show up. I've been smoking and drinking my whole life - I never bought insurance, and now I've got kidney problems & lung cancer. The treatment for all my various health problems is going to cost $200,000 over the next year.

    Is it fair or remotely justified to YOU, for me to show up right now, demand that your insurance provider cover my illnesses - to demand that 4 times the entire sum of what you've paid in to the system over your whole life gets wiped out to pay for me, a guy who's never paid a dime in?

    Is that smart? Is that rewarding people for making good choices? Is that rewarding you for being responsible or me for being irresponsible? Is it fair?

    Even supposing you'd answer "yes, it's fair, because I'm an altruistic sort of guy and your life is worth more than my $48,000, even though I might need it later." then we're just going to haggle over price. What's unfair then? What if my diseases cost $1,000,000? $2,000,000? What if my one disease wiped out the entire insurance company?

    Then no one gets treated but me. Still fair?

    No Alice, I think you very much don't WANT insurance companies required to take everyone regardless of pre-existing conditions. To do so is to condemn thousands of people who's only fault was being responsible, healthy and perhaps having had the good fortune of a relatively normal level of illness over their life, to a shortage of treatment when they need it. Libertarians don't turn these arguments around enough, I think but Alice:

    Think about all the grandmothers out there! Think about the kids. The elderly. Think about how many people will not be treated if we require insurance companies to be over-run by leaches and tapeworms. If I can come in and get treated without having to pay, without having to think about my future, so can everyone else... How long can that last, I wonder? How long before we're all bled dry?

  125. He's right, if the perceived cost is zero then you'll treat it as zero.

  126. Would u atleast accept that ?

    Yes, Alice I would accept that if constructed correctly. To whit.

    Deregulate the entire lot of it. Eliminate all tax breaks and subsidies. Put the AMA on a pike (figuratively) as an example to other would be government backed cartels. Tort reform.

    IOW return health care to the free market.

    THEN. You set up a public option for people that are truly in poverty. We demolish medicare, medicaid, SCHIP, et al and roll that into the new plan. This consists of two choices.

    1) A health savings account stipend. Any funds not spent after 5 years for health care may be used as the recipient wishes for anything.

    2) A pure public health care system bureaucracy.

    Eligible citizens may freely switch between the two. Funding follows participation. Funding may not be increased for either option independent of the other.

    In this way we may ensure that people are helped that need it in a manner that does the least possible economic damage to the health care market overall.

  127. Stossel's religion assumes all reasonable, well-meaning people are motivated primarily by money. If he's right about that, then his positions make sense. If not, they're useless.

  128. Stossel's religion assumes all reasonable, well-meaning people are motivated primarily by money. If he's right about that, then his positions make sense. If not, they're useless.

    Strawman. There is no assumption of the sort. Just an observation of reality.

  129. I'm so sick of that asinine straw man, I dealt with it most all of today.

    There is no free-market economist living, and probably who's ever lived (since our ranks include the likes of FA Hayek - who's life's work was related to exactly the opposite assumptions!) who thinks that people need to be homo economicus uber-rational calculation machines. It is... for the (probably not) last time... the KEYNESIANS who think stupid shit like that.

    The "behavioral economists" today - are mostly ridiculous quasi-Keynesians just now bringing up the caboose on stuff Ludwig von Mises' Praxeology covered 60 years ago.

  130. Alice, try to think rationally instead of emotionally.

    Do you really expect that if you came to me asked me to insure your burned down house that I would accept the deal?

    Pre-existing conditions are a big problem for people. If you're trying to solve the problem of a system that encourages people to risk being in a position where they have a pre-existing condition, then let's solve that problem. There's lots of ways to do it. For one, we can make it so that there's no lopsided incentive to take non-portable employer-provided insurance, as we have today. (this is a situation created by the govt btw).

    But in the end, some people will CHOOSE to live with the risk of a catastrophic health even that is not covered by insurance and as a free society we MUST allow them to take that risk. Please look up the definition of "moral hazard" before you start advocating utter nonsense like a public plan that cannot turn away pre-existing conditions.

    Most people today uninsured with pre-existing conditions are victims of the system and we need to transition away from that so that the uninsured with pre-existing conditions are only those who chose to take that risk. I'm with you there. But the solution is NOT to create more moral hazard and restrict competition further.

  131. Charge as much as they like
    - Drop people at will
    - Deny and/or pay what ever they'd like
    - Reject anyone with any and all pre-existing conditions
    - Not be mandated to insure anyone
    - Not be mandated to pay for anything...not even taxes

    this displays such an utter lack of understanding about reality that there's not much to say. Why on earth would anyone sign an insurance contract that lets the insurer drop you for any reason? That's not insurance. Please try to actually think about what you're saying.

  132. There's a huge difference between being unable to get insurance due to a pre-existing condition and being unable to afford insurance due to poverty. You have to at least understand the difference between those two scenarios before you can even begin to talk about solutions for one of them.

    Hint: there is no need for a "public option" to solve either of those. You can easily subsidize the poor for anything you think they should be able to get that they can't afford. We do the same thing for food. As far as pre-exisitng conditions go, we need to transition away from the incentives that favor employer-provided group plans and that solves the pre-existing condition problem.

  133. this displays such an utter lack of understanding about reality that there's not much to say.

    I actually have a pretty good understanding of insurance.

    The more and more I discuss this matter, the more i find the PUBLIC OPTION and the SINGLE PAYER option totally ridiculous.

    What we need is a free market health insurance system where there are NO restrictions on the insurer. As mentioned earlier, they can do what they want and face the consequences of the free market. That is, people may switch insurance carriers if they are not making good on their contracts.

    I hate to sound emontional, but i hope that one doesn't develop cancer, get dropped by their insurance company, and is unable to obtain another policy. But that happens to such few people that it probably doesn't matter.

    Even with NO public Plan or Government Intervenion and a free market, people will eventually become uninsurable once they get sick. It would not be wise for an insurance company to insure someone with a history of cancer, high cholesterol, stroke, smoke, are homosexual, or ski/snowboard.

    I think the ONLY way the the FREE MARKET would work is if the GOVERNMENT OUTLAWED FREE HEALTHCARE. That is, no one would be allowed to walk into the emergency room and get medical treatment. You either have insurance or you prove you are poor/unisurable and get a voucher from the government so that you can apply for healthcare from the low-budget clinic.

    This is what's desired from u guys...right?

    It just wouldn't work if people were able to get free healthcare.

  134. This is NOT an emotional cry for the irresponsible people that got cancer or strokes. I just sincerely want to know if you folks are for BANNING tax payer paid free healthcare.

    I know u guys are all for charities helping out the poor useless people in our society that are responsible for their illnesses. But, are u willing to get rid of the tax payer paid free emergency room?

  135. It just wouldn't work if people were able to get free healthcare.

    People are able to get free health care today by, as you note, walking into the emergency room. Yet the total annual cost for uncompensated care in the US is only $40 billion, less than 2% of the $2+ trillion total of health care expenses. And there is good reason for this: getting primary care in emergency rooms is well beneath the standards of most people.

    Yet $40 billion is so much less than the lower bound $100 billion that the CBO finds for health care reform's covering of the uninsured that of course we should prefer ERs for the uninsured to actually trying to cover them out of the public coffers.

    As freed up markets cause health care to get cheaper, allow health insurance to become more portable, and produce innovations such as health status insurance -- where you insure yourself against ever having to pay a higher insurance rate due to new conditions -- we will find more people getting more of the insurance that they want and fewer people being uninsured essentially by government fiat.

  136. As freed up markets cause health care to get cheaper

    So, are u proposing that Doctors, Nurses, and other health providers take a pay-cut ?

  137. I am proposing that they get the pay that the market would get them.

    That might mean pay cuts for doctors as nurses start writing more prescriptions and people don't need a 3 minute, $100 doctor's appointment to get a $10/month prescription, or as freed up migration markets bring in oodles of doctors from other countries trying to skim the perceived profits of today.

    It might mean that superstar doctors make a lot more as they are allowed to advertise their services and their successes.

    Since I don't employ them, I'm not proposing a pay cut or a pay raise. I am simply proposing a free market for their services.

  138. Remember, folks: Inflation is the quickest, most profound way to redistribute wealth.

  139. Good points all... as usual from Mr. Stossel.

    The Obama Timeline is now in print: 660 pages of hard-hitting, well-referenced evidence against the current temporray resident of our Oval Office.

    The Obama Timeline is avaialble at your favorite online bookseller.

  140. I think the ONLY way the the FREE MARKET would work is if the GOVERNMENT OUTLAWED FREE HEALTHCARE. That is, no one would be allowed to walk into the emergency room and get medical treatment. You either have insurance or you prove you are poor/unisurable and get a voucher from the government so that you can apply for healthcare from the low-budget clinic.

    It's certainly an issue. Most libertarians would agree there should be no free health care but it's not necessary to outlaw it, just not pay for it.

    I don't necessarily go so far. In theory (well my theory) there's nothing immoral from a libertarian perspective about a welfare policy so long as everyone paying for it consents to it. Hardly like I will admit.

    But I think you need to read more Alice. A step in the direction of freed markets is always going to be superior. IMO shifting the burden directly to the taxpayer is preferable to shifting it indirectly via free ER policies and medicaid/medicare shifting.

    The subprime bubble is a perfect example of trying to game the system and not paying the costs of a welfare program directly. If we must have welfare we need to be honest and up front about it and pay for it. The final cost was much higher than would have been just building houses on taxpayer dollars.

    Consider that our relatively freer markets have provided a level of prosperity much greater than the rest of the world. True they are not very free, but they are more free than elsewhere, and that has reaped tremendous social benefits, and the prosperity to allow the public largess we afford to those who need it.

    It's about resource allocation. Managed market solutions perform worse in all cases. It disincetivises production, so the gross is reduced, and allocates that reduced amount less efficiently.

    'Health Care Reform' is a perfect example. It tries to allocate resources 'fairly' but people do not all have equal needs. They will use their 'ration' of insurance however regardless of need. This means people who need it will have less ability to obtain it, because people who do not need it are using it. Now you can try to introduce managers but this adds overhead and further reduces the resource availability, and that's the theoretical optimum. What actually happens is that 'management' is a magnet for corruption and black markets develop.

    You will have a market. Make no mistake.

    Free
    or
    Managed (which always brings a Black market)

    The only choice you have is whether competition is for price, quality and efficiency, or whether competition is for political influence and corruption.

    The unfounded faith that you may avoid this choice is the cause of untold misery. It has never happened in all of history.

    Read Hayek, Mises, et al. Once you understand them you will know how to be on the side of morality.

  141. My only point is that if you take the Bible straight, as I'm sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane

  142. My only point is that if you take the Bible straight, as I'm sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won't get the full deal by just doing regular skill english reading for those books. In other words, there's more to the books of the Bible than most will ever grasp. I'm not concerned that Mr. Crumb will go to hell or anything crazy like that! It's just that he, like many types of religionists, seems to take it literally, take it straight...the Bible's books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on...the Bible's books were written by people with very different mindsets

  143. I'm not concerned that Mr. Crumb will go to hell or anything crazy like that! It's just that he, like many types of religionists, seems to take it literally, take it straight...the Bible's books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on...the Bible's books were written by people with very different mindsets

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