Health care reform

Markets, Not Mandates

What would real health care reform look like?

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While congressional reform efforts screech and shudder along, let's take a moment to dream about real health care reform. Imagine a system that is genuinely transparent, competitive, and driven by consumers.

Right now, thanks to incentives built into the tax code, patients are locked into the health plans their employers choose. Consequently, most of us don't have a clue what our health insurance and health care cost. We have no way to reduce those costs and no incentive to do so even if we could. Worse yet, it's precisely when you need the system the most that it fails you. In the words of the Princeton economist Uwe Reinhardt, "when you're down on your luck, you're unemployed, you lose your insurance.…Only the devil could ever have invented such a system."

So the first step toward real reform is to give consumers responsibility for procuring their own insurance. The laws undergirding the third-party payment system must be dismantled, allowing the money employers spend for insurance to be converted into additional income for the employee. This would immediately inject cost consciousness into insurance decisions.

What would the results look like? It's impossible to predict all the specifics, but here's one partial vision of what markets might bring us.

The typical American might purchase high-deductible insurance policies that cover expensive treatments for chronic diseases such as heart disease, cancer, AIDS, diabetes, and multiple sclerosis, as well as the catastrophic consequences of accidents. Coverage would also include expensive treatments such as heart surgery, organ transplants, dialysis, and radiation therapy. In addition, we'd be able to buy health status insurance that would guarantee that we could purchase insurance at reasonable prices in the future.

Such policies are available already. The online clearinghouse eHealthInsurance pulls a quote of $131 per month from Anthem Blue Cross Blue Shield for a single 55-year-old male with a $3,000 annual deductible, no co-payment after the deductible, reasonable pharmaceutical benefits, and lifetime maximum benefits of $7 million, with an option for health savings accounts. (With such accounts, consumers make annual tax-deductible contributions, then take tax-free withdrawals to pay for uninsured medical costs.) That was the cheapest plan, but more than 80 other insurance policies were available. As deductibles went down, of course, the prices went up.

A lot of routine care could be handled through retail health clinics located in shopping malls, drug store chains, and megastores. Such centers would be staffed not with physicians but with nurse practitioners or other qualified personnel. Consumers generally would pay for routine, everyday transactions directly out of their health savings accounts.

Competition would also reveal more medical information. Even in our stunted marketplace, Angie's List allows consumers to submit reports about their experiences with physicians. In a real health care market, sources of information for comparison shopping would proliferate, just as there are now dozens of publications devoted to comparing the features and prices of cars, computers, guns, and vacations. A corps of savvy shoppers in the health care market will mean better price and quality comparisons for everyone.

For a hint of what free market medical shopping might be like, check out the California government's admittedly clunky website for comparing the costs of common surgeries. Browsing there reveals that the price of a heart valve replacement varies from $72,000 to $368,000, while angioplasty runs from $9,000 to $204,000. Other sites, such as newchoicehealth.com, enable consumers to shop for relatively routine procedures such as colonoscopies, laparoscopic hernia repair, and MRI scans. A colonoscopy in Washington, D.C., for instance, could cost anywhere from $580 to $1,386.

Would health care be cheaper as well? President Barack Obama famously read the surgeon Atul Gawande's June 2009 New Yorker article "The Cost Conundrum," which argues that medical costs are high because incentives are skewed toward providing ever more treatment so physicians can earn more money. Gawande analogizes health care to building a house without a general contractor. Without someone keeping an eye on what's really necessary or desirable, home buyers might well pay an electrician for every outlet he recommends, a plumber for every faucet, and so forth. Doctors get paid for each procedure they recommend. Curing patients becomes an incidental side effect of their treatments.

Gawande gets the diagnosis right, but he botches his prescription, calling for the government to impose such a general-contractor model. But cost-conscious contractors exist in the housing market because of consumer demand, not government mandate. Similarly, consumer choices have driven the housing market to create a huge variety of options, including high-rise condominiums, gated communities, rental apartments, manufactured housing, townhouses, and suburbs filled with ranch houses, Tudors, and Cape Cods. Competition in medicine would force physicians, hospitals, pharmaceutical companies, and other practitioners to figure out ways to reduce costs. Perhaps a medical general contractor model would prove most effective at lowering costs, but why not let some people go a different route?

Gawande argues that consumers are not in a position to negotiate prices. Quoting the Texas cardiologist Lester Dyke, he tries to imagine how an elderly woman might bargain over bypass surgery. "Who comes up with this stuff?" Dyke asked him. "Any plan that relies on the sheep to negotiate with the wolves is doomed to failure."

But Gawande and Dyke miss the crucial point: Markets force the wolves to compete among themselves. Physicians would vie with one another for clients, pushing down costs. Competition would also give doctors more of an incentive to provide patients with good information about the effectiveness of various treatments. Dyke's hypothetical heart patient would be in a much better position to consider the risks, benefits, and costs of bypass surgery, stenting, pharmaceuticals, and/or stem cells for treating her disease.

Opponents of markets in health care worry that patients in extremis will be in no position to make such decisions. But the slow progress of the kind of chronic illnesses that are driving up health care costs, such as cancer and coronary artery disease, allows consumers time to shop around for suitable treatments. Prostate cancer patients can evaluate and choose between options such as watchful waiting, various radiation therapies, surgery, and, soon, a new biotech immunological treatment. Information gathering would take no more time than the current wait for a follow-up appointment.

As medical care becomes ever more affordable, the government could dismantle its medical entitlement programs—Medicaid, SCHIP, and Medicare—and instead provide vouchers directly to the poor, who could then purchase health insurance and health care in the private market.

Hardly anyone in Washington is interested in such changes. If a health care bill does pass this session, it will probably make the system worse, not better. But if Obama's top-down proposals collapse, perhaps they will open up a policy discussion about how markets, not mandates, can improve health care and reduce its costs. A man can dream.

Ronald Bailey (rbailey@reason.com) is reason's science correspondent.

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167 responses to “Markets, Not Mandates

  1. Won’t happen Ron.

    You’re missing the point of the so called reform that the whores Reid, Pelosi et al are going to pass: It’s all about power and control, period.

    1. I got a name, but I must agree with No Name Guy.

      1. But do you carry it with you like your daddy did?

        1. Movin’ ahead so life don’t … pass me by.

      2. I dont wanna think about it,.

    2. YOU GUYS!
      THE HEALTH CARE BILL PASSED!!!
      HUZZAH! HUZZAH!

      1. Great. We’re truly fucked now.

  2. gated communities

    That’s racism straight up.

  3. A) You can’t have a “policy discussion” about “markets.” “Policy,” whatever it is, displaces them. Policy is policing; a market is what happens when the police aren’t around. It’s not shopping.

    2) Begging is gross.

  4. Gawande argues that consumers are not in a position to negotiate prices. Quoting the Texas cardiologist Lester Dyke, he tries to imagine how an elderly woman might bargain over bypass surgery. “Who comes up with this stuff?” Dyke asked him. “Any plan that relies on the sheep to negotiate with the wolves is doomed to failure.”

    Bullshit! This guy is simply ignoring the concept of time preference.

    If it is raining and I need a taxi ride, I am willing to forgo any possible future benefit for the ADDED VALUE [in my mind] of receiving the service right awqy. I value the expedited good more than the possible savings in the future, i.e. I have at that moment a higher Time Preference.

    Some people should refrain from tackling subjects they do not know, like Economics, for instance.

    1. Don’t you have a donkey ride to catch?
      You know, for your inexpensive Mexican antibiotics?

      1. HURR DURR

        DONKEY RIDES UR HILARIUUS

        DURR HURR HURR

        1. You’re not suggesting that an old Mexican should walk across the border?

          That would be cruel, ruthless, inhuman, and so very, very, very libertarian.

          1. That’s racism, str-

            Oh, he’s a liberal?

            Never mind.

            1. Remember the liberal creed:

              It’s okay if WE do it.

              1. No, the liberal creed is “don’t be racist.” It’s not our fault you can’t figure out what that means.

                1. There’s no such thing as a racist liberal. Is that what you’re saying?

                  1. My, aren’t you a politically correct little ass nugget of a libertarian.

                    1. Notice he didn’t answer my question, crayon. Can you?

                      There’s nothing PC about despising racism, by the way. I’d expect a liberal to agree with such a concept, but I guess you are some kind of aberration in that department.

          2. Must be Christmas break for the children. Run along and play Connie, the adults are trying to have a conversation.

            1. There are adults here?
              All I see are selfish brats.

              1. Stop looking at yourself in the mirror, then.

                1. HUUURRR DUUUUURRRRR
                  CIVILIZED DISCOURSE WITH LIBERTARIANS IS SUCH AN INTELLECTUAL ENDEAVOR
                  DERRP HEERP

                  1. STFU, crayon. Go back to using your usual name, BTW… and THEN shut the fuck up.

                  2. THIS is civilized discourse? “DERRP HEERP”? What the blistering hell is that supposed to mean?

                    1. The sound libertarians make when they try to explain their epic faggotry:

                      http://memegenerator.net/Insta…..P-HERP.jpg

                    2. Passing judgment on sexual preferences, Blitz? Not very liberal of you.

                      Then again, you don’t know everyone’s sexual preferences here, do you?

      2. Re: Constitutu,

        Don’t you have a donkey ride to catch?

        You know, for your inexpensive Mexican antibiotics?

        I don’t ride donkeys, Constitutu, I only ride your ass.

        1. So you’re a Mexican rapist?
          Awesome!

    2. That’s kind of the point. Grannie doesn’t know anything about time preference either, she just wants her ticker fixed. Theoretically the market would flatten things so that her decision would not be disastrous, but it does leave open the possibility that rapacious wolves will perform bypass surgery and then eat her face afterward. (Or pad his bottom line with a lot of “tests”. But the face-eating sounds better, so let’s go with that.)

      It’s those possibilities that keep earnest do-gooders awake at night trying to formulate the Perfect Health Care Policy. They start with a “No eating of faces” and go from there. Before you know it it’s 2,000 pages.

      So there is a problem here. People can get screwed in a private, open market system. The response to that is, “So? People will get screwed in any system. Under a government plan, however, it’s nigh impossible to fix.”

      1. “So? People will get screwed in any system. Under a government plan, however, it’s nigh impossible to fix.”

        If only there were a way of changing the government by electing representatives that would then enact certain policies…
        Nah, such a system doesn’t exist.

        1. Well, at least in your last sentence you get it right.

        2. Yeah, that’s why I said “nigh impossible”. For example, how’s your health care reform bill doing, Sir Chump-a-lot?

          1. Try complaining to “management” when government runs health care.

            1. HURRRR DURRRRRR
              VOTING IS STUPID
              DEEERP HERRRRRP

              http://www.distortedminds.net/…..42×300.png

              1. Well no… I mean, voting *is* pretty stupid. Since your vote is almost assuredly meaningless, and since the incumbent will basically win 3/4 times.

                On the other hand, if I don’t like something that some business does – no one forces me to go back. And that works IMMEDIATELY.

                I can demand my money back (which almost always works), I can walk out of the store, I can go patronize someone else who’s producing what I want and I can never, ever, go back to that first place if I so choose. It’s pretty simple.

                Now, here’s the lesson about markets: When most customers walk out and don’t come back, that business must either completely change their behavior, or they go bankrupt and disappear. When most customers like the service & products they’ve gotten, they keep coming back – and that company gets to stay in business, become profitable and hopefully expand, thereby making even more people happy!

                Now… Let’s try this scenario again using a government agency – say, the DMV. If I don’t like the experience (which I don’t), if I don’t like their product (which I don’t), and if I think the price is completely ridiculous (which, at $250 for a couple of stickers that say 2010 on them for my LA registration, I most certainly do) what happens?

                Can I go to an alternate supplier of 2010 stickers? Nope.

                And if nobody likes it (which, let’s be honest, no one does), does the DMV go out of business? Nope.

                Can I simply choose not to go there at all? Nope. I mean, not unless I want to be fined and eventually jailed…

                So yeah, let’s see, which is easier to change? Definitely not the government.

                STFU crayola.

        3. “If only there were a way of changing the government by electing representatives that would then enact certain policies…”

          If only there were a system that would, through prices, competition and choice, allow individuals to freely manage their own dollars, risks, and benefits.

          Oh, yeah, we had one of those but the elected representatives put a stop to it, because it didn’t allow them to control the choices those individuals made.

          1. The free market never existed and never will.

            1. Traitor.

              1. “Traitor” is an interesting choice of word.

                I’m going to go out on a limb and say that the reason you didn’t call him “wrong” was because he was, in fact, right.

                And I think you’re using the word “traitor” in much the same way you’d use the word “heretic”.

      2. About catching a taxi in the rain: The taxi is available to you AT ALL in large part because there is a high demand for taxi services when it is NOT raining. The free, voluntary market has made it possible for plenty of taxis to be on the road, seeking fares, whenever the clouds open up.

        In medicine, the free, voluntary market can provide devices for measuring and monitoring, and all number of drugs and devices that were originally intended for non-urgent care, but can be used just as well in emergency care — thus making the latter more dependable, available, and affordable. Allowed to work, the market CAN drive down costs and prices, and CAN yield expanded access to quality health care for all. Unfortunately, the politicians and the people who vote for and support them do not seem to understand or agree. For a so-called “free enterprise” economy, so many of us in it seem to be deathly afraid of the thing to which we as a society pay lip service. We were proud enough to say that free-market capitalism kicked the Soviet Union’s ass, but now that we are left alone with it, so many of us seem to prefer the way they did things “Back In the USSR.”

        Go figure.

      3. The growing system of cash-based retainer practices is the way to empower the patient to negotiate through the system. They pay a primary care physician a monthly retainer to provide all necessary care. Among the services would be the negotiation with hospitals and specialists. That used to be the way it was done before all the alphabet groups got involved. They had different priorities than patients but the cash-based primary care doc has no other client.

        1. You may not be aware this very system is what the AMA worked very hard for years to abolish.

          That said, of course salaried and contracted service is a good option to have and it will help the market. But don’t get caught up with one mechanism. If it were all retainer service it would also cause a problem.

          Markets don’t work by good ideas being enforced for everyone.

  5. Too bad hardly anyone in Washington is interested in such changes.

    The Republicans took incredibly tiny baby steps on health savings accounts and letting people use FSAs for various expenses. Of course, FSAs are getting severely restricted now– no using them for non-prescription items anymore, no more than $2,500 put aside.

    The changes were tiny, incremental ones that didn’t save people instantly. And of course they’re all going to vanish now anyway.

    Yes, the Republicans didn’t push bigger changes– because of the reaction (and the ad campaign) against McCain’s suggestion. Otherwise intelligent commenters here couldn’t tell that a $2500 tax credit was worth more than a $5000 deduction, so there really was never any hope for a plan that says that people ought to bear some portion of costs to control costs.

    1. If HSA’s and FSA’s are examples of Republicans think are a good idea, I’ll pass. I sure don’t appreciate thousands of my dollars locked away where I cannot get it when I need it (like making a downpayment on my first home), and FSA’s are like some bizarro version of the Price is Right showdowns: Don’t go over or you will lose! They both require stupid amounts of paperwork and are honestly not even worth the few bucks I save in taxes.

      1. Chad, you only hate medical savings accounts because it would give INDIVIDUALS the POWER to CHOOSE how THEY spend THEIR OWN GODDAMNED MONEY.

        I capitalized the parts you’ll no doubt comment upon. Bon appetit, schmuck.

      2. I sure don’t appreciate thousands of my dollars locked away where I cannot get it when I need it

        But you have no problem with the government taking the exact same money and not allowing you to use it for ANYTHING.

        Disingenuous Cunt.

        1. “Disingenuous Cunt”?

          Excellent argument, Hazel.

          Also, you assume Chad would have no problem if the government just took “the exact same money”.

          Where did you get that figure? And why do you assume he wouldn’t care, when he just said he wanted to use it for a down payment?

          Oh, right. Because these words (government! steal! it’s my money! not allow me to do anything I want! theft! theft! and etc, ad nauseum) are programmed to come out of your mouth without you having to expend any energy on thought.

          Well done!

      3. I sure don’t appreciate thousands of my dollars locked away where I cannot get it when I need it

        No you’d prefer tens of thousands locked away where you will never get it. The intelligence of a liberal to go along with the conscience of a liberal.

        It should be noted conservatives screwed up HSA’s too by wanting too much control.

  6. Quoting the Texas cardiologist Lester Dyke, he tries to imagine how an elderly woman might bargain over bypass surgery.

    Jeebus H. on a pogo stick. This is so willfully ignorant, I want to kick them both right in the taint.

    Its not about haggling over your medical care like you’re buying a goat at the local souk. This is America; we don’t haggle, we shop.

    Nobody haggles over their lasik surgery, after all; you ask around your friends, maybe research some on the providers, and check prices.

    1. you ask around your friends

      Certainly statistically irrelevant.

      maybe research some on the providers

      Where would you go for useful, statistically meaninging, unbiased information?

      and check prices

      Now this one people can (usually) figure out, so it tends to win.

      1. Where would you go for useful, statistically meaninging, unbiased information?

        I dunno. Where do you go to find information on auto insurance?

        Or autos?

        Moron.

        1. Yes, auto insurance. Because shopping for an auto insurance policy is so similar to decide how much to pay for a disease whose treatment you can’t even begin to comprehend.

          Yes, auto insurance- one of the most highly regulated products around, the comparisons between which are only possible because of the horrors of government, which requires standardized basic policies.

          You’re on a roll, Hazel.

          1. And you’re retarded peter. Excellent work.

      2. In medical services not covered by insurance, like lasik and plastic surgery, there is plenty of comparative information out there.

        1. RC, well said – and nice use of “taint!

        2. Elective procedures would obviously be more subject to market forces than necessary ones.

          1. Obviously. That’s why, for example, food continues to be so expensive–it’s necessary, therefore relatively insensitive to market forces.

            1. Totally apples and oranges. Food is cheap, necessary medical procedures rarely are. And people don’t act like rational consumers when their health or life is on the line.

              1. Ugh, Tony. Do you even bother to think through the things you say?

              2. Tony-“Food is cheap, necessary medical procedures rarely are. And people don’t act like rational consumers when their health or life is on the line.”

                Gee Tony, could the socialist delivery system of the last 70 years have anything to do with that.

                Are you Prog Party Hack, or are you really this big of a dumbshit?

                1. He’s both, Josh.

      3. Where would you go for useful, statistically meaninging, unbiased information?

        The same places you would go for information about a product or service in markets that are free.

        What do you do when you want a good dishwasher or mechanic?

        Despite the fact web sites like this already exist you think there wouldn’t be more if health care were a free market?

  7. Even if the everyone had a private high deductible plan (say no coverage below $5000, 100% over $5000) (assuming we got over the problem of pre-existing conditions, etc.), most medical costs would still be paid by insurance companies. The guy who goes to his doctor every once in a while when he gets a bad cold or breaks a finger isn’t a significant portion of health care costs. Competition in the small routine procedure market would probably drive down the cost of a doctor’s check-up, or setting a broken arm, but very few people can pay out of pocket for the hundreds of thousands it costs to treat serious cancer. And treating cancers, heart disease and chronic conditions is by far the bulk of health care costs. Insurance payers, especially private insurance companies, have a horrible record in negotiating low prices for these expensive procedures. They’ve tried to get the prices down through HMO’s with a little bit of success, but a lot of annoying hoops to jump through. It seems that providers of high cost medical services have some kind of market advantage that allows them to continue raising prices despite insurance companies trying to keep them down (and they have every reason to pay the lowest prices they can, since that gets them more customers and more profits). I’m not sure how a free market would get around that problem.

    1. Of course the specialists have a “market advantage”.

      1: Medicare sets their rates too high vs general practitioners (and any other similar profession). HMO’s largely follow suit.

      2: The AMA limits competition, keeping the prices high.

      1. Why would private insurers pay more just because medicare does? That doesn’t seem to make sense. My guess is that the advantage is more informational- the specialist and hospital have the patient there, can order tests, do procedures, etc. and charge the insurance company. There’s no one to say no as long as they can reasonably say its medically necessary. The patient doesn’t care, he’s not paying and he wants the best care he can get and trusts his doctor. HMOs try to reign this in with pre-authorization requirements, etc., but they can only do so much. If they deny or question too much, they get accused of practicing medicine and making medical judgments.

      2. Sometimes I think there’s two Chad’s. When you display understanding it confuses me.

    2. It’s not clear to me that your life ought to be worth less than a car or a house. Yes, massive medical intervention that results in saving your life is going to be one of the largest financial expenditures of your life. It is ridiculous that people think they ought to get a new heart for less than a new car. You’re right, maybe markets can’t get the costs down for things like giving you another decade of life. That sucks. It sucks that I have to shell out six figures for a house. Or, oh gee, six figures for a medical education. Yes, it’d be swell if you could get some of the most highly trained, educated people in the world with the some of the most high tech equipment and chemicals in the world to spend tons of time on repairing your body for almost nothing. It’d be swell if I crapped out gold coins too. The world will never be perfect and you’re going to have to pay for stuff. Or, you know, continue voting for people who threaten to use force to confiscate your neighbors money so you can get stuff for free. Personally I’m not a big fan of initiating violence against other people to get stuff that I want.

      1. So just man up and die if you can’t afford medical care. Because taxes are theft! Such moral priorities.

        1. Re; Tony,

          So just man up and die if you can’t afford medical care.

          Yes.

          Because taxes are theft! Such moral priorities.

          I would rather see my son die than snatch somebody’s purse to buy him medicine. That’s how principled I am, i.e. I am neither a thief nor a hypocrite.

          I am not below asking for help. And many people do help, Tony, voluntarily – no need for wholesale thievery like you advocate.

          1. If you refused to steal to save your son’s life, I’d say your moral choices are fucked up. That’s tantamount to murder in my book. Stealing can be easily rectified, letting someone die cannot. You are not more moral than I am. Just more fanatical. Oh and taxes aren’t the same as theft.

        2. Just man up and die if you’re at the back of the waiting list.

          Just man up and die if the government just doesn’t have enough MRIs to go around.

          Just man up and die if “the people” vote that you don’t “deserve” a new liver.

          Just man up and die if the government decides funding research for your rare disease isn’t politically expedient.

        3. Taxes are murder when you don’t have that money to pay for health care and you’re on a waiting list to get seen by a radio oncologist.

          Increased. Mortality. Rates. Tony.

          We have the best survival rates in the world. Why do you want to kill Americans Tony?

          1. Right.

            Of course 45,000 people a year in US die because they don’t have insurance.

            Also, we pay roughly double the amount the rest of the western world does. The part of the world, that is, that has rejected market-based health care.

            Our infant mortality and life expectancy is abysmal. But at least our survival rates are good.

            1. Non sequitur. If you want to live longer get off your ass and exercise and eat better. If you want lower infant mortality rates stop counting abortions as infant mortality.

              We pay for health care and we have the best in the world. Period. More americans will die if this crap passes. That’s the reality. We don’t want to copy the rest of the worlds survival rates.

    3. I’m not sure how a free market would get around that problem.

      There’s also the converse effect of the price signals to consider. High rates of return for these treatments attract more doctors (if the AMA would let them), and more research into cures.

      Cancer, unfortunately, appears to be a very intractable problem. We’ve been blowing money on cancer research for decades, and don’t have much to show for it.

      1. Consider how many people would be out of jobs if we cured cancer.

    4. Each state controls the medical system. Interstate Commerce works. It should apply to health insurance. That’s how auto ins. works

    5. Adam -“prices down through HMO’s with a little bit of success, but a lot of annoying hoops to jump through. It seems that providers of high cost medical services have some kind of market advantage that allows them to continue raising prices despite insurance companies trying to keep them down”

      The problems is that health insurance / care in this country has been a socialist system since WW2

      Consider:

      Consumers don’t pay for the services that they receive, have limited choices of providers(doctors)and are generally treated like children that must defer to the “experts”.

      The Paying party (insurance co’s)deal with the consumers(patients) only indirectly. The Insurance co’s real customers are the employers that pay for the insurance.

      As a result their is no effective pricing system for healtchare. Supply and demand are complete out of balance.
      This is the exact situation that Mises predicted would cause the demise of socialist systems. The socialist insurance system has lead to Americans believing that HC is a “right” and that “everyone should get the best care available”. The absurdity of these beliefs becomes apparent when you subsititute food, or clothing or housing for healthcare in the above statements.

      The only way to improve the cost of healthcare and increase the effiecency of utilization is to get pricing systems back into HC to restore Supply-Demand balance. Paying for minor procedures is a good place to start.

  8. Nurse Ratchet – the Original Death Panelist.

    1. Just think, if/when we get saddled with Obamacare, we can all have our own personal Nurse Ratched.

  9. A news item with glancing relevance to health care and its reform: The LP website is reporting reports that 2004 LP Presidential candidate Michael Badnarik was hospitalized in Wisconsin as a result of a heart attack. Link here: http://www.lp.org/blogs/wes-be…..rt-attack.

    Google tells me that Alex Jones also picked up the story, here:

    http://www.prisonplanet.com/li…..ttack.html

    Offhand, I don’t see any MSM coverage. No surprise there. If Gore had a heart attack, we’d see coverage on the front page, above the fold, with 96 pt. headlines. If Kerry had a heart attack, he’d likely get similar coverage, but with headlines not so big.

    My best wishes to Mr. Badnarik for a rapid and complete recovery.

    1. +100 for Badnarik. Godspeed, dude, get better soon.

      1. Best of luck, Mr. Bardnarik. Get well soon, man.

    2. Seriously? In the free market of ideas, Mr. Badnarik lost, and lost big.

      In the free-market of newspapers, he’s not ever going to make the front page of anything other than his hometown rag.

      I wish him the best, and a speedy recovery. But as much as you hate to hear it, the only media outlets likely to mention it are NPR and PBS.

  10. Wasn’t Ronald Bailey an early proponent of the now-reviled mandatory health insurance?

  11. In an unregulated market, what is there to stop a few large companies from fixing prices. From the standpoint of the Medical Administration, lower prices is bad for the bottom line. In an unregulated market they could easily come together with their competitors and agree to keep prices for major procedures high, regardless of the real cost.

    1. Re: SusanM,

      In an unregulated market, what is there to stop a few large companies from fixing prices.

      It would take other companies saying “Yeah, sure, whatever you say, baby!”, and then going ahead and undercut their price and snatching their market.

      That is the very reason why large companies NEED regulated markets, so that they can FIX PRICES.

      From the standpoint of the Medical Administration, lower prices is bad for the bottom line.

      No, high COSTS are bad for the bottom line. If you have low prices, you just need to sell many times, i.e. have a lot of customers.

      Business Acumen 101:

      What can you sell that people want?
      At which price is your customer willing to buy?
      What’s your costs?
      How fast can you sell?

      In an unregulated market they could easily come together with their competitors and agree to keep prices for major procedures high, regardless of the real cost.

      Sure they can – and then somebody smart will undercut their prices, snatching their market. You think businesses are run like in The Godfather, with the heads of the 12 Hammer and Nail factories coming together to fix prices? You’re nuts.

      1. You think price fixing and collusion doesn’t happen?

        I got a bridge across the Rio Grande to sell you, buddy. Put the textbook down. Step away from the theory. Go read some history.

  12. Re: Tony,

    So just man up and die if you can’t afford medical care.

    Yes. The same way you will get wet if you cannot afford a house, or you will have to walk if you cannot afford a car. Such cruelty in this world of ours . . .

    Because taxes are theft! Such moral priorities.

    I would rather see my son die than snatch somebody’s purse to buy him medicine. That’s how principled I am, i.e. I am neither a thief nor a hypocrite.

    I am not below asking for help. And many people do help, Tony, voluntarily – no need for wholesale thievery like you advocate.

  13. Why isn’t Congress looking at the McCarran-Ferguson Act which is why we have the screwed up system we have.

  14. Or we could allow access to medicine without paying hundreds of dollars for a permission slip from a doctor.

  15. Something like go to a drugstore and buy what you need?

  16. Health care is just an excuse to empower politicians and move the USA closer to socialize. A tool of the left, like man made warmer myth.

  17. Yes, we need transparency in healthcare so providers will have an incentive to do better (both quality and cost).

    One useful site is http://www.healthcarebluebook.com to find out how much you should pay for care.

  18. A “free market” solution is surely the ideal. Returning the insurance premiums companies pay to the insurers to the employee so that individuals may purchase their own health care plan is noble. But the current system does have the advantage of signing up members who would otherwise choose to go without insurance. Employer withholding of Social Security and Medicare taxes is far more efficient than trying to collect the obligations one-by-one. And what would be the consequence for those who chose NOT to pay for insurance voluntarily and later required medical care? Just look at the auto insurance mandates and the need for “uninsured motorists” coverage. There has to be a better way, but I don’t believe this solution is quite ready for prime time.

    1. Those pesky, ungovernable individuals who insist on making their own choices. What will we do with them? I know! Forcing them to behave as I think best is so much more efficient. Yes, indeed, the Soviet Union was and Cuba is such a more efficient way to organize things. Yup.

      1. They insist on choosing to go without insurance, and then forcing the rest of os to pay when they get sick. And in the real word, Jeff, we are going to pay.

        In your libertarian utopia, people who make bad choices will be free to die if they can’t afford care.

        Unfortunately, the real world is much different from your vision of heaven, where those who choose poorly (or are financially unlucky, or who fail to properly plan their catastrophic illness, or whose parents weren’t able to properly explain economic theory to them) will just die off, leaving only rational, intelligent people who will make fully informed health care decisions. Hopefully, we can get to this place one day, since we are there quite yet, it would be smart to design a policy that will work in the world we have today.

        Also, I thought you libertarians were supposed to be principled debaters. It’s intellectually dishonest to claim that any progressive wants to emulate the Soviet Union or Cuba. We look at France, Canada, Germany, Japan, Taiwan, etc. And each of those countries is, in fact, far more efficient.

        But I suppose when you can’t make an actual argument, it is helpful to just scream that the Commies are coming.

  19. Well done. My thoughts exactly.

  20. what about pre-existing conditions???? i saw nothing in the article about this issue.

  21. An ok article, and I really wish conservatives would embrace this type of argument rather than the Beck/Hannity/Limbaugh hysteria. But note a few problems:

    (1)”Opponents of markets in health care worry that patients in extremis will be in no position to make such decisions.” What follows is a pathetic response to this concern. We all know that early detection is key to surviving cancer and other deadly diseases. If you failed to catch your disease early, it won’t matter how much you beef up your insurance plan.

    (2) He avoids the strongest counterarguments. I agree that increased competition would lower costs. Reasonably-minded conservatives also acknowledge that a single-payer system will also lower costs. The difference lies in where the cost cuts occur. With the free market approach, companies would direct their cuts towards healthy people (often young) and care more generally. In a single-payer system advertising, compensation, administration, and (for better or worse) fraud investigation are cut. By its nature the single-payer system directs more money into care.

    1. Ben-“Reasonably-minded conservatives also acknowledge that a single-payer system will also lower costs…. In a single-payer system advertising, compensation, administration, and (for better or worse) fraud investigation are cut. By its nature the single-payer system directs more money into care.”

      This is prog wishful thinking.
      We have had “single payer” in k-12 education for about 80 years, with disastrous results. Not only has spending exploded, but quality continues to decline every year.

      This article by Tom McClintock puts the situation into perspective.

      http://mcclintock.house.gov/se…..sp?PID=292

      Keep in mind that per pupil funding has increased by 15% in the 4 years since this article was written.

      1. Not sure what you have against public education, but it has not been disastrous. Before public education was widespread many Americans could not write their name.

        1. Many americans can’t write their name now.

          After receiving $100,000 – $200,000 worth of “free” education.

          My point was that public education started out ok, which is to say that education gererally was better in the 1920s. After 90 years of socialized education, high schools all over the country are graduating kids on a college prep track that are functionally illiterate. Not to mention the 40% who don’t graduate. And the graduation and education rates are worst in states and district that spend the most money.

          1. Many Americans can’t write their name now? Really?

            When you say that districts that spend more money have worse results, you are confusing correlation with causality.

            And to top it all off, you are confusing health care with education. They are two very different things.

  22. It’s a worthwhile column. As someone who has been in multiple aspects of medicine (academia, practice, pharma), while I support the goal of coverage, I don’t see this bill (in whatever reconciled form it emerges) as achieving the stated goals. Furthermore, you can pass a bill today that states everyone is now covered and that is not the same as assuring everyone has access to the care they need (or that individuals necessarily know what they need).
    What we really need, in my opinion, is:
    1) transparency with regard to pricing- between the various rates for government vs. insurance reiumbursements, it is very difficult for an individual to tell what the real price is. Kind of like going to buy a car and told that the price is discounted $5,000 which brings it down to $30K. Is that a good deal? Who knows?
    2) sever the tie between emplyment and insurance. And by the way, allow individuals to band together to get group rates, not based on employment. Oh, and let insurance be sold across state lines if you want more competition.
    3) set up incentives for real innovation within pharma/biotech. Right now, drug makers are rewarded more for a me-too drug in a large market than a truly risky new agent that provides a real advance. Innovation should be rewarded more if we want to encourage real innovation, particularly in chronic diseases (think dementia, diabetes, cardiac, cancer, etc.).
    4) Tort reform/patient protection. This is the largest missed opportunity from my perspective. At present, medical malpractice does occur as do bad medical outcomes. They are not equivalent, but in our current society, a patient with a bad outcome (independent of whether it was a result of malpractice)can sue and get a large judgement. This produces defensive medicine which is a huge driver of costs. Not just for premiums, but in terms of medical culture. People talk about unneccessary medical tests, yet for a practicing MD, thoses tests may well be risk management, avoiding a suit in the event of a bad outcome. This system also disallows the potential for a more comprehensive system of examining bad outcomes and avoiding them (if possible) in the future. Systemic processes and individuals that may contribute to errors (and potentially bad outcomes) could be better identified with more transparency. The adversarial system of the present doesn’t allow for that.
    All missed opportunities. I’m no Republican, but the Dems should suffer for the bungled version of “reform” as currently proposed.

    1. hell yeah. With regard to the transparency in pricing, my husband and I are uninsured and make just enough money that we are not eligible for our medical bills to be waived too little to just pay medical bills when they come. If we have to visit the emergency room, the staff there is NOT ALLOWED to tell us how much this visit is going to cost, something about if people know how much it will cost, they won’t get the proper treatment. I can’t budget for the proper treatment if I don’t know what I’m budgeting for. So we wait a couple of months for the emergency room bill, scrounge up enough money to pay it off, and then a month later, after I think it is all taken care of, we get a doctor’s bill for the visit, I call the hospital to say what is this, find out that, no it is not a mistake and have to figure out how I’m going to pay that off now. Can’t I at least know how much I’m going to pay ahead of time?

  23. the “prices ” of services and procedures in the current system vary wildly according to who is being billed ! This means there is no real “price ” for anything ,its whatever the “market ” will bear … sweet deal for the provider, sucks for the consumer . Free markets cannot be applied to Health Care. Here is an analogy … I have no problem with YOU sending YOUR kids to private school and paying whatever YOU want , BUT I want to be able to send MY child to the local public school . ( or do not make me use Fed Ex to mail my letter when I want to use the Post Office ( whatever you may think of the Post Office , I LIKE IT )

  24. The main problem I have with Obamacare is it doesn’t solve the most important problem for Americans: someone else must pay for our health care. Since health care is now a right, why should I have to pay for it?

  25. consumer
    for the same reason that I pay for Fire Dept , Police , etc. so that YOUR house fire will be put out…. this is part of being a community , go live in the woods and be alone if thats how you feel …..

    1. No, that’s now how it works… I pay for fire and police protection so that MY house fire will be put out. YOU pay to have YOUR house tended to. And so forth.

      Troll your communitarian crap somewhere else, lady. DemocraticUnderground would be a great spot for you to land.

  26. Pretty good points by the author. The one Achilles’ heel is that for this kind of idea to work, there would have to be some rules about what the insurance companies can do. They would have to be barred from rejecting people with “prior conditions” and barred from dropping people when they get sick. If there were a few rules like that in place, this idea could work, and would not be that different from Wyden-Bennett.

    1. i agree with the point about not allowing insurance companies to drop people when they get sick, but the issue with preexisting conditions is enormously misguided.

      Insurance companies cannot reasonably be expected to “insure” someone who already has cancer. And many patients without insurance will be inclined to try to hide illnesses, so they can avoid buying coverage until after they are already sick.

      THAT’s why insurance companies don’t want these people.

      Also, what is considered a “pre-existing condition” can run the gamut from “has cancer right now!” to “once had a skin condition that is tangentially correlated with cancer”.

      Unfortunately, most states do not allow insurance companies to charge these people slightly more than others. That is what is driving them to drop such patients. The insurance company makes a quick calculation that individual X is likely to cost them more than they are permitted to charge, and decides not to take them.

      This is the classic problem with price controls. If the government forces a business to sell a product below cost, then businesses will stop offering that product. That is just as true if the “product” is insurance, and the “cost” is expected future payments, as it is if the product is eggs.

  27. 1) Does that seemingly reasonable quote for the 55 year old in California apply if he’s had a history of heart problems? Or if he’s diabetic? Or if he’s HIV positive? No? Didn’t think so.

    2) If the answer is no, then the “real” reform touted by Bailey is meaningless. To make it work, the government would have to mandate community rating and guaranteed issue. OR the government would have to mandate that people carry “health status insurance” from an early age, and prohibit them from letting it lapse.

    3) Or not. We could simply continue to be the only rich democracy that allows its own citizens to lack insurance coverage. I’m not here to bash the libertarian world-view; I acknowledge reasonable people can differ about the role of government. But apparently most folks view widespread non-coverage as a serious problem. I just think politically, it’s a non-starter.

    4) And what do we do about the affordability problem for out of pocket, “plannable” health care expenditures? Sure, reducing the role of third party payers and deregulation and cartel reform would enable prices to come down, but not enough for, say, a single mother earning $25K to pay for adequate preventative care for her two children. And how would such a person afford an extra two or three hundred a month for catastrophic insurance for her family?

    5) So, the point is, even the kinds of market-friendly “real” reforms desired by libertarians will require a healthy dollop of government regulation AND heaps of government cash (subsidies) to make work, unless, again, we’re prepared to let millions of less affluent people and their children go without adequate access to health care. Moreover, enacting the type of system approved of by most libertarians would require A) dismantling Medicare and/or B) convincing the GOP that spending more money on domestic concerns (money for subsidies so people can afford high deductible and health status plans) is the right thing to do. We all know neither of these is going to happen any time soon, for reasons of politics.

    6) It seems to me that, from a pure utilitarian calculus, enacting ObamaCare therefore makes sense over the status quo (which, let’s be honest, is an ugly hybrid, corporatist model that’s anything BUT market-friendly). If a more market-friendly reform is what you’re after, I suspect it will be no more difficult to move toward such a system from a position of 95% coverage (what we get with ObamaCare) than from the status quo. In fact, it will likely be easier, because as people get used to greater health care security, portability and universality of coverage, they’re MOST unlikely to give up such things. (AFAIK no industrialized country has dropped universal health insurance once it’s been enacted; unsurprisingly, health care security is POPULAR with voters). So, this means any future drive to cut costs is unlikely to list “dropping universality” as one of the acceptable options. But a libertarian-friendly Singapore model just might make that list.

    1. 1) Does that seemingly reasonable quote for the 55 year old in California apply if he’s had a history of heart problems? Or if he’s diabetic? Or if he’s HIV positive? No? Didn’t think so.

      Why SHOULDN’T someone with a history of heart problems pay more for insurance?

      2) If the answer is no, then the “real” reform touted by Bailey is meaningless. To make it work, the government would have to mandate community rating and guaranteed issue. OR the government would have to mandate that people carry “health status insurance” from an early age, and prohibit them from letting it lapse.

      Community rating is WHY insurance companies try to get rid of high risk individuals (i.e. people with pre-existing conditions). If they were allowed to charge these people rates that were commensurate with their actual risks, they wouldn’t be refusing them.

      3) Or not. We could simply continue to be the only rich democracy that allows its own citizens to lack insurance coverage. I’m not here to bash the libertarian world-view; I acknowledge reasonable people can differ about the role of government. But apparently most folks view widespread non-coverage as a serious problem. I just think politically, it’s a non-starter.

      No, actually, most folks don’t view widespread non-coverage as a serious problem. Most view COST as a problem. This bill (and any bill that attempt to provide everyone with universal, unlimited, healthcare) will cause massive cost escalation. At some point, sombody has to say “no”. I’d much rather it be the patient making his own cost-benefit analysis then a government bureaucrat.

      4) And what do we do about the affordability problem for out of pocket, “plannable” health care expenditures? Sure, reducing the role of third party payers and deregulation and cartel reform would enable prices to come down, but not enough for, say, a single mother earning $25K to pay for adequate preventative care for her two children. And how would such a person afford an extra two or three hundred a month for catastrophic insurance for her family?

      How do you know how much costs would come down if some competition and consumer price signals were injected into the market? Basic doctors visits are surprisingly cheap. I was at a Concentra Urgent Care clinic recently, and they have prices posted above the counter, ranging from $129-$349 for doctors visits. $129 is not an unreasonable price to pay for routine checkups. Unfortunately, most people have no idea what health care actually costs, because they have insurance provided by someone else.

      5) So, the point is, even the kinds of market-friendly “real” reforms desired by libertarians will require a healthy dollop of government regulation AND heaps of government cash (subsidies) to make work, unless, again, we’re prepared to let millions of less affluent people and their children go without adequate access to health care. Moreover, enacting the type of system approved of by most libertarians would require A) dismantling Medicare and/or B) convincing the GOP that spending more money on domestic concerns (money for subsidies so people can afford high deductible and health status plans) is the right thing to do. We all know neither of these is going to happen any time soon, for reasons of politics.

      What you fail to acknowledge is that any government subsidized, run, or otherwise manipulated system, would be forced to refuse treatment to some individuals for some reason, out of the simple fact that health care resources are not infinite. Either care is rationed, or we have waiting lists, or some people won’t be able to pay. Yet, at least in a free market systems, the price signals are in the right place to drive innovation and direct resources towards the most urgent medical issues. If you regulate and impose price controls and subsidies, you skew the allocation of those resources towards political ends.

      1. Why SHOULDN’T someone with a history of heart problems pay more for insurance?

        Because a system where such pricing strategies are widespread is worthless — because millions of people simply won’t be able to protect themselves from ruinously expensive medical crises; nor indeed access the health care necessary to save their lives.

        If they were allowed to charge these people rates that were commensurate with their actual risks, they wouldn’t be refusing them.

        And again, millions of people simply wouldn’t have insurance coverage if insurance companies burdened individuals with the cost of their own health risks. I shouldn’t think any rational person would enjoy living in such a Dickensian dystopia. Perhaps you’re a masochist, Hazel?

        How do you know how much costs would come down if some competition and consumer price signals were injected into the market?

        Because people who spend years and years in graduate studies don’t work for peanuts. Even fairly massive price drops will still leave some people unable to afford medical treatments.

        What you fail to acknowledge is that any government subsidized, run, or otherwise manipulated system, would be forced to refuse treatment to some individuals for some reason, out of the simple fact that health care resources are not infinite.

        I don’t fail to acknowledge this at all. I prefer rationing by explicit rules — under the oversight of the community as a whole — with an eye toward providing a basic level of care for all citizens — to rationing by age and income as we do now. That said, I have absolutely no problem with the notion that, in a free society, a person ought to be able to spend as much of their own money on as much health care as they can damn well consume — so long as a safety net that covers everybody is in place. Like Hayek and Reagan, I believe such a society is both more moral and more fun to live in.

        1. I am not responsible for anyone’s health issues or expenses, and I do not demand – at the point of a government gun – that anyone be responsible for mine.

          I am in my 50s, make less than poverty level income annually, have health problems and no insurance. But I do not wish to coerce my fellow citizens to help me. Nor should you, regardless of what type of society you think it would be more fun to live in.

          1. So just think of it as another form of national defense. You can stomach a massive worldwide war machine without crying apocalypse, right? How about health security? What’s the difference, really, except that more people die from health problems than from invasion of the homeland in this country.

            1. Because national defense is one of a handful of Constitutionally-mandated duties, Tony.

              Health care is not one of those duties. Read ANY copy of the Constitution – they’re all the same, unless they’ve been REwritten – and I triple-dog dare you to find your ideas contained in any of them.

              1. Ok, so forget about the constitution. Maybe it’s flawed? The fact that a health bill will not be declared unconstitutional won’t change your mind, so just go with the hypothetical.

                1. Yeah, let’s just forget one of the most historical documents ever created. Maybe we should write a NEW one that fits your parameters, eh? Maybe write-in a “right” to health care this time, as it does not exist otherwise?

                  Wait, it still wouldn’t exist. But you’d still insist on it, for some idiotic reason.

          2. “But I do not wish to coerce my fellow citizens to help me. Nor should you, regardless of what type of society you think it would be more fun to live in.”

            No, you wish to coerce the majority of citizens who want socialized health care into not having it.

            I’m sure it’s wonderful that you’d rather die from lack of care than accept the fact that you might need help from other people. I’m sure you think that makes you a hero.

            But most people don’t want to die that way. Nor should they have to. And a political theory (or a Constitution, for that matter) which requires such senseless death should be considered useless.

            Also, that line you used- “at the point of a government gun”. Do you use that freely, or is it required of all libertarians?

        2. Jasper-“I prefer rationing by explicit rules — under the oversight of the community as a whole — with an eye toward providing a basic level of care for all citizens — to rationing by age and income as we do now”

          So basically your saying that Young people should get free shit – doctors visits, medicine, fixed up from accidents – and fuck the old sick ones.
          Because hey that’s what herds do right.

  28. this is exactly the direction we need to move in. I think the current plan will collapse of its own inefficiencies before the end of the coming decade. this is the right solution.

    1. That’s a beautiful sentiment — unfortunately, it neglects the obvious truth that once this passes, hell will freeze before TheObama/Reid/Pelosi/et al. say anything about its inefficiency (or any of the infinite other defects associated with this unconstitutional monstrosity). Do you really think these people will just let the system collapse?? Really?? Everyone will be both dead and bankrupt before this thing ever ends.

  29. Or….we could just make it illegal to sell health insurance, since that is gambling on people’s health, and then just take over the whole field and run it with the government. And, the more I read the moronic rhetoric from the right, the more inclined I am to do just that.

  30. Why are health care significantly costs per person lower in every nation with mandated universal coverage by large margins, with the outcomes no worse, and generally better in every case?

    The worst of the nations is Switzerland which was like the US in 1994, but instead of defeating reform as the US did, passed reform in 1994. Its costs were rising rapidly before that, with the insurers attempting to control costs by throwing their higher risk customers under the bus of denying coverage.

    The Swiss are disproportionatlely ahead of the US in medical industry, with a lot of major drug companies and medical device makers, and the Swiss are very much into profits and competition. If the Swiss couldn’t figure out how to make the market solve the problem, why would anyone think the US could?

    When it comes to what form of universal coverage, one can pick from dozens by looking at the Swiss system, which is as close a model for what Obama proposed as any.

    But you can also pick from the diverse systems of Canada, Israel, Germany, Japan, Taiwan, France, Britian, Australia, Denmark, Norway, and the list goes on for a total of about three dozen.

    All have lower costs, and the working poor aren’t denied treatment, as in the US, which translates effectively into infinite waiting times.

    The US tax payer pays as much per person on health care as the Canadian tax payer does, but in Canada, everyone is covered at the same basic level as about half the workers in the US who are covered by employer plans at a cost to themselves and employers about five times greater than Canadians pay privately for health care to upgrade their Medicare to the level of the best US plans.

    And Canadians live about two years longer. But perhaps that’s because when Canadians go to the hospital to die, they are put on a two year waiting list and sent back home to live another two years of normal life.

    I see the nations of the world as market tests, and until someone points to a nation with health care delivery that is better than the rest and cheaper that isn’t based on universal coverage, I’ll simply point to the market failures of the individual markets in the States with little regulation, where the insurers basically level it up to Medicaid to cover the people the insurers don’t find profitable to cover. And that’s why the US taxpayer pays as much for government run health care as Canadians do: all the people the insurers refuse to cover end up getting really sick, go bankrupt, and then when the most expensive treatment is required, the taxpayer pays the bills.

    But hey, ideology makes people blind to the clear evidence of the competing health care models around the world their ideology is wrong. I’m sure Mr Bailey is convinced the world is flat, too.

    1. Great comment mulp.

  31. I don’t buy your argument that allowing customers to shop around for the cheapest rates would help bring down the costs. In the same way that consumers shy away from a “bargain” tv or computer, they would shy away from a bargain surgery. If the surgeon is an excellent one then he deserves the high rate of pay that he gets. You get what you pay for, if you pay cheap for a surgery then you get a a surgery of shoddy quality. You’ll have consumers gravitating still toward the most expensive doctors, not the “bargain basement doctors”.

  32. Widen-Bennet was real healthcare reform unfortunately the GOP and the club for growth all were against that too. GOP was never going to propose a solution for healthcare reform.

  33. Has anyone seen a projection on just using the existing screwed up mangle of regulation and subsidizing 20 million people? What does that cost? I can’t see it costing more.

  34. I don’t buy your argument that allowing customers to shop around for the cheapest rates would help bring down the costs. In the same way that consumers shy away from a “bargain” tv or computer, they would shy away from a bargain surgery. If the surgeon is an excellent one then he deserves the high rate of pay that he gets. You get what you pay for, if you pay cheap for a surgery then you get a a surgery of shoddy quality. You’ll have consumers gravitating still toward the most expensive doctors, not the “bargain basement doctors”.

    Yea, because, all those shitty bargain basement doctors don’t exist under single payer.

    We can sit here all day pulling anecdotal crap out of our ass and it still won’t matter.

    Show me one good gubmint program that is run efficiently, saves money and costs what it was stated to cost from the get go.

    yea. I thought so.

    Now piss off and get out of my health care. mmkay?

    Ex

    1. Ugh, the idea that health care should be provided for by basis of “efficiency” is sickening. It sure would be “efficient” to only provide insurance to the healthy, drop coverage for the sick and elderly and predisposed to illness, and charge the hell out of everyone for providing very little real service. Yeah, that would be really efficient, it would really grease the stockholders’ wheels. The whole point of this situation is that health care isn’t about “money” – we’re the wealthiest nation in the world, it’s about time we start using it to actually better the lives of our citizens, rather than just piling it up in increasing dividends and leaving those too misfortunate to be born with trust funds behind.

  35. There are some problems with markets, too. First, there is problem of monopolies and cartels. Then, there is denying of treatments. If you do have critical illness like cancer, arguing are available and which not is last thing you want and need. Next is declining high-risk patients. How you deal with those? In reality, insurance should deal with expensive emergencies, leaving patients to pay small expenses (like family doctor) out of pocket.

  36. This assumes there are enough medical practices around to avoid monopolization, which seems incredibly unlikely, especially in small towns where the number of doctors and hospitals one can go to is rather small. Also, have we not just seen what wonders unregulated free-market policies did for finance and the economy at large? There’s a ton of regulation in the current reform that I have absolutely no reason to believe would ever become enacted otherwise, no matter the level of competition, that is absolutely vital to consumers. It takes a man of truly blind proportions to advocate unfettered free markets as a cure-all to everything – but I guess that’s been Reason’s MO from the get-go. May we be hopeful the only ears this falls upon are the already converted…

  37. Sure, reducing the role of third party payers and deregulation and cartel reform would enable prices to come down, but not enough for, say, a single mother earning $25K to pay for adequate preventative care for her two children. And how would such a person afford an extra two or three hundred a month for catastrophic insurance for her family?

    So what you’re really interested in isn’t health insurance so much as it’s wealth redistribution.

  38. The article misses the biggest part of the reform, and that is that doctors prescribe tests, medicines, etc., to avoid malpractice suits, not to increase their incomes. Add tort reform to your ideas, and then you will have a chance to a true superior healthcare system at an affordable price.

  39. I don’t think this argument about rights/entitlements is complete without addressing personal responsibility.
    You do not have the right, nor are you entitled to rob me of the bounty of my hard work just to fulfill your needs or demands.

    I also think it’s factual that some people exercise their “rights” much more often than others, especially when they abuse healthcare or the people who provide it. Ask the ER people about the large quantity of people who continually show up with the same issues (drug, alcohol, etc., etc., etc.).

    Perhaps, as some say, healthcare is a “human right” but what really concerns me about universal healthcare provided by the US Government is that fewer & fewer taxpayers have to pay the way of more & more freeloaders.

    Why demand so much of me while others demand so little of themselves.

  40. That is exactly the concepts I’ve been thinking. The only additional step govt could do to lower health care costs would be to make it a tax-exempt industry. Govt sucks billions out of the health care industry just to dole it back out? Let them keep it and charge the patients LESS to start with!

  41. If you really want healthcare reform which controls costs, examine the following concept and ask yourself this question. Why has the concept of state Medical Public Service Commissions (PSC’s) not surfaced? We have seen in areas where there is a competition problem that PSC’s can do a good job. Let’s turn the problem of healthcare costs over to state PSC’s.

    In so doing there are numerous hidden benefits that you would not expect at first blush as follows:

    1. PSC’s will determine the basic cost of each Medical Charge Code used by providers to bill insurance. If the current medical charge code manual is not specific enough for some procedures, new medical charge codes can be added to help narrow these costs. Then these determined costs will be adjusted for inflation annually until reviewed again and a new cost basis set. In addition, the PSC will calculate a market adjusted mark-up percent for fair and reasonable provider profits for the coming year. The provider mark-up percentage will be determined by a new market ‘check and balance ‘ mechanism unavailable until now. More on this later.

    2. Because some Zip Codes have inherently higher costs than rural areas, the co-pays may vary by Zip Codes to offset these cost differentials so the Medical Charge Code cost basis can be leveled across the state. These office visit co-pays would be standard across all insurers in a Zip Code and paid by the patient. These co-pays should not deter patients from seeing their doctor.

    3. The PSC eliminates provider networks and provider service contracts. Thus, competition between providers is increased because insurance no longer delivers a pool of patients. Patients can go anywhere in the state and use their insurance because all insurers pay the same for identical services as set by the PSC.

    4. Insurers now compete solely on the price of their policies because the doctors/hospitals are no longer tied to their networks. All insurance is accepted by the doctors/hospitals because they all pay the same PSC rates.

    5. The elected State Insurance Commissioner may increase insurer competition quickly, if needed, by soliciting outside insurers to come into the state and compete. There are no network or provider service contract requirements.

    6. The PSC can greatly reduce the over prescribing of medical services by the way the provider mark-up (profit) percentage is determined. It can tie the profitability of the providers to the profitability of the insurers. If the profitability of the insurers decline because of the overuse of medical services, then the mark-up percentage for the providers is reduced on every Medical Charge Code. The providers will then think twice about how they prescribe healthcare because it now directly affects their profits. This one feature alone will cut healthcare costs significantly.

    7. Tying the provider mark-up to the net profit margins that private insurers earn in the state creates a healthy ‘check and balance ‘ mechanism. If provider costs go up, profits of both go down. If profits go up above what the average state business earns, the State Insurance Commissioner can intervene and license new outside insurers to compete and lower premiums, if necessary. But both the insurers and providers have a right to earn a reasonable profit, so the elected State Insurance Commissioner will only increase insurer competition when it becomes necessary to reduce average insurer profits for the benefit of the public when these profits noticeably exceed what other state businesses earn.

    Note: If insurer profits surge due to the more efficient delivery of healthcare, then the insurer can invoke a mechanism to reduce gross profits with offsetting insurance policy premium reductions. This results in a lower net profit for the insurers which the PSC will use to determine the provider mark-up percentage for the coming year. Thus by lowering premiums, the insurer gains a direct cost reduction for the coming year from a lower provider mark-up percentage. This allows the insurers and providers to earn fair and reasonable profits and policyholders to pay lower premiums. If the insurer refuses to lower excessive gross profits, then the State Insurance Commissioner may intervene and policyholders may react by dropping the insurer for a new one during the end-of -year sign-up period while retaining their same doctors/hospitals.

    8. The PSC does not make healthcare decisions and does not affect the doctor-patient relationship. The full time job of the state Medical PSC is determining the cost of Medical Charge Codes. The PSC will standardize these codes to make filing claims easier for doctors/hospitals.

    9. The above discussion on computing the provider mark-up percentage eliminates the current adversarial relationship between providers and insurers and lets market forces determine the common profit. Another more simple but less ideal approach would be for the PSC to set the mark-up percentage based on some other criteria. The choice of method would be up to each state.

    10. As you will note, the previous discussion portrays the Medical PSC as more a state Price Commission than a regulatory body. The role that this PSC plays in each state would be up to the state legislature and could evolve over time.

    The state Medical PSC concept has amazing potential. Not only does it break the bond between doctors/hospitals and insurance companies, but it offers a ‘check and balance ‘ system to spread the wealth among providers, insurers and policyholders. Without a doubt, this approach has never been contemplated before and will position the American Healthcare system to control costs as healthcare is expanded by Washington. Congress does not know about this brilliant idea. Please write/call your state and federal representatives and tell them that we must have state Medical PSC’s.

  42. I have a few sincere questions to ask of those who favor government involvement in aiding (at least some) individuals to more easily obtain health care/health insurance:

    1. Assuming, for the sake of argument, that I have a moral obligation to help them, on what basis do you justify using government to compel me to meet that obligation?, and

    2. Assuming I have such an obligation and that it is appropriate to use government to compel me to meet it, why the Federal government and not merely a program for each State?

    Please forego the snark for just a minute. Let’s call a truce, at least temporarily. I’m wracking my mind and I truly can not understand the apparent connection in your mind between the premise that I have an (alleged) obligation to help those in need and – even apart from all the economic arguments one could bring to bear – using the Federal Government to carry out this plan.

    Smaller, side questions:

    3. If a person of higher wealth has a duty to provide assistance to one with less, where does the hot potato stop? Should someone with, say, $100k annual salary help him with only $50k, who should help the one with $20k, who should give a portion to the one who makes only $10k, etc.

    4. How does the level of health of individual X influence the calculation in (3)? For example, does a person with a heart condition who makes $100k have less of an obligation than someone who makes $50k per annum but is perfectly healthy? I.e. How do you quantify severity of illness?

    If you choose to answer, please don’t bring in extraneous issues like the size and cost of the military, etc. Let’s assume, if you want, that the existence of and coercive funding for any Federal function is equally problematic, morally speaking.

    1. This is difficult to explain easily.

      Some of the ideas originate from the enlightenment period. Thomas Jefferson summarized it pretty well with his phrase from the declaration of independence that all men have an inalienable right to “life, liberty, and the pursuit of happiness.” Generally this is an amalgamation of the Hobbes’s and Locke’s “natural” rights that all humans share. At the base is the notion that people have a right to live and a right to protect their life at all costs.

      Note that “life” comes before “happiness,” or “property.” Those are useless if your life is in danger. So in an uncivilized society, I am completely justified to do whatever it takes to save my life, including stealing from you, killing you so that you don’t kill me, etc… People form societies and governments so that people protect each other’s natural rights. I think these are the fundamental issues at hand.

      So in a civilized society, it’s expected that everyone will give something so that the society as a whole can enjoy those rights. I include “health” as part of “life.” If you become unhealthy, you cannot work, therefore cannot “pursue” anything. If the purpose of government is to protect the rights of people in society, it has to protect their ability to exercise those rights. I can’t exercise my right to property in a civilized society without a justice system, so how can I exercise my right to life if I can’t afford to sustain it in the event of an illness? There’s your answer to #1.

      Also some of it I think comes from Christian theology. Both the Old and New testaments make it clear that you are supposed to help the poor and less fortunate. So much so that Jesus said in Mark 10:23 “How hardly shall they that have riches enter into the kingdom of God!” Those that accumulate more have an obligation to give more. If they do not, they are failing as Christians. Again, Jesus said in Luke 12:48 that “For everyone to whom much is given, from him much will be required.” So the more you have, the more you should give. There’s your answer to #3.

      I don’t really have an answer for #2, but frankly states rights arguments have been used to justify a great deal of inequality in America’s history, so I don’t think unequal health coverage by state is acceptable.

      Sick people are vulnerable, and I think it is society’s responsibility to take care of them while they are in that vulnerable state. It’s part of the price we pay to be civilized.

      Now, the level of sickness that separates those who give from those who receive is up for debate, so I have no answer for #4. Those are the kinds of details that make up 2100 pages. There’s just too many variables in that determination to address here.

      You asked where the obligation lies, so I tried to explain where I think it lies within western thought. I hope bringing philosophy and religion into the discussion was not too extraneous, but we’re talking about moral obligations, and the fundamentals of morals are to be found in philosophy and religion.

      And it is Christmas, so the references to Jesus seem appropriate.

      1. Jefferson is spinning in his grave. “The Lockean (and later Jeffersonian) rights are all negative rights. They exist in a vacuum. Everyone has them unless they are taken away. This stands in contrast to positive rights that have to be taken from someone else. In fact, attempting to give someone positive rights usually infringes on the negative rights of someone else.” Additionally, the Founders rejected Hobbs when it came to limited govt. You apparently don’t.
        Life=Health=forced servitude to give others “working health” to pursue happiness=the only definition of a civilized society, is neither a historically correct understanding of the founding documents nor is it compelling logic. I do appreciate your effort to make your case without doing violence to our Declaration of Independence. I’d like to see you develop your points in a way that appreciates the sacrifice (that you demand) that others will have to make to insure your well being.

      2. “Health” is not a part of “life.” If you’re going to invoke Hobbes and Locke as the foundation of the Jeffersonian “life, liberty, and pursuit of happiness” trifecta, you cannot ignore the state of nature about which Hobbes and Locke wrote. In this perilous, ungoverned state, every breath was uncertain because everyone was entitled to everything, leaving man in perpetual fear and forced to defend his very existence at (potentially) every moment. Hobbes was not calling life “nasty, brutish, and short” because there was no free/subsidized doctor to visit to ensure one’s health. He called it that because your neighbor could kill you with no remorse or repercussions. As such, this plea that man has a natural right to life is far more fundamental than you’re acknowledging: it is a right to not be killed by another person, a literal right to have a life (not a long life, not an easy life, not a prosperous life, not a healthy life — simply life.)

        Moreover, this is a pretty flagrant misinterpretation of social contract theory: “So in a civilized society, it’s expected that everyone will give something so that the society as a whole can enjoy those rights. I include “health” as part of “life.” If you become unhealthy, you cannot work, therefore cannot “pursue” anything. If the purpose of government is to protect the rights of people in society, it has to protect their ability to exercise those rights.”

        Giving something to society is not at all the point. The social contract works simply because you forfeit your right to kill me and I forfeit my right to kill you. In so doing we agree to live harmoniously (relative to the condition before these rights were forfeited) together, under a system with the ability, granted by the both of us, to punish those who renege on this promise to not kill the other person. A person who agrees to live according to this contract – the “civilized” as you say – have no obligation to GIVE anything to the collective. Instead, they obligated to give UP something, specifically their previous right to do whatever they want whenever they want. Their membership in the social contract rests on this and this alone; it has nothing to do with giving something to society at large.

        As to the biblical component of your argument, yes, Christianity does encourage giving to those less fortunate. But, too often, those who attempt to use the Bible as justification for government mandated, forced care of society’s poor and unfortunate ignore passages in the Bible dealing with personal responsibility. (They also conveniently ignore passages directly relating to tithing, the Church’s way of helping the poor, and how it should amount to only 10% of income…) If it is my Christian duty as a more fortunate member of society to help those less fortunate, it is simultaneously their Christian duty to help themselves. I have absolutely no problem assisting someone who is clearly trying to make something of their situation, and I think this is the sentiment adopted by most fortunate people. What I do have a problem with is the government forcing me to do this. As you said yourself, “the more you have, the more you SHOULD give,” indicating it is the morally upright thing to do but nevertheless a personal choice.

        But perhaps most importantly, while the Bible certainly emphasizes charity and helping the poor, it places equal emphasis on doing these things out of desire and with a pure, giving heart. A Christian should want to give; the end. To be sure, the act of giving has immediate material benefits for the less fortunate. But in Christianity it is also intended to mean something to the giver. If a genuine desire to give and help others is lacking, the gift is degraded and arguably meaningless. This dimension, too, cannot be brushed aside when scanning the Bible for select passages substantiating what is essentially redistribution of wealth (which is a form of property…but that’s another issue).

        If this religious argument is going to be made at all (the fact that atheistic liberals so readily turn to it proves they are grasping at straws), employ the sources properly and wholly. Otherwise, stop bastardizing the religion and using it as cover for an invasive, statist agenda.

  43. “allowing the money employers spend for insurance to be converted into additional income for the employee.”

    I find this particular line to ignore the reality that the one place corporations and business always want to cut costs is in payroll. If employers were not forced to provide insurance they would not take the savings and spend it on payroll for common employers. Instead, it would probably go as bonuses or dividends for the leadership.

    1. Nevins,

      Businesses began providing health care, not because they were forced to but because the allowable salaries were capped by Washington forcing them to find another way to compete for top talent. The employer provided health care mandate came later.

  44. The best piece on health care I’ve seen all year, bar none.

    Pay attention to Ron, folks. This is where we’re eventually going to end up; as with Communism, the only question is how much misguided socialist failure we have to endure first before people wake up.

    The central lesson of the 20th century is that you cannot wring efficiencies from an economy using central planning, and the effort only creates misery, poverty, and chronic shortages.

  45. My wife and I started a website that compares providers, hospitals, and empowers consumers to make choices.

  46. ?Free WordPress Themes WordPress Voting Plugin What would real health reform look like? By admin | December 28, 2009 Rating 3.00 out of 5 [? ] Submitted by Eye Didn’t Know Blog For the answer, read this excellent article in January’s issue of Reason Magazine. Hint: it looks nothing like Congress’s or our president’s idea of “reform.” Comments Name (required) Mail (will not be published)?

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