Obamacare

How Health Care Innovation Works

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John Goodman of The National Center for Policy Analysis makes an important point about innovation in health care:

Wherever there is third-party payment, the goal of innovation is to produce more products that qualify for reimbursement, even if the effects on patient outcomes are only marginal. Wherever there is no third-party reimbursement, innovators are focused on ways to lower costs and raise quality.

For a long time, there has been a serious case to be made that the problem with health care in the U.S. is not too little insurance, but too much. Because so many people—including employers and, in some cases, health care providers—view health insurance as a form of medical prepayment rather than as a hedge against significant financial risk, we've developed a health care system in which innovations are designed primarily to satisfy payers. But the problem is that, in all but a few cases, the payers are not the patients. Yet as Goodman points out, in those few cases in which the patients pay for themselves—walk-in clinics, cosmetic surgeries, Wal-Mart's drug pricing—we've seen exactly the sort of quality-and-cost-focused innovation that liberal health reform advocates are constantly trying to impose from above. As I've said before, America's health policy debates occur primarily between centralizers and decentralizers. Somewhat unfortunately, I think, the centralizers are winning most of the big public policy battles. But in their own small worlds, the decentralizers are the ones showing results.

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  1. “But in their own small worlds, the decentralizers are the ones showing results.”

    I think we need a centralised National Board of Efficiency to determine whether these ‘successes’ really deserve to be called so. I mean, come on guys, how many government jobs did they create?

    That’s what I thought.

  2. Somewhat unfortunately, I think, the centralizers are winning most of the big public policy battles.

    Somewhat unfortunately, Pete? Jeebus, are you going for the Dave Weigel Memorial Chair at Cosmotarian U or something?

    1. It’s British understatement. What he really meant was “Catastrophically, I think. . . .”

      1. x2. That British understatement is a bitch. My mother has felt “not bad” my entire life.

        1. I say, that Blitz was a bit of a rough spot, wasn’t it?

          1. My good man, no reason to lose your head.

      2. “Sorry, old boy, I heard you buried your wife last week.”

        “Yes. Had to. Dead, you know.”

    2. No shit. Show some backbone. Seriously. “Somewhat”…”I think”…have you settled into married life that quickly?

    3. Is the Cathy Young Chair for Hedging still open?

  3. what? not alt-text saying “Hi Everybody!”

    1. sooth, I am disappointed

    2. SRSLY. This alt-text was a gimme.

    3. “The knee bone’s connected to the…something. The something’s connected to the…red thing. The red thing’s connected to my…wrist watch. Uh oh…”

  4. “Well if it isn’t my good friend Mr. McGregg, with a leg for an arm, and arm for a leg.”

    1. Did you go to Hollywood Upstairs Medical College too?

    2. Holy smokes! You need booze!

    3. Instead of chewing gum, chew bacon

    4. “Don’t worry, it’s INflammable”

  5. “Third-party payment took away one of my fingers.”

  6. Now if libertarians would just grasp that “third party payer” problems are not specific to government, but rather insurance, we might just get somewhere.

    Yes, health insurance (and any insurance to some degree) creates a third-party-payer problem, which can be and is a major market failure. It is also a necessity. Get back to me when you are ready to admit this.

    In general, conservative plans to “fix” the TPP problems of health insurance are nothing more than plans to weaken the insurance. The problem is that long before you make any real dint in TPP, you start bankrupting people.

    1. The definition of “market failure” is not “things that make Chad soil his pretty pink panties”.

      1. There are no such things as market failures because everything the market does is by definition good and pure, right?

        Never mind that the excuse for radicalizing our economy into a free market is that the free market supposedly produces the best outcomes. Except when it doesn’t, in which cases that’s okay, because outcomes aren’t important. Or something.

        1. Define what you mean by “the best outcomes”.

          The best for whom?

          1. Best you not be askin’ too many questions, college girl.

          2. I think ends are important, and the market is an instrument used in achieving certain ends, but shouldn’t be an end unto itself.

            But you guys are no less concerned with ends, they’re just different ones. You think a free market would lead to the most freedom, right?

            1. I think people should be allowed to choose which ends are important to them.

            2. Re: Tony,

              I think ends are important, and the market is an instrument used in achieving certain ends

              No, Tony, that’s action. The market is a result of the myriads of interactions and decisions made by everybody, just like evolution is the result of all species struggling and surviving (or dying). The market is NOT an end unto itself.

              1. The “market” is not a “thing,” it is the description of a process.

            3. Tony, there have been plenty of examples of how the market achieves the best ends for everybody, except the powerful in Washington and their puppeteers. How about things that insurance hasn’t taken over, like plastic surgery and lasik? Cheaper, and better in about 20 years, thanks to the market. And don’t bother with any of that crap about elective operations not counting… Tell me how it’s any different? If I NEEDED Lasik right now, I would benefit from the cheaper price that early adopters willing to pay for it encouraged. Sure, early on in any new breakthrough, it would be expensive, prohibitively for some people, but there were plenty of fraternal organizations, charities, and churches offering help to the people that really needed it, but people that could afford care just paid for it.

              1. Mike I’m not denying that the mechanisms of supply and demand exist, I’m just saying they’re not sufficient to deliver a just society. The idea that they are rests on assumptions including people being rational and starting from a level playing field. Apart from these assumptions being totally false in reality, there’s not even a theoretical basis for them. You might as well have pulled them from thin air.

                1. The irrationality of the players doesn’t make a market’s outcomes unjust. It may make them suboptimal, but not unjust.

                  Inequities in the laws do create injusticies. If the rules do not treat all individuals equally, or if they are not enforced equally, then the outcomes will be skewed.

                  But you don’t just want to correct for inequities in the rules, you want to correct for inequities in the starting positions, without having a good measure of inequity in the starting posititions. You end up measuring outcomes and using those as a yardstick to adjust starting positions – until the outcomes are equal.

                  Moreover, under the the bureucratic regulatory system that you advocate and support, you get arbitrary rule inequities, selective enforcement, and corruption.

                  The libertarian system is that you make the rules simple, minimal, general, and universally enforced.

                  Equality of enforcement means that the law can’t favor players that have more political influence. And less restrictive rules create more opportunities for people with weaker starting positions to get catch up.

                  The more regulated the system is, the less room there is for innovation, and the more static the economic relationships are. That tends to preserve economic hierarchies. Radically innovative societies have more economic churn, because the establish methods are always getting overturned. Upstarts have a better chance of correcting for a poor starting position in such an economy.

                  This is preferable to adding additional class-specific rules that create more inequities between individuals, to attempt to correct for differences in starting position within a relatively static economy.

                  1. kquote>You end up measuring outcomes and using those as a yardstick to adjust starting positions – until the outcomes are equal.

                    No. I believe in a level playing field as the ideal. My system allows for just as much competition and innovation as yours, it is just more democratic and fair. These can be said to be utilitarian: it increases the resource pool for talent. People can only innovate when they’re not starving.

                    The more regulated the system is, the less room there is for innovation

                    Again, no. Because innovation has to exist in a regulatory environment doesn’t mean its suppressed. It will always have an environment, and what nature and society offer are a lot more arbitrary than what good regulations offer, such as a baseline of safety standards for a coal mine. If market innovation can break through natural barriers it can deal with regulatory ones and it can certainly deal with a social welfare society–I’d argue it is highly enhanced by it.

                    1. My system allows for just as much competition and innovation as yours,

                      Tell that to people who are put out of business by laws against holding winetastings in their store, or requiring them to use a specific procedure or technology in their process, or arbitrarily imposing regulations that lack a scientific foundation upon them(i.e. genetically modified foods).
                      The so-called “precautionary principle”,supported by many left-liberals, would pretty much ban marketing any new technologies for 50 years until after development.

                      it is just more democratic and fair.

                      “Democratic” != “fair”.
                      If it were, then it would be fair to randomly throw one individual out of 100 off a cliff to appease the Gods.

                      People can only innovate when they’re not starving.

                      Ever heard the phrase “necessity is the mother of invention” ?

                      Because innovation has to exist in a regulatory environment doesn’t mean its suppressed.

                      Yes, it does. There are countless examples. We would have GMO wheat by now if it wasn’t for the anti-GMO lobby and the FDA’s consequent hyper-sensitivity.

                      Any time the government tells you you *can’t* do something, or you *have* to do something a specific way, it NECESSARILY precludes other options.

                      The regulator doesn’t care if what you want to do acheives the same end through different means. They care if you adhere to the specific letter of the regulation. Even if the regulation makes no fucking sense.

                      See the endless examples posted by Reason on this blog. Homebrewers in oregon can’t let their product outside the home.

                      You would have to be completely crazy not to think that regulation stifles innovation.

                2. Re: Tony,

                  Mike I’m not denying that the mechanisms of supply and demand exist, I’m just saying they’re not sufficient to deliver a just society.

                  Oh, how quaint – you want Paradise to return to the Earth, not to toil and moil.

                  Who said Statists are not nostalgics?

                  1. Not as nostalgic as you, who wants to return us to the Eden that was the late Pleistocene.

        2. No. There are no such things as market failures because society is not a party to market transactions. Whether those transactions are efficient or optimal, from the standpoint of society, is approximately as important a consideration as whether your cat approves of your taste in aftershave.

          Even if a free market consistently produced the least efficient or optimal outcomes, from the standpoint of society, it would still be superior to any alternative, because freedom is a higher order value than efficiency.

          1. “market failure” is an economic term that has been wildly distorted by liberals who have turned it into “something i dont like.”

            The technical term is a case where the market produces a sub or over optimal level of goods or services so that it is not opperating at the point that marginal cost equals marginal benifit.

            This occurs mostly in the case of an externality or a sitution where a compeditive market does not exist, ie. an unregulated gas utilitie.

            The fact that everyone can not afford healthcare is not a “market failure.”

        3. Re: Tony,

          There are no such things as market failures because everything the market does is by definition good and pure, right?

          There are no unicorns, thus we must have evolution failure.

          Right, Tony???

          Never mind that the excuse for radicalizing our economy into a free market is that the free market supposedly produces the best outcomes.

          Tony’s dishonesty at its best. Letting people freely exchange goods is seen by him as “radicalizing.”

        4. Chad and Tony in the same comment thread. Wow! It’s like a double header of dumb!

    2. But you ignore the fact that the expansion of TPP is itself an artifact of state intervention, Chad. Remove the tax advantages of buying these first-dollar policies and they will quickly become obsolete as people recognize their obvious inefficiency.

      This will actually strengthen insurance even as it weakens the pre-payment aspect of these policies.

      1. If you are insured, there is full TPP, regardless of who pays for it.

        Btw, you should look at Japan and Singapore. They use quite high co-pays (with out of pocket maximums) to combat TPP, and it works pretty well. Of course, they cover everyone all the time, to prevent adverse selection.

        1. The problem is, in great part, due to the fact that providers have gotten into the habit of billing the insurers directly. If I have insurance, submit a claim, and get money for some calamity that befell me, the insurance company is not and never a true “third party payer.” I am the payer; it’s just that my level of means varies with the number of valid claims I can make under the insurance policy. On the other hand, to the extent that insurance covers only a percentage of my procedures and the providers bill my insurance directly, the insurance company becomes the dominant “payer.” I am left to make co-pays, or the difference between the doctor’s or pharmacist’s bill and what the insurance company pays. This puts me in a weak (or non-existent) bargaining position, especially as many of my shopping-around options are foreclosed due to contract relationships between providers and plan administrators.

          For “health insurance” to function as much as “pure insurance” as possible, the insured would submit claims and receive fixed dollar amounts for each eligible event (or the actual amount of the related expense, perhaps limited by some cap). Under that scenario, would insurance companies qualify as “third party payers”? I don’t think so, and I do think that such a situation would help put patients and doctors back in the driver seat.

        2. No, Chad, if I have a high-deductable policy, then it’s insurance. What we have today is medical pre-payment plans, as you seem to understand with your comments on Japan and Singapore. Of course, those societies are monocultural and thus such things operate with a high degree of cultural assumption. We don’t have that here.

          1. as an example, in home and auto insurance, where there is not a distortive tax subsidy, how many first dollar plans are there? We dont use auto insurance to get an oil change. Theres no reaosn to believe that health insurance wouldnt also actually go back to becoming insurance if the subsisdy was removed.

    3. You don’t consider a the government a “third party” ???

      1. No, Hazel. The problem is that YOU don’t consider your insurance company as a third party.

        Ironically, I just got back from the doctor’s office, where I turned down some tests despite private TPP. Not everyone is like me, though.

        1. C’mon Chad. Of course Hazel does. What makes you think otherwise?

          Non-catastrophic “insurance” is the issue. Having your employer pay for it only compounds the problem.

          1. Again, I suggest that you look at the systems of Japan and Singapore. They closely resemble your “catastrophic” insurance…for everyone, all the time.

            1. I don’t recall arguing against Singapore or Japan health systems. Not even sure why you’re bringing it up, since they aren’t remotely comparable to Obamacare or anything proposed by the Democrats.

              1. Are you agreeing that we should drop our entire system and replace it with Japan’s? I’ll take that deal in a heartbeat.

                1. If along with it came the much more healthy eating and lifestyle habits, sure. The fact is that Japan and Singapore do not in any way resemble our society in terms of health care habits. There is no health care consumer culture like there is here nor is there the sense of entitlement. You can’t just postulate that all we’d have to do is put the system in and it would work like it might there.

                  1. We wouldn’t need regulations to combat childhood obesity in this country if we had cultural traditions such as eating healthy foods and public transportation. For whatever reason we’re fed cheap and deadly industrial food and think we all deserve a car that will wipe our ass for us. Nope, no sense of entitlement here. We just think we’re entitled to become oil-guzzling planet-destroying barely mobile blobs of cellulite.

                    1. You think that might have something to do with people being encouraged to think of themselves as helpless victims, instead of, you know, self-reliant individualists?

                      That self-reliance and personal responsibility shit, only right-wing nutjobs buy that crap. We’re all zombies enslaved by advertising. Accept it.

        2. WTF? Dod you ever actually read what anyone else says here Chad? Or do you spend all your time thinking about what you are going to say next?

          I’ve been bitching about problems with the insurance industry for MONTHS.

          Particularly employer provided insurance.

          IMO, many problems would be solved if people actually *paid for their own insurance*. We actually have a bi-layer TPP problem going on.

          Not only to customers not pay for their medical costs directly, they don’t even buy their own insurance.

          Get everyone shopping around in the individual market, and you’d probably see insurance return to it’s traditional function of covering large unexpected expenses.

          1. Hazel, employer-provided insurance solves the adverse selection problem, which libertarians have no solution for whatsoever.

            In Libertopia, how are you going to prevent all the healthy people from going un-insured or very weakly insured, sticking the sick with insane premiums?

            1. The adverse selection problem is solved by (a) people buying their own insurance and (b) insurance being priced individually, according to individual risk.

              1. That IS adverse selection, Hazel!

                Yay! The cancer patients all get to pay $100,000 premiums each year! Errr, wait. What were we insuring against in the first place?

                1. What? You mean AFTER you get cancer, you can’t buy insurance against it?

                  What you care about, Chad, is not “adverse selection”.

                  You want insurance companies to treat people with active present-time malignant tumors as if they retroactively had been paying insurance for the past 10 years.

                  What you want is insurance companies to give people charity.

                  “Adverse selection” is about RISKS. Not 100% certainties.

                  1. I agree with Chad Hazel. Today I crashed my car, and I really don’t have the money for the deductible, so I’m petitioning the government to force the company to lower my deductible retroactively, while of course keeping my coverage and monthly premium at the same level. It’s only fair.

                    1. The other thing is, Chad, if you just said “insurance companies should not be allowed to raise people’s premiums the month after they get cancer”, I’d be 100% with you.

                      But no, you have to go further to the point that insurance companies should be forced to set rates low for people who already have 100% guarenteed chance of having cancer.

                      If everyone was buying in the individual market, insurace would look a lot different. You would buy in early, in your 20s to lock in a low monthly premium, and have a contract stating that they can’t raise them as you get older and sicker, as long as you keep your premiums current.

                      This is the way term life insurance works. You pay the same premium when you are 70 if you bought in early, locked in a low rate and kept making payments, as when you are 20.

                      That’s the deal that makes the system work.

                      But you … you want to fuck up the whole thing by requiring the life insurance company to take the 70 year old at the same rate as a 20 year old, even though the 70 year old has not bought insurance until the last minute.

                      How stupid would you have to be not to realize the effect this would have on the life insurance market?

                      What a lying hypocritical sack of shit would you have to be to want to apply it health insurance, knowing the effect it would have?

                    2. “I agree with Chad Hazel. Today I crashed my car, and I really don’t have the money for the deductible, so I’m petitioning the government to force the company to lower my deductible retroactively, while of course keeping my coverage and monthly premium at the same level. It’s only fair.”

                      Sorry to hear about your crash and all, but how is that fair? Did you sign a contract when you signed up for the insurance that stated the cost of your deductible?

                      If so, wouldn’t it be your responsibility in the interest of your health to make sure you could pay that deductible if necessary?

                      So in that case, wouldn’t you be petitioning the government to force one side of a contractual agreement to have to change the terms in your benefit?

                      Doesn’t sound fair to me. Feel free to correct me if I’m wrong.

                  2. Here in the real world, Hazel, things like the following happen

                    1: You get cancer. You are too sick to work. You lose your insurance.

                    2: You get cancer. You get laid off. You lose your insurance.

                    3: You get cancer. Your wife, whose insurance you were on, divorces you or dies in a car accident. You lose your insurance.

                    4: You get cancer. Your insurance company says you missed a payment or forgot to report a previous case of a hangnail on your application (whether true or not is irrelevant). You lose your insurance.

                    5: You get cancer. Your employer goes belly-up. You lose your insurance.

                    6: You get cancer. Your insurance company goes belly-up. You lose your insurance.

                    I know plenty of people who are one disaster away from being both uninsured and uninsurable. If you don’t, you aren’t paying attention.

                    1. 1: You get cancer. You are too sick to work. You lose your insurance.

                      That’s a problem with the employer-based system, which you think “solves the adverse selection problem”. Remember?


                      2: You get cancer. You get laid off. You lose your insurance.

                      If you already have cancer, they pay for the treatment. If there are any cases of insurance companyes stopping paying for treatment AFTER someone gets cancer, because they can’t keep paying premiums AFTER getting cancer, then that should be outlawed. Breach of contract. You don’t pay for insurance on your car AFTER it’s totaled.

                      3: You get cancer. Your wife, whose insurance you were on, divorces you or dies in a car accident. You lose your insurance.

                      People should be insured individually. You shouldn’t be tagging onto someone else’s insurance. But if premiums paid for both of you, you should be able to continue on the same plan. Breach of contract. Sue.

                      4: You get cancer. Your insurance company says you missed a payment or forgot to report a previous case of a hangnail on your application (whether true or not is irrelevant). You lose your insurance.

                      If the insurance company is right – you lied on your application or you stopped paying premiums, it’s your own fault. Suck it up.


                      5: You get cancer. Your employer goes belly-up. You lose your insurance.

                      I thought you said employer-based insurace was a good thing …

                      6: You get cancer. Your insurance company goes belly-up. You lose your insurance.

                      You are currently making a positive effort to drive the insurance companies bankrupt, hypocrite.

                    2. 4: You get cancer. Your insurance company says you missed a payment or forgot to report a previous case of a hangnail on your application (whether true or not is irrelevant). You lose your insurance.

                      Funny story… In the transition from monthly, hand-written checks to automatic wire transfers I missed a payment by a couple of days on my 5 year, 0% financed line of credit (furniture). This late payment incurred a penalty of $25 and a loss of my promotional interest rate. I freaked out. So, I called them and asked if they could pardon my mistake even though there is no immediate benefit to doing so and it was my mistake. Instead of saying “Sorry, sir, there’s nothing I can do.” and charging me a $25 late fee and 22% interest on payments for the next couple of years, they reversed the late charge, reinstated my promotional rate, and everything was back to normal.

                      Now certainly, every business could do things differently, and certain industries can be more vile than others, but if the insurance companies were more liable to the customer (the person paying premiums) then they would appear to have the same incentives to keeping me happy as Citi did with my late payment above.

            2. Please define Adverse Selection. I don’t believe you understand it correctly.

              The solution to adverse selection is underwriting, the fair pricing of each unit of risk exposure (hint: higher risk individuals would pay an adequate premium for their coverage, otherwise it is charity) and insurance companies being allowed to enforce their contracts (that means tools like rescission should be absolutely acceptable). The free market developed these tools at least a hundred years ago, so I have no idea what you are talking about and neither do you.

              BTW, insurance is a fantastic financial tool that has work for centuries. The problem as Suderman mentions over-insurance. The truth is that the insuring of low-severity, high incidence events and events over which the insured has control defies the basic priciples of what constitutes an insurable risk.
              See here for a list: http://www.answers.com/topic/r…..rable-risk

              1. The solution to adverse selection is underwriting, the fair pricing of each unit of risk exposure (hint: higher risk individuals would pay an adequate premium for their coverage, otherwise it is charity)

                God, you really don’t get it, do you. You really really don’t. Having sick people pay more than healthy people is precisely what insurance is supposed to prevent in the first place!

                What the hell do you think we are insuring against?

                1. Having sick people pay more than healthy people is precisely what insurance is supposed to prevent in the first place!

                  No it is not.
                  You only pay the same if you buy the insurace WHILE YOU ARE HEALTHY and keep your payments up until you get sick.

                  You don’t wait until you get sick, THEN buy insurance, and expect that your premiums will be the same.

                  Your prescription destroys the whole incentive to buy insurance before you get ill. Are you as moron, or just a conniving sack of shit?

                  1. Hazel insurance is a gamble that works by pooling risk. If you buy it and are healthy you end up losing out. But you buy it because something unforeseen but beyond your means to pay for might occur. The people paying for that are those who are losing the gamble by remaining healthy, not that it’s such a bad consolation prize. That’s Chad’s point. Your point is that higher-risk people should pay more to balance the odds. That’s great until the house starts finding loopholes and excuses not to pay you even when you opted in when you were healthy. I don’t know where I’m going with this except that it sure sounds like a non-profit single-payer healthcare seems like the best alternative.

                    1. No, it’s a hedge against an INDIVIDUAL’S long-term risk.

                      You, individually, may be healthy now, but you have some chance X of developing a disease either in the immediate or distant future. These risks can be calculated, and costs can be assigned to them.

                      The insurance company then calculates a long-term expected cost for that individual’s health care, discounted further into the future, breaks it up into monthly payments, and charges them slightly more. That’s how all insurance companies make their money.

                      Pooling risks has nothing to do with the individual’s premiums. It’s a way for the insurance company to reduce it’s own exposure. Any given day, there’s a small chance one of their clients will become ill, and they will have to pay out. By having lots of clients, the insurance company reduces the probability that more claims will come in than the premiums can pay for.

                      That’s great until the house starts finding loopholes and excuses not to pay you even when you opted in when you were healthy.

                      And I’m saying that shit like that wouldn’t happen if individuals shopped for their own insurance. It only happens because the market is dominated by employer-based care, and employers don’t really give a fuck if the insurance company drops you after you get sick.

          2. “WTF? Dod you ever actually read what anyone else says here Chad? Or do you spend all your time thinking about what you are going to say next?”

            Why would he need to when he is always proving us wrong?

    4. Although I’ve replied to this already… High-deductible insurance prevents medical bankruptcy. And doesn’t cost a whole lot. And eliminates the TPP problem for everything under the deductible. Which counts for a lot.

      1. Higher co-pays with an out-of-pocket max probably work better.

        But this has nothing to do with government, because any of these policies could be part of a national health care system.

        1. How about an out of pocket max of $10,000/year?

          Everything underv $10K you pay for yourself. After $10K, givernment-run high-deductible insurance kicks in.

          You’d be happy with that ?

          1. $10k would bankrupt a lot of people, Hazel.

            Please try again.

            1. Oh please. The only people $10K would bankrupt are people living at the poverty line.

              What you want is for nobody to even have to downsize their lifestyle to avoid bankruptcy.

              That guy making $40K/year, you think he shouldn’t have to tighten his belt to $30K. THAT’S your problem.

              1. Given the choice between forcing people to go bankrupt to pay for medical care or having rich people subsidize it, I choose the latter. It’s more moral in every way.

              2. Hazel, there are plenty of people out there making a hell of a lot less than $40k, and living paycheck to paycheck. I know plenty personally.

                God, how far is your head stuck up your butt, that you have no idea what happens in the real world?

                1. Yes, and many of those people carry $10K in credit card debt.
                  So, don’t run up the credit card debt. Save going into debt for a large medical expense.

            2. It would only bankrupt them if the $10k cost occurred soon after the new system went into effect. After a couple of years, I’d expect all of those people to have socked away enough to cover that $10k.

              1. Or, you know, $10K is something that it’s feasible to pay off over a few years on a payment plan. It’s considerably less than the kind of credit card debt many people carry.

          2. Re: Hazel,

            Chad wants free healthcare. He also wants people to “give back” at least 33% of what they “took” from “society.”

            1. He thinks people making $100K per year should have 75% of their income taxed. So they only have $25,000 left.

              Yeah. So many incentives to get a degree and become a professional.

              1. Nahh, the tax rate at $100k needs be no higher than 40% or so.

                1. You mean, like, only a couple percent higher than it is now?

                  So how are we going to get those oodles of cash that’s going to pay down the debt if we’re already bleeding “the rich” at the maximum rate?

                2. I suppose you are referring to Federal taxes only? Otherwise, many of us are already paying more than your theoretical maximum of 40%.

    5. “Yes, health insurance (and any insurance to some degree) creates a third-party-payer problem, which can be and is a major market failure. It is also a necessity.”

      A third-party payer system is no “necessity.” It can, and should, be abolished.

    6. You can consider it a TPP but I still have control. Payments from my insurance company increase my premiums and so I still have an incentive to keep my costs low.

    7. Re: Chad,

      Yes, health insurance (and any insurance [sic] to some degree) creates a third-party-payer problem,

      Idiot.

      […]which can be and is a major market failure.

      Non sequitur. What does the third-party payer problem have to do with so-called “market failure”? So far the toys that my kids receive are third-party paid (me), and yet the toy stores are fully stocked.

      It is also a necessity. Get back to me when you are ready to admit this.

      It’s not a necessity. See you in 100 years.

      In general, conservative plans to “fix” the TPP problems of health insurance are nothing more than plans to weaken the insurance.

      Go to a conservative blog and bitch about it there. Conservatives are just as clueless about economics as Statists.

      1. My God…

        “Non sequitur. What does the third-party payer problem have to do with so-called “market failure”

        *facepalm* *facepalm* *facepalm*

        OM, TPP is one of the most classic, textbook examples of a market failure out there. You dropped out of Econ 101 after one week because the algebra was hard, didn’t you?

        1. Re: Chad,

          OM, TPP is one of the most classic, textbook examples of a market failure out there.

          Name names, please – which textbook?

          You dropped out of Econ 101 after one week because the algebra was hard, didn’t you?

          The algebra? What the hell are you talking about?

          1. Leave it to OM to learn “economics” from a book that didn’t even contain any equations.

            1. Re: Chad,

              Leave it to OM to learn “economics” from a book that didn’t even contain any equations.

              Did you learn economics from a book containing equations?

              You didn’t even answer the question – which textbook?

              1. OM–this is the central criticism of libertarian/Austrian/voodoo economics. It doesn’t contain any numbers, just articles of faith. Libertarians with respect to economics have a hard time joining the 20th century, let alone the 21st.

                1. Re: Tony,

                  It doesn’t contain any numbers, just articles of faith.

                  Yeah . . . “People act” one has to take that one as a matter of faith… Never mind the perfunctory contradictions from denying it, but then again, Statists are NOT known for their logical consistency.

                  1. No one denies that people act, most people just deny that people acting in a natural state is a sufficient sole constituent of a civilization, or that people can act to form artificial governing structures.

                    1. Re: Tony,

                      No one denies that people act, most people just deny that people acting in a natural state is a sufficient sole constituent of a civilization[…]

                      You mean there’s something besides a natural state?

                      or that people can act to form artificial governing structures.

                      But wouldn’t people act to form an artificial governing structure in a natural state? If yes, then you just said that is not enough to be civilized. So what does it take, Tony, besides being in this Universe (which is natural, I might add)?

              2. Hmmm, the only economic textbook I have handy is Greer’s Business, Government, and Society. That’s from the 300-level class I took. I don’t see my textbooks from honors micro and macro. I’ve got over a thousand books on my shelves, stuff gets lost.

                I can assure you, my textbooks had both algebra, calculus, etc.

                1. Re: Chad,

                  I can assure you, my textbooks had both algebra, calculus, etc.

                  I read Samuelson’s, Reisman’s, Mises’, Bohm-Bawerk’s, Menger’s . . . even tried Marx’s (and quit).

                  If you were lead to believe that algebra and calculus would lead you to learn economics, you were the bigger fool, because they have your money and you do not.

            2. As opposed to the one you learned from, which evidently contained semen-stained pictures of John Maynard Keynes.

              1. Re: Ballchinian,

                Chad is the product of “do as I say” method of schooling. He along with his peers learned everything through memorization and repetition. It is NO wonder he believes one can learn economic concepts by solving equations.

                Keynes was irony incarnate: He was a mathematician who wrote a terrible economics treatise.

        2. Health insurance is one of the most classic examples of the absolute failure of government screwing around with a market, Chad, not a failure of a market. Government is responsible for the development of the modern insurance market, because it froze wages. Government drives up costs by saddling the industry with massive amounts of paperwork and mandates as to what insurance must cover. I sure as hell am glad as a man that my plan covers my prenatal care. Oh, and don’t forget the enormous costs of trying to figure out what poorly written and imbecilic legislation like HIPPA and Obamacare actually mean, then complying with the requirements. Health care is the most highly regulated and laden with government lackey industry this side of banking. A market must be at least somewhat free in order to be called a free market failure, don’t you think?

  7. I’ve been making this point for some months now.

    Since the employer is actually the one doing the shopping, insurance companies are going to craft insurance plans that meet the employers needs. Not the employees.

    That likely is what is behind the rise of insurance companies increased efforts to refuse payment for any flimsy excuse.

    If individuals bought their insurance directly, companies that did this, nobody would buy from. But the employer is the one making the decision, and the employer’s concerned is largely cost only. Any way the insurance company can get costs down is hence in the insurance company’s interests, even if it impacts patient care. The patient isn’t the costumer, and the quality of his care rarely impacts the insurance company’s profit margin.

    1. Yes, Hazel. Just read all the wonderful stories out there about how well people are treated in the individual insurance market.

      Honestly, how can you be so stupid sometimes?

      1. Because argument from anecdote is just the best kind of argument, gosh darn it.

        1. How many anecdotes does it take before you have data? There are thousands upon thousands of instances of people losing their individual plans after they get sick.

          This generally doesn’t happen with employer-based insurance.

          1. Then quote the data, rather than refering generally to anecdotes. I do get your point: individual paln companies do sometimes behave badly, and people suffer because of it.

            However, if you removed the barriers imposed on the individual market, and equalised the tax benefits accorded employer health plans and individual plans, you’d end up with a market that punished said misbehaviour far more, while rewarding good service.

            That the employer link is horrendous is agreed by every health economist from Ezra Klein to Cato.

            1. Oh, the employer system is horrible, but it still is better than the individual market. My guess is that you have never dealt with it. By which I mean, of course, that you paid for it AND got severely ill or injured.

              1. See, you’re problem is that you don’t think insurance should be insurance.

                You think that insurance should just be “something that pays for everyone’s medical care”.

                You have no appreciation of the idea that insurance is a hedge against risk, not a big bag of money to pay for shit.

            2. There are roughly 13 million people who have been denied insurance because of a “pre-existing condition”

              Is that what you mean?

              http://www.ehow.com/about_6825…..stics.html

              Thanks to Obamacare, these people need not wait until they are 65 to get insurance. No thanks you you guys.

              1. Denied insurance != denied medical treatment. And fewer people would be denied insurance if the states allowed insurers to price risk properly.

                What you want is for nobody to ever be denied medical treatment for anything, and have someone else pay for it.

                You don’t get it. The government will have to deny people medical treatment based on cost too.

          2. We are awaiting your data, o wise one.

          3. there afre thousands upon thousands of exmaples aournd the world of when government run plans deny people healthcare

      2. FFS Chad, no one gives a shat about the plethora of anecdotes.

        In a liberalized insurance market where individuals carry their insurance regardless of employer, the biggest issue is finding care for those with genetic medical conditions or the poor who never bought insurance when they were healthy. Those two problems can (and already are) solved by state run risk pools.

        1. Ohhh, GOVERNMENT is the solution.

          How quaint!

          1. Blow me. Read Arnold Kling. Plently of libertarian thinkers understand that there are outliers that the existing social morals are not going to let simply Darwinize away and thus some level of Government care will always come into play.

            1. not to mention a liberalized healtcare market with a means tested subsidy for these kinds of things would be a far less costly, far less distrotive system then the cluster fuck we currently have. Its the less intervention option.

      3. Yeah, like the horror of not being allowed to buy insurance after you’re already sick.

        1. And nobody lets me buy a house after I’ve declared bankruptcy. Those fuckety fucks!

      4. And you think this is unique to the market?
        I’m in the military and we have plenty of anecdotal evidence of servicemembers being written off as too sick to serve but not sick enough for treatment or benefits.

        I’ve got a friend who’s been told that he can’t get a knee replacement because a he’s young enough that a second replacement surgery would be needed to last out his expected lifetime.

        This is from a military system that is already set up exactly like the new health care reform buffs want. Not only do none of us have to think about the cost/benefits of our care, we’re not allowed to, all the important decisions are made for us – with the benefit of the *service* in mind.

  8. Who exactly is Chad arguing with here?

    The libertarian in his head?

    Again?

    1. The original post blames the TPP problem on “centralizers”, when in fact it is simply inherent in any form of insurance, regardless of who pays for it or manages it.

      1. Stop posting.

      2. The original post blames the TPP problem on “centralizers”, when in fact it is simply inherent in any form of insurance, regardless of who pays for it or manages it.

        Idiot.

        Insurance is NOT a TPP system. The thing that exists right now for healtcare services has NOTHING to do with insurance.

        And TPP is NOT inherent in ALL forms of insurance. Where do you get that idea is beyond me. My auto insurance does not pay for my gasoline, for instance, nor does my life insurance pay for prolonging my life.

        Idiot.

    2. Yes.

    3. Pretty much. It’s how he wins all the threads.

      1. What is it with lefties and their desire to win threads? I don’t even know what that means.

        1. Many threads = Rope = Enough to hang themselves.

        2. It’s a pathetic attempt to get the voices in their heads to stop.

      2. Wait, don’t tell me.

        Chad looms large?

        1. Suddenly hanging Chads don’t seem so bad…

  9. Chad,

    If you have a hard-on for Singaporean Health Care, write to your pals at the DNC and all of the idiot politicians who voted for Obamacare and tell them what complete imbeciles they are, since Obamacare (and the rest of the mish-mash of health insurance regulations in this country) looks nothing like Singapore or Japan.

    1. No, I don’t have a “hard-on” for them, but they work well enough and incorporate many libertarian ideas.

      Certainly they are better than the mess we have here. Japan spends half of what we do, despite having two-thirds more elderly per capita.

      1. Not debating anything here, knowing nothing about Japan’s healthcare, but I wonder if a statistic like that is comparable? After all, Japan has a pretty hefty cultural bias towards family taking care of elderly members. Wouldn’t that mean that a chunk of the costs are borne directly by families?

        1. Yes, families stay together often in Japan, though this impacts their version of Social Security more than it affects their Medicare variant.

          They hold costs down by paying doctors reasonable wages and using centralized price controls, as well as hefty co-pays (usually 30%), which are sufficient to keep people from over-spending.

          1. Re: Chad,

            They hold costs down by paying doctors reasonable wages and using centralized price controls,

            And, we are supposed to imagine, Japanese doctors would NEVER EVER EVER dream of migrating away from such paradise…

            http://www.findingdulcinea.com…..eaths.html

            as well as hefty co-pays (usually 30%), which are sufficient to keep people from over-spending.

            I don’t understand – I thought you considered co-pays icky.

      2. “two-thirds more elderly per capita”

        I thought it was because of the declining birthrate…

        1. Because of the low birth rate and their exceptional longevity, Japan is 20% over-65, while the US is 12%. Japan spends 9% of GDP on health care, vs our 16-17%.

          They also have more fancy gadgets (MRIs, CAT scanners, etc) per capita than we do, and beat us on pretty much any measure of health you can come up with.

          It really is hard to come up with ANY way in which we surpass them.

          1. Re: Chad,

            Japan spends 9% of GDP on health care, vs our 16-17%.

            Japan is a person?

            1. OM, do you disbelieve in poodles too? Are they merely collections of oppressed atoms?

              1. Re: Tony,

                OM, do you disbelieve in poodles too? Are they merely collections of oppressed atoms?

                You mean people are like atoms, and countries are like poodles?

                Idiot.

  10. Just remember these six words. They were a more than adequate answer to a 4 paragraph screed from a socialism apologist listing all the “wonderful things” that the Democrats have done for the little guy:

    PAID FOR BY WHOM?
    BLANK OUT…

  11. People need to be able to pay for their routine and common health care expenses out of pocket. It is only through that market-based approach that costs will go to minimum and quality and availability will go to maximum (provided the government doesn’t also stifle competition or innovation). Putting anybody in the middle seems inevitably likely, and has been routinely seen in practice, to increase cost and misery (except, perhaps, for those in the middle).

  12. ### Wherever there is third-party payment, the goal of innovation is to produce more products that qualify for reimbursement, even if the effects on patient outcomes are only marginal.

    It’s actually much worse than that. I worked for a company that made medical diagnostic equipment for automated cancer screening.

    Of course you are right, that it was all about reimbursement. But the reimbursement rates for manual, less effective screening, were higher than for automated, more effective screening, so labs would lose money by using the more effective screening technique.

    If the labs used the machine, they would be establishing two “standards of care”, inviting lawsuits and regulatory backlash.

    Further, if we changed a line of algorithmic code, we were required to submit a full FDA trial, while we could fiddle with calibration parameters to our hearts content – and did, because they directly affected performance characteristics.

    In short, medical regulation is more ass backwards than you could imagine, and works against improved patient outcomes as often as it works in favor of them.

    1. I worked in medical informatics for ten years, the last two or three of them for a company that made diagnostic hardware to go along with the software and was thoroughly under the SEC’s thumb from a business perspective, and the FDA’s from a design, manufacturing, operations and documentation perspective. I can corroborate everything you say. The experience was surrealistic, and not in a good way.

  13. How much has corporate cronyism worsened the system? Or, is it all a plot concocted by EVUL LIBRULZ scheming over arugua an a Greenwich Village coffeeshop?

    1. of course not. It’s a plot by EVUL CORPORATSHUNZ scheming over their monocles in a Wall Street boardroom.

  14. Once again we have the Chad and Tony show. Without them, this thread would shrink to probably less than 20 posts.

    Chad and Tony are so boring. I can guess what they’re going to say before paging down the screen. I’m usually right.

    If only the Chad and Tony Show was a casino game in Vegas. I’d be rich.

  15. This is for dessert, for all of you:

    Re: Tony,

    No one denies that people act, most people just deny that people acting in a natural state is a sufficient sole constituent of a civilization[…]

    You mean there’s something besides a natural state?

    or that people can act to form artificial governing structures.

    But wouldn’t people act to form an artificial governing structure in a natural state? If yes, then you just said that is not enough to be civilized. So what does it take, Tony, besides being in this Universe (which is natural, I might add)?

  16. Yes, there is a debate. I think the consensus is that we need reform, but not an overhaul of the entire system.

  17. There is a debate. But the question is whether we needed a complete overhaul instead of slow but effective changes.

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