Socialist Health Care: Does it Work?

[drankin]

Why should people pay for the health care of others? That's what it comes down to. I pay a lot for health insurance for my family. I absolutely do not want to (hell, I can't if I did want to) pay even more for everyone elses families. If I want to see a doctor, I don't want to wait in line for 3mo. I have no problem "firing" a doctor because he left me in a waiting room for too long. I've done it a few times. I pay for a service, I'm a customer, I'll go where a customer is treated right. If the government is paying for my health, I'm going to get crappy/minimal care, miles of paper work, and feel like I'm in the freakin DMV every time my family or myself is need of care. Hell no. The government can stay out of my health plan.

 

[gravenewworld]

Why should people pay for the health care of others? That's what it comes down to. I pay a lot for health insurance for my family. I absolutely do not want to (hell, I can't if I did want to) pay even more for everyone elses families. If I want to see a doctor, I don't want to wait in line for 3mo. I have no problem "firing" a doctor because he left me in a waiting room for too long. I've done it a few times. I pay for a service, I'm a customer, I'll go where a customer is treated right. If the government is paying for my health, I'm going to get crappy/minimal care, miles of paper work, and feel like I'm in the freakin DMV every time my family or myself is need of care. Hell no. The government can stay out of my health plan.

You don't think you are paying for the health care of others already? Why do you think medical bills are so expensive? Because insurance companies try to play every game possible with physicians in order to not have to pay them. Insurance companies make filing claims for procedures done by physicians extremely complicated and then have special people who look through the claims to find minute mistakes in the claim. If there are any mistakes the insurance company will reject them. Sometimes physicians don't get paid by insurance companies for over 10 months to a year for services rendered because of all the BS they have to go through with insurance companies. The end results are higher prices for everyone.

When the uninsured have to go to the ER but then have to file bankruptcy because they received treatment to save their lives but can't afford to pay, who do you think the hospital spreads the cost onto? YOU.

 

[drankin]

Well then. Seems to be working just fine the way it is. Don't make a hard working person pay more because someone else won't! If you are uninsured, get insured. This is the land of opportunity, not the land of government hand outs.

Don't give me the bankruptcy sob story. Bankruptcy isn't the end of your life for crying out loud! If that's what it took for me to pay for services that saved my life then so be it! At least you can in this country. In some countries you can't get out of debt so easy. Make it sound like a damn horror story.

 

[mjsd]

Well then. Seems to be working just fine the way it is. Don't make a hard working person pay more because someone else won't! If you are uninsured, get insured. This is the land of opportunity, not the land of government hand outs.

Don't give me the bankruptcy sob story. Bankruptcy isn't the end of your life for crying out loud! If that's what it took for me to pay for services that saved my life then so be it! At least you can in this country. In some countries you can't get out of debt so easy. Make it sound like a damn horror story.

you are doing OK, because you are one of the "better off" ppl... for some they don't have a choice even if they work hard. the system is slightly skewed towards the rich and powerful and so government hand-outs can also be seen as a way to balance that a bit...

 

[drankin]

you are doing OK, because you are one of the "better off" ppl... for some they don't have a choice even if they work hard. the system is slightly skewed towards the rich and powerful and so government hand-outs can also be seen as a way to balance that a bit...

You want to know where I come from?? I grew up dirt poor, broken home, about as dysfunctional a life one could have, lived on the streets and homeless shelters as a young adult and one day decided to take care of myself. Noone owes me a damn thing because of my situation. It's all me, I own it. I learned how to work, something I was never actually taught never having a father around, put myself thru school when I figured out flipping burgers, moving furniture, and whatever else I subjected myself too wasn't making the best use of my time. And damn it, I'm not well off, but I'm solid middle class now and I live in a country where anyone can do what I did if they get off there butt and quit whining about how aweful their situation is.

Tell me, what do you do when some homeless guy comes up to you asks you for money on the street?

 

[t-money]

About 50 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens. People do not have the money for insurance. Naturally, the US could get a lot of better health care for the privileged if they just ignored care of those 50 million.

Did you watch the video entitled "Uninsured in America" I put above? That statistic is so misleading. Something like 30% of those people make over $50,000 a year, and another 10% make over $75,000 a year. Another large percentage are people of the ages 18 - 30 who spend 3 times as much on entertainment (eating out, movies, alcohol, etc.) than health care, because health care is not a good buy for them. Another significant percentage is illegal aliens, and another significant percentage are people who qualify for health care through there employer or through the government, but they don't feel out the paper work.

The "50 million uninsured in America" is a misleading statistic, that is used by politicians to overstate the problem. Many researchers have assessed the real number at about 10 million. Oh and by the way, the stats they are analyzing are government statistics.

 

[gravenewworld]

Well then. Seems to be working just fine the way it is. Don't make a hard working person pay more because someone else won't! If you are uninsured, get insured. This is the land of opportunity, not the land of government hand outs.
.

LOL, I wish it were that simple. Ever heard of the phrase "pre-existing condition"? Apparently not. Even if someone with a "pre-existing condition" wanted health care through a job, they would be hard pressed to get it.


Since you seem to rely on anecdotal evidence I will give you some of my own:

Before my boss worked at our place he was at a place where they brought in a candidate who was well qualified for a position and they wanted to hire him. However, during the routine pre-employment health screening that was required by the insurance company that the placed used, the doctor found that the guy had cancer. As a result, the insurance company refused to insure him because he had a "pre-existing condition". The company's policy was that it was mandatory for all employees to be insured under the company's health insurance, thus as a result, the guy didn't get the job because he couldn't get insurance because of his "pre-existing" condition. Image getting the double whammy of finding out that you have cancer and then getting rejected for a job that you were qualified for.

 

[wildman]

Actually the US has socialized medicine. Insane socialized medicine. If you turn up at an emergency room, the hospital has to serve you regardless of the ability to pay. It is insane because this system does not pay for preventive care but it does pay for gold plated emergency care when things get out of hand.

Maybe someone can confirm this, but I heard the US pays as much per capita for Government subsidized medicine as Canada does while covering only a fraction of the population. Is this true? If so, then our system truly is insane.

 

[wildman]

My wife's sister in law is a doctor who practices in the EU. She recently spent a year in New York and she agrees that the medical system in the US is (to put it in her words): loco, crazy, insane.

 

[drankin]

Yep, lifes tough. My good friend has had brain cancer several times, scars on his head, his teeth are ruined from chemo, but you know what? He has changed jobs several times and does just fine. Luckily his cancer is in submission but he has been close to dying many times. It sucks that your boss couldn't get that job. Bummer. Get another one.

You should really learn to play the violin.

 

[t-money]

Let me be clear I am neither a Republican or Dem, what I am for is a free market system. Universal health care is the anti-market, why is this bad. The concept of universal health care limits peoples choices, it creates a lack of incentive for people to do work. DO you think you get your steak because of the benevolence of the cattle rancher or the butcher. I don't think so, same reason why individuals don't work for free you need to paid. Besides if you make Health care Universal, and don't attribute a cost to every visit to the doctor, what do you think the end result would be? Well I can tell you a lot of people will start going in for paper cuts just they can.

 

[gravenewworld]

Let me be clear I am neither a Republican or Dem, what I am for is a free market system. Universal health care is the anti-market, why is this bad. The concept of universal health care limits peoples choices, it creates a lack of incentive for people to do work. DO you think you get your steak because of the benevolence of the cattle rancher or the butcher. I don't think so, same reason why individuals don't work for free you need to paid. Besides if you make Health care Universal, and don't attribute a cost to every visit to the doctor, what do you think the end result would be? Well I can tell you a lot of people will start going in for paper cuts just they can.

and since when are oligopolies a free market system? a few huge insurance firms controlling the majority of how this nation's health care is run doesn't really foster a free market system either. demand for health care is also likely to be very inelastic and therefore not really subject to a lot of market forces that change price. you can charge someone $10 for a MRI or $1000, they are still going to need it. demand for a lot of types of health services would most likely remain constant no matter what the price is due to the inelasticity of demand for health care. So you think people would run to the ER if they had a paper cut if there was universal health? Do you think people would over consume gas excessively if the price of gas were suddenly $.50? Most likely not, since after a certain point, the law of diminishing marginal utility takes over. Also, I don't think you have really thought out the social consequences of free market system for something like health care. Health care isn't like the market for clothing, CDs, coffee, etc. you are dealing with lives. Even if health care were run at equilibrium in a perfectly free market system there would be people left who would have no access to health care since they would lie below the equilibrium. So are you saying that you would find it perfectly socially acceptable that millions of people in your country might not have access to health care, even if the health care market was run freely, due to the fact that they might not be included within the equilibrium? Pareto optimal efficiency in a market doesn't require or imply an equitable distribution of wealth (in this case health care) at all.

 

[t-money]

and since when are oligopolies a free market system? a few huge insurance firms controlling the majority of how this nation's health care is run doesn't really foster a free market system either. demand for health care is also likely to be very inelastic and therefore not really subject to a lot of market forces that change price. you can charge someone $10 for a MRI or $1000, they are still going to need it. demand for a lot of types of health services would most likely remain constant no matter what the price is due to the inelasticity of demand for health care. So you think people would run to the ER if they had a paper cut if there was universal health? Do you think people would over consume gas excessively if the price of gas were suddenly $.50? Most likely not, since after a certain point, the law of diminishing marginal utility takes over. Also, I don't think you have really thought out the social consequences of free market system for something like health care. Health care isn't like the market for clothing, CDs, coffee, etc. you are dealing with lives. Even if health care were run at equilibrium in a perfectly free market system there would be people left who would have no access to health care since they would lie below the equilibrium. So are you saying that you would find it perfectly socially acceptable that millions of people in your country might not have access to health care, even if the health care market was run freely, due to the fact that they might not be included within the equilibrium? Pareto optimal efficiency in a market doesn't require or imply an equitable distribution of wealth (in this case health care) at all.

First off, if it's true that a few firms are controlling all of the nations health care, then this should offer a great profit incentive for additional firms to enter the market, and try to bid away their customers by decreasing prices. I agree that the way our nations health care is run does not foster the free-market, but that's only because government is already too involved, and increasing their role will probably not be very beneficial.

Sounds like you know a little bit about economics. If this is the case then you should know there is no such thing as a completely inelastic demand curve. Furthermore, if MRIs are really needed this bad then explain to me why they only charge $1000? Why not $2000? Why not $10,000? Why even stop there? If people are really "overcharging" others for MRIs, then why don't some people cut the cost a little bit and steal all the customers? In fact, you could probably make a killing by going in the business, if we are really as far off of equilibrium as you are claiming.

Yes, people would over consume gas if the price was 50 cents. You should know about that actually happening in the US during the 1980s. The government put a price ceiling on gasoline, and there were rediculously long waiting lines. Many people didn't even get gas after waiting in line for hours, because by the time they got to the front of the line it was gone. Prices play a very important role, and if you don't ration goods and services with prices, then you'll be forced to do it some other way (like in the gasoline example above, or the waiting lines for doctors or dentists in Canada and Britain). Furthermore, this gives both suppliers and consumers proper incentives (like carpooling, or searching for additional oil reserves). The law of diminishing marginal utilities is not all to be considered in this example, considering that decreases in gas prices will cause people to alter other decisions which revolve around the price of gas. For example, why not get a house a little farther from work if gas is cheaper, or why carpool, or why ride you bike, or why ride metro, or buy a fuel efficient car (or make a fuel efficient car for that matter)? I'm not saying everyone will make these decisions, but a significant enough amount will in order to make a big difference in the aggregate. In fact, the laws that make it so that cars must get more miles to the gallon, have actually not decreased the amount of gas that people consume. Essentially these laws just make gas cheaper, and this has been a very heavily researched topic in the econometrics literature.

Well you say health care is different because it is so important. Well why not get the government involved in food too, because that is even more important than health care? A market could never be expected to handle something as important to daily life as food. In my opinion, it is the exact opposite. The more important something is, the more you want the market handling it. By the way, some of the issues/problems with current "markets" are not market failures at all. In fact, many people argue that the current health care problems in the US arose because of government involvement in the first place. I am just trying to point out that what is sometimes referred to as "market failures" is sometimes no such thing. For example, I imagine that if there are some oligopolies in the health care industry, it probably comes from government involvement. This has been studying before in regards to the FDA, AMA, etc.

I am a little confused about the pareto optimality argument here? Isn't pareto optimality the idea that you could make someone better off without making someone else worse off. Markets do not always lead to these solutions. However, who should decide the correct amount of wealth distribution? Furthermore, even trying to redistribute wealth always has unintended consequences, which can often lead to even worse problems than the original one you are trying to solve. For example, lowering the wages of doctors may allow them to leave the country as well as lead to fewer med school students in the future. I am not trying to say that the market is perfect, because it sure isn't. People generally like to compare the failures of the market to their utopia ideas of government. In actuality, it seems to me that when you compare the way in which markets actually work and governments actually work, you'll find that markets work pretty well. Do you really want DMV or Post Office quality in something as important as health care?

 

[Azael]

Do you honestly believe that? 1 million+ children in this country do not receive all of the recommended vaccinations by physicians solely because of insurance reasons/affordability issues. This was even after they were referred to public clinics! Children who don't receive all of their vaccinations are not only a threat to themselves, but to the public in general. Yes, that's right, Insurance BS puts the general public health at risk in some cases.

Well the poorest one million children is not representative of the avarage american.

No doubt the poor swedes get better healthcare than the poor americans. But the avarage american probably has better healthcare than the avarage swede. Not to mention the avarage american is richer than the avarage swede.

Really? I know it could be like that some years ago, but thought it had shaped up a bit since then.

Depends on what municipality you live in. Some have very long waiting lines, some have a lot shorter. A old buddy of mine had to wait 14 months for a hernia surgery.

 

[Moridin]

Why should people pay for the health care of others? That's what it comes down to. I pay a lot for health insurance for my family. I absolutely do not want to (hell, I can't if I did want to) pay even more for everyone elses families. If I want to see a doctor, I don't want to wait in line for 3mo. I have no problem "firing" a doctor because he left me in a waiting room for too long. I've done it a few times. I pay for a service, I'm a customer, I'll go where a customer is treated right. If the government is paying for my health, I'm going to get crappy/minimal care, miles of paper work, and feel like I'm in the freakin DMV every time my family or myself is need of care. Hell no. The government can stay out of my health plan.

You do understand that your health depends on the health of the people around you, yes?

 

[drankin]

You do understand that your health depends on the health of the people around you, yes?

Not entirely, that wouldn't make much sense. Explain your point, I'm getting bored.

 

[Moridin]

Not entirely, that wouldn't make much sense. Explain your point, I'm getting bored.

From a global perspective, it is easy to see. Your health depends on the health of people in the city of Guangzhou in the Guangdong provice in China. This is basically where we get and will probably get all seasonal and pandemic avian influenza during the 20th and 21th centuries. Or on the tuberculosis epidemic spreading among the uninsured poor people in New York or LA. Or the Ebola epidemics in Zaire or Sudan in Africa. The health of the world, the continent or a country rises or falls with the health of those that are underprivileged, as they are the biggest vectors for infection.

Disease does not recognize social classes or lines of poverty. It is not about taking care of the poor, but about making sure to award the microbial threat few opportunities to spread.

 

[EL]

It is not about taking care of the poor

It is not only about taking care of the poor, I would add. Now we have two good reasons.

 

[Moridin]

It is not only about taking care of the poor, I would add. Now we have two good reasons.

True, although people generally have a hard time seeing the benefits of something if part of the benefit does not fall directly on themselves.

 

[Moridin]

Universal health care is the anti-market, why is this bad. The concept of universal health care limits peoples choices, it creates a lack of incentive for people to do work. DO you think you get your steak because of the benevolence of the cattle rancher or the butcher. I don't think so, same reason why individuals don't work for free you need to paid. Besides if you make Health care Universal, and don't attribute a cost to every visit to the doctor, what do you think the end result would be? Well I can tell you a lot of people will start going in for paper cuts just they can.

The thing is that a free market works excellent for goods and general services because if people selling the goods / service do a poor job or sell a bad product they will be out of customers after a while. That model works great. Unfortunately, this game cannot be afforded to play with human life as it can with bread and butter. It is the same reason why the US do not allow for anyone to sell prescription drugs (I hope?) because those who came into contact with a bad provider doesn't just get a bad product or service, they risk their health or worse. After time, people with a high income get the best health care as the capital is centralized. This is where social justice comes in.

I doubt the factualness of your claim for paper cuts or abuse of public health. If there is an informed public with perfect information (the job of public health) no abuse need to occur of that sort.

I do not think that create a lack of incentive for people to do work when it comes to public health (together with education, this is the only exception) because a good public health would be funded by the government and through the media, public opinion and independent scientists any discrepancies can be investigated.

 

[gravenewworld]

First off, if it's true that a few firms are controlling all of the nations health care, then this should offer a great profit incentive for additional firms to enter the market, and try to bid away their customers by decreasing prices. I agree that the way our nations health care is run does not foster the free-market, but that's only because government is already too involved, and increasing their role will probably not be very beneficial.

No. One of the reasons monopolies/oligopolies exist is because of high costs to entry into the market for a firm. There are natural barriers to entry in some markets (like astronomically high costs of getting started) that limit the amount of firms that can enter the market. Economists define an oligopolist market by the 4 firm ratio--the amount of the market that the largest 4 firms in the industry have a share of. If it is above 40% of the market then the market is considered oligopolist. Examine the market for health care. According to the GAO (govt accountability office)

-Blue Cross and Blue shield had over 50% of the market in 9 states (THAT IS JUST 1 FIRM!)

-In almost every state, the largest insurer in that state had an average of 43% of the market (again only 1 firm!)

You preach freedom of choice and free markets for health care, but in reality WE ALREADY DON'T HAVE A FREE MARKET FOR HEALTH CARE! The insurance industry sure as hell is an oligopolist market! In almost every state 1 firm owns 40+% of the health insurance market! That completely blows out the 4-firm ratio litmus test that economists use to determine whether or not a market is run by an oligopoly.

http://www.nytimes.com/2006/04/30/us/30insure.html?_r=1&oref=slogin

Federal investigators have found that a handful of companies account for a growing share of the health insurance policies sold to small businesses in most states, leaving consumers with fewer options and higher costs.

Sounds like you know a little bit about economics. If this is the case then you should know there is no such thing as a completely inelastic demand curve. Furthermore, if MRIs are really needed this bad then explain to me why they only charge $1000? Why not $2000? Why not $10,000? Why even stop there? If people are really "overcharging" others for MRIs, then why don't some people cut the cost a little bit and steal all the customers? In fact, you could probably make a killing by going in the business, if we are really as far off of equilibrium as you are claiming.

You've answered your own question. Of course a perfectly inelastic demand doesn't exist. Even health care demand is not perfectly inelastic, however it is pretty damn inelastic. Once you go beyond a certain point for charging for a MRI, no one will demand it.

Yes, people would over consume gas if the price was 50 cents. You should know about that actually happening in the US during the 1980s. The government put a price ceiling on gasoline, and there were rediculously long waiting lines. Many people didn't even get gas after waiting in line for hours, because by the time they got to the front of the line it was gone. Prices play a very important role, and if you don't ration goods and services with prices, then you'll be forced to do it some other way (like in the gasoline example above, or the waiting lines for doctors or dentists in Canada and Britain). Furthermore, this gives both suppliers and consumers proper incentives (like carpooling, or searching for additional oil reserves). The law of diminishing marginal utilities is not all to be considered in this example, considering that decreases in gas prices will cause people to alter other decisions which revolve around the price of gas. For example, why not get a house a little farther from work if gas is cheaper, or why carpool, or why ride you bike, or why ride metro, or buy a fuel efficient car (or make a fuel efficient car for that matter)? I'm not saying everyone will make these decisions, but a significant enough amount will in order to make a big difference in the aggregate. In fact, the laws that make it so that cars must get more miles to the gallon, have actually not decreased the amount of gas that people consume. Essentially these laws just make gas cheaper, and this has been a very heavily researched topic in the econometrics literature.

So you claim the law of diminishing utility is not all to be considered here, but then go on to talk about consumer demand behaviors? That doesn't make sense, seeing as demand is defined by marginal utility! This website actually explains how demand is derived through marginal utility pretty well:

http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=marginal+utility+and+demand

Well you say health care is different because it is so important. Well why not get the government involved in food too, because that is even more important than health care? A market could never be expected to handle something as important to daily life as food. In my opinion, it is the exact opposite. The more important something is, the more you want the market handling it. By the way, some of the issues/problems with current "markets" are not market failures at all. In fact, many people argue that the current health care problems in the US arose because of government involvement in the first place. I am just trying to point out that what is sometimes referred to as "market failures" is sometimes no such thing. For example, I imagine that if there are some oligopolies in the health care industry, it probably comes from government involvement. This has been studying before in regards to the FDA, AMA, etc.

You are comparing apples to oranges. The food market is not an oligopolist market! In fact, many times in basic econ the food market is used as an example of a type of market that is almost perfect competition! So according to you " the most important things" should be handled by the free market? Okay so how about national defense? Would you want private companies in charge of all of our nuclear weapons, tanks, and stealth bombers? The problem with health care in America is the fact that it is run by an oligopoly. Oligopolies and monopolies ALWAYS lead to inefficiencies, i.e. market faliures.

I am a little confused about the pareto optimality argument here? Isn't pareto optimality the idea that you could make someone better off without making someone else worse off. Markets do not always lead to these solutions. However, who should decide the correct amount of wealth distribution? Furthermore, even trying to redistribute wealth always has unintended consequences, which can often lead to even worse problems than the original one you are trying to solve. For example, lowering the wages of doctors may allow them to leave the country as well as lead to fewer med school students in the future. I am not trying to say that the market is perfect, because it sure isn't. People generally like to compare the failures of the market to their utopia ideas of government. In actuality, it seems to me that when you compare the way in which markets actually work and governments actually work, you'll find that markets work pretty well. Do you really want DMV or Post Office quality in something as important as health care?

What is there to be confused about? You are the competitive market guy for health care. A competitive market tends toward equilibrium, this is one of the fundamental laws of economics. But a competitive equilibrium leads to Pareto Optimal efficiency. This however, does not imply at all that the most efficient allocations of resources are the most equitable. You still haven't answered my question. With a free market system for health care is it socially acceptable that thousands and even millions of people may be left without proper access to health care or insurance? A free market type of system for health care inherently leads to some people who will be shut out from health care even when resources are allocated most efficiently (i.e. equilibrium). So once again is this acceptable to you? If you still find this acceptable then tell me this, would you want someone who falls between the cracks in a competitive health care market and is uninsured running around with one of these diseases (see below) and avoiding hospitals and doctors because they had no insurance or couldn't afford it?

http://www.cdc.gov/ncidod/dhqp/ar_mrsa.html
http://www.cdc.gov/hiv/
http://www.lungusa.org/site/pp.asp?c=dvLUK9O0E&b=35815
http://www.cdc.gov/NCIDOD/SARS/

The uninsured put the general public (insured and uninsured) at huge risk. All its takes is one uninsured person going around with a multi resistant strain of TB to spread it to 100's of people because they didn't have access to a doctor or couldn't afford to seek medical care. But this is the risk you run with a free market system of health care.

 

[gravenewworld]

Well the poorest one million children is not representative of the avarage american.

I guess you didn't bother reading the JAMA article I posted. Read it again before you make any conclusions. The 1 million+ children in the US who are unvaccinated against all recommended diseases aren't solely the poorest ones. Children who are not being vaccinated are ones that have health care but have plans that don't cover the costs of vaccinations! Hence they are labeled as being "underinsured". You don't have to be poor at all to be underinsured. The problem with health care in America isn't just solely the uninsured. Even for people with insurance, many times they have restricted access to health care or receive extremely poor care.

 

[turbo]

I guess you didn't bother reading the JAMA article I posted. Read it again before you make any conclusions. The 1 million+ children in the US who are unvaccinated against all recommended diseases aren't solely the poorest ones. Children who are not being vaccinated are ones that have health care but have plans that don't cover the costs of vaccinations! Hence they are labeled as being "underinsured". You don't have to be poor at all to be underinsured. The problem with health care in America isn't just solely the uninsured. Even for people with insurance, many times they have restricted access to health care or receive extremely poor care.

It can be infuriatingly difficult to explain to idiots that while well-to-do people's children are vaccinated and very poor people's children can be vaccinated with the help of government programs, many children of working-class people are NOT vaccinated. In fact, some people have resorted to claiming religious arguments against vaccinations to justify why their kids are not vaccinated and should be allowed in schools, when in fact the real reason is that the parent's couldn't pay for it.

 

[edward]

Putting health care into the same free market basket as automobile and beer factories makes no sense.

Many CEOS are now pulling the same cost cutting tactics with health care as with other businesses. They are cutting services and terminating employees to increase profits. In a health care situation this borders on being criminal.

This is how we got ourselves into the: "push the button and no one comes situation."

Even terminating housekeeping employees is dangerous in a medical facility. We have a whole new surge of antibiotic resistant bugs floating around.

 

[Art]

A gov'ts first duty is to look after the welfare of it's citizens. All of them, not just the wealthy ones. To not have a public health service predicated on need rather than ability to pay is a derogation of this primary duty.

Citizens of countries such as the UK which have had a free public health service for decades would never dream of giving it up. There are issues but Many of the problems in the NHS in Britain are a direct result of the availability of private medical services running side by side with the public service.

For example consultants work for the NHS but also have private practices with the result patients who offer to go private buy themselves a higher place on the consultant's waiting list. This means a public patient gets pushed down a notch seeing as how the time of the consultant is finite and his/her private patients get priority.

The ensuing longer public waiting lists leads to more patients going private and so the problem escalates. This practice was particularly prevalent under the last Tory gov't who are ideologically opposed to the NHS and so were happy to adopt policies and support practices which would lead to it's disintegration.

In Ireland too consultants have not been slow to grasp the opportunities afforded by a dual health care system and are not shy about using blackmail to bend the gov't to their will. Not only do they only work 3 days a week for the NHS which pays them an annual salary of ~€245,000 p.a. ($350,000) which btw a spokesman of theirs recently described as a 'mickey mouse' salary, they also insisted on having free use of public equipment and facilities in public hospitals to treat their private patients. They 'won' this concession by refusing to allow a new major hospital built in Dublin to open until eventually after 2 years of the hospital sitting idle the gov't gave in.

You will find many of the problems oft cited in relation to public health service are not because of flaws in the concept of free universal health care but because of damage inflicted on the service by allowing a private service to operate side by side, the resultant conflict of interests and the archaic protectionism surrounding the medical profession.

 

[Economist]

No. One of the reasons monopolies/oligopolies exist is because of high costs to entry into the market for a firm. There are natural barriers to entry in some markets (like astronomically high costs of getting started) that limit the amount of firms that can enter the market. Economists define an oligopolist market by the 4 firm ratio--the amount of the market that the largest 4 firms in the industry have a share of. If it is above 40% of the market then the market is considered oligopolist. Examine the market for health care. According to the GAO (govt accountability office)

-Blue Cross and Blue shield had over 50% of the market in 9 states (THAT IS JUST 1 FIRM!)

-In almost every state, the largest insurer in that state had an average of 43% of the market (again only 1 firm!)

It is true that some markets have high costs to entry, which produces less than perfect competition. However, there is a lot of debate in the economic community about whether government intervention can help in such markets. I bet if I researched some other industries which have high costs to entry, you may not be crying for government intervention in that particular industry. Competing with Boeing is also an industry which has high costs to entry. Maybe you think the US gov't should start making airplanes?

Economists might define an oligopoly by the 4 firm ratio, however, this tells you nothing about the welfare effects of such a firm. For example, you could have what economists call a natural monopoly, which means that you are a monopoly, but only because other firms can't compete with you. Such as, a firm who's prices are so low (because of low costs of production) that when additional firms enter the market, consumers choose to buy from the monopoly, which is actually beneficial to consumers. This is why economists use the Lerner Index (instead of the 4 firm ratio). The Lerner Index tells you how much a frim marks-up it's prices. You need to realize that being the only firm in a market does not mean you are bad for consumers. Monopolies and oligopolies can and do arise because they are really good at what they do.

You should also ask yourself how monopolies and oligopolies happen in the first place? Often times, market power is a result of government intervention. Part of the reason doctors have market power in the first place, is because the AMA severly limits the number of doctors. You might think that the AMA does this to keep you "safe" from "bad" doctors, but the truth is that the AMA does this precisely to gain market power so that current doctors will have higher salaries. There is also a large amount of market power in the pharmaceutical industry. Again, this happens because of regulation. The FDA makes it so that the average drug requires $1 billion just to get it approved. The result is that, small firms cannot compete because they can't afford this $1 billion, and now you've created oligopolies. You pointed out that high costs to entry result in monopolies/oligopolies. Often times, government regulation is the exact thing which increases costs of entry, which decreases market competition.

You preach freedom of choice and free markets for health care, but in reality WE ALREADY DON'T HAVE A FREE MARKET FOR HEALTH CARE! The insurance industry sure as hell is an oligopolist market! In almost every state 1 firm owns 40+% of the health insurance market! That completely blows out the 4-firm ratio litmus test that economists use to determine whether or not a market is run by an oligopoly.

Again, the 4 firm ration is not a litmus test when it comes to the effects oligopolies have on consumers. I agree that we already don't have a free market for health care. I think many of the current problems are probably a result of this government intervention, which is why I don't want us to make it even worse by getting government more involved.

If you really want to know why health care insurance is not a free market, then I suggest you listen to the podcast below:
http://www.econtalk.org/archives/2006/05/the_economics_o_3.html

You've answered your own question. Of course a perfectly inelastic demand doesn't exist. Even health care demand is not perfectly inelastic, however it is pretty damn inelastic. Once you go beyond a certain point for charging for a MRI, no one will demand it.

Listen, elasticity of demand is not the only thing you must consider. Yes, it is true that MRIs might be fairly inelastic. However, so are many other things that do not have extremely high prices. Food and cigarettes are not that high priced even though they are fairly inelastic. On the other hand, many things have high prices even though they are fairly elastic, such as cars. One thing I think you're forgetting to bring into your analysis, is the supply side of things. The point is, firms compete for costumers by lowering their prices. Therefore, MRI prices may not have much to do with the elasticity of demand.

So you claim the law of diminishing utility is not all to be considered here, but then go on to talk about consumer demand behaviors? That doesn't make sense, seeing as demand is defined by marginal utility! This website actually explains how demand is derived through marginal utility pretty well:

I was trying to point out that just because people have diminishing marginal utility, does not mean that they won't consume more than is available. Economists assume that people have diminishing marginal utility for all goods. However, economists also know that people will often overconsume when prices are artificially low, just as many economists have pointed out even in health care and gasoline consumption.

Do you really think that just because people have diminishing marginal utility, means they won't consume a lot of something? For example, if steak dinners and BMWs were free, I wouldn't consume infinity of them, but I would consume a lot more than I currently am. I'd probably have like 5 BMWs and eat steak 2 - 3 times a week. People rarely stop consuming something because of diminishing marginal utility, rather, their budget constraint usually kicks in way before that which is why they tend to limit their consumption.

You are comparing apples to oranges. The food market is not an oligopolist market! In fact, many times in basic econ the food market is used as an example of a type of market that is almost perfect competition! So according to you " the most important things" should be handled by the free market? Okay so how about national defense? Would you want private companies in charge of all of our nuclear weapons, tanks, and stealth bombers? The problem with health care in America is the fact that it is run by an oligopoly. Oligopolies and monopolies ALWAYS lead to inefficiencies, i.e. market faliures.

You're right that the food market is fairly free market, however in economics classes it is also used as a great example of an industry that has many-free trade barriers because of subsidies. Imagine how good it could be if we made it even more free market by eliminating government intervention?

In my opinion, national defense is a trickier issue than health care when it comes to government intervention. Maybe this is something that cannot be handled by markets, and therefore maybe we need government running it. However, maybe we don't need government as much as previously thought. Even the current US military relies heavily on private industries. Many private industries are hired by the government to build tanks, weapons, and stealth bombers. There are even a large number of private military companies that provide military services (as I'm sure most people are aware given the recent media attention given to Blackwater). Furthermore, the elimination of the draft was hugely studied by economists (in fact, the elimination of the draft happened largely because of these economists). Their solution was that the US government should have to increase pay if they want more soldiers, which essentially made this industry function like a private labor market.

Again, monopolies and ologopolies do not always lead to market failures (see my first couple paragraphs). But you're right that they probably usually do lead to inefficiencies (i.e. market failures). However, once again we need to understand how monopolies and oligopolies often form, which is precisely because of regulation and government intervention. And even more importantly, what can government do about these market failures? You're forgetting that often times, government does not improve the problem, and usually just exaggerates it or has other harmful unintended consequences. You want to talk about market failures, well, what about government failures? You're also forgetting that these market failures can often be solved by markets. These inefficiencies are often tackled by other companies in their quest to make a profit.

What is there to be confused about? You are the competitive market guy for health care. A competitive market tends toward equilibrium, this is one of the fundamental laws of economics. But a competitive equilibrium leads to Pareto Optimal efficiency. This however, does not imply at all that the most efficient allocations of resources are the most equitable. You still haven't answered my question. With a free market system for health care is it socially acceptable that thousands and even millions of people may be left without proper access to health care or insurance? A free market type of system for health care inherently leads to some people who will be shut out from health care even when resources are allocated most efficiently (i.e. equilibrium). So once again is this acceptable to you? If you still find this acceptable then tell me this, would you want someone who falls between the cracks in a competitive health care market and is uninsured running around with one of these diseases (see below) and avoiding hospitals and doctors because they had no insurance or couldn't afford it?

I think you're the one who is actually forgetting the fundamental laws of economics. All societies have to allocate scarce resources. In fact, this is exactly what socialism and capitalism are, different ways for society to solve the economic problem (meaning that people have unlimited wants and needs, but limited resources). Let me throw some of the same questions back at you. Is it fair that some people need to wait for 1 year to get a very important medical procedure? Is it fair that some people die waiting for these procedures? Is it fair that some people cannot pay a doctor for his/her services because it is illegal? Is it fair that some people live in countries in which they cannot get private health insurance because it is illegal?

You mentioned that " a free market type of system for health care inherently leads to some people who will be shut out from health care even when resources are allocated most efficiently (i.e. equilibrium)." Socialism does not solve this problem. The problem which I pointed out above is that there are a limited amount of resources to go around, which is why we try to allocate them most efficiently (this is what the study of economics is all about). So which way allocates these resources best? In my opinion, that's capitalism.

Besides, many people are not dying because they can't afford health care in the US. People still go to the hospital and get treated, even in this "greedy, evil system." Hospitals have to treat them, even if they can't pay the bills. And yeah, some people do go bankrupt because of health care reasons. However, I still think it's better than a socialist approach.

The uninsured put the general public (insured and uninsured) at huge risk. All its takes is one uninsured person going around with a multi resistant strain of TB to spread it to 100's of people because they didn't have access to a doctor or couldn't afford to seek medical care. But this is the risk you run with a free market system of health care.

Again, see my comments above.

Here's another interesting article written in New York times by a prominent Harvard economist: http://www.nytimes.com/2007/11/04/business/04view.html?ref=business

If you're interested in why capitalism works pretty well, be sure to check out these educational links below:
http://www.econlib.org/library/Essays/hykKnw1.html
http://www.econlib.org/

 

[Moridin]

I think you're the one who is actually forgetting the fundamental laws of economics. All societies have to allocate scarce resources. In fact, this is exactly what socialism and capitalism are, different ways for society to solve the economic problem

When it comes to health care, capitalism rewards the privileged and punishes the poor.

Is it fair that some people need to wait for 1 year to get a very important medical procedure? Is it fair that some people die waiting for these procedures? Is it fair that some people cannot pay a doctor for his/her services because it is illegal? Is it fair that some people live in countries in which they cannot get private health insurance because it is illegal?

Actually, the US health care system has long waiting periods as well, mostly due to being understaffed and having too few resources. Since the rich can afford expensive private health care, why shouldn't the public hospitals be restricted to underprivileged only? Then rich people can give some back to society and poor people can get help.

Besides, many people are not dying because they can't afford health care in the US. People still go to the hospital and get treated, even in this "greedy, evil system." Hospitals have to treat them, even if they can't pay the bills. And yeah, some people do go bankrupt because of health care reasons. However, I still think it's better than a socialist approach.

With the public health system being so desperately underfunded (which can be solved by allocating funds away from war and weapon industry, so all the arguments from limited funds are pure nonsense. The US has spent so much money on irrelevant things that could have been spent of health care.), underprivileged people do not know this. They have been badly treated by capitalist public health for decades. "Provided that a person with poor health, lack of education and lack of insurance understands that. Provided that the person understands that it is crucial to take the medication for years. Provided that the person is not being forced to sell the medicine for cash to buy food or rent to survive instead of taking them. I think that it takes public health imperatives both in education and a less hostile environment." (earlier post on the same subject).

 

[Economist]

Actually, the US health care system has long waiting periods as well, mostly due to being understaffed and having too few resources.

So you think the waiting times are comparable huh?

"Provided that a person with poor health, lack of education and lack of insurance understands that. Provided that the person understands that it is crucial to take the medication for years. Provided that the person is not being forced to sell the medicine for cash to buy food or rent to survive instead of taking them. I think that it takes public health imperatives both in education and a less hostile environment." (earlier post on the same subject).

How insulting that you seem to think being poor means your stupid. By the way, if poor people didn't know this, then hospitals wouldn't spend billions of dollars a year treating people who can't afford to pay them.

 

[Moridin]

So you think the waiting times are comparable huh?

Waiting times and information beats no health care at all. Also, more money and resources means less waiting time. If the US focuses more on preventative health, it wouldn't need to spend trillions of dollars on late-age cancer and heart/lung-operations.

How insulting that you seem to think being poor means your stupid. By the way, if poor people didn't know this, then hospitals wouldn't spend billions of dollars a year treating people who can't afford to pay them.

No, but underprivileged means lack of information and a lack of access to public health. It has been empirically shown that those money is clearly not enough.

 

[Economist]

http://www.econtalk.org/archives/2007/11/arnold_kling_on.html

Iteresting podcast on the topic of health care. I just started listening as I am posting this.

 

[drankin]

The poor in this country have many forms of health care available to them. I know, I've had to use it for my family when I was a young adult. It worked, and when my son needed to see a doctor in an emergency, we didn't have to wait in line.

I think health care will always be an "issue" for Americans but I really don't see it as a "problem" for Americans. Unless, of course, we get the government more and more involved.

If health care became free, who would be our doctors? Why would someone go to school for 8-12 years if he were just to get a low paying government job. Those who did, would less likely be quality physicians. The quality guys would end up going to law school instead. Like we need more lawyers in this country.

 

[huckmank]

You want to know where I come from?? I grew up dirt poor, broken home, about as dysfunctional a life one could have, lived on the streets and homeless shelters as a young adult and one day decided to take care of myself. Noone owes me a damn thing because of my situation. It's all me, I own it. I learned how to work, something I was never actually taught never having a father around, put myself thru school when I figured out flipping burgers, moving furniture, and whatever else I subjected myself too wasn't making the best use of my time. And damn it, I'm not well off, but I'm solid middle class now and I live in a country where anyone can do what I did if they get off there butt and quit whining about how aweful their situation is.

Tell me, what do you do when some homeless guy comes up to you asks you for money on the street?

If you went to a public university, took out subsidized loans or accepted grants or scholarships then no, you absolutely did not get where you are on your own.

I have a similar story to yours. I came from a poor household, worked service industry directly after high school and into my 20s and have lived in my car. But I decided to change all that one day and enrolled in a local community college. I busted my ass to do 60 credits in a year and a half with a 3.95 gpa and transferred into a top 10 engineering school where my GPA is a 4.0. So if I wanted to think I was hot **** and owed nothing to no-one, maybe I could.

Then I remember that 80% of the cost of CC is payed for by taxpayers, not me. And that I was given $5,000 in grants, fully paying for my portion of tuition plus some. In addition, the government gave me loans which I don't have to pay interest on until I'm employed. My engineering department payed for my tuition the first semester and grants payed for half the second.

So I hope you went to a private university (hell, private education all your life) and payed cash or took out standard loans to pay for you tuition. Otherwise you're full of **** and you owe your accomplishments in part to a society that helps its underprivileged.

 

[Economist]

If you went to a public university, took out subsidized loans or accepted grants or scholarships then no, you absolutely did not get where you are on your own.

I have a similar story to yours. I came from a poor household, worked service industry directly after high school and into my 20s and have lived in my car. But I decided to change all that one day and enrolled in a local community college. I busted my ass to do 60 credits in a year and a half with a 3.95 gpa and transferred into a top 10 engineering school where my GPA is a 4.0. So if I wanted to think I was hot **** and owed nothing to no-one, maybe I could.

Then I remember that 80% of the cost of CC is payed for by taxpayers, not me. And that I was given $5,000 in grants, fully paying for my portion of tuition plus some. In addition, the government gave me loans which I don't have to pay interest on until I'm employed. My engineering department payed for my tuition the first semester and grants payed for half the second.

So I hope you went to a private university (hell, private education all your life) and payed cash or took out standard loans to pay for you tuition. Otherwise you're full of **** and you owe your accomplishments in part to a society that helps its underprivileged.

Well, you can benefit from something and still criticize and/or disagree with it.

One thing you might be interested to know, is that higher education in the US tends to redistribute wealth from poor to rich (so does social security but that's another story). If you are a little confused about how this could be, just like I was when I first heard this, then think about it this way. Many low income people pay taxes that contribute to higher education in the US, however, the people who's children are most likely to get into and go to college are not low income people, in fact wealthy people send their children to college at much higher rates.

 

[huckmank]

Well, you can benefit from something and still criticize and/or disagree with it.

Sure can, but if you take free money from the government and then ***** about others doing the same, you're what we call a hypocrite.

One thing you might be interested to know, is that higher education in the US tends to redistribute wealth from poor to rich (so does social security but that's another story). If you are a little confused about how this could be, just like I was when I first heard this, then think about it this way. Many low income people pay taxes that contribute to higher education in the US, however, the people who's children are most likely to get into and go to college are not low income people, in fact wealthy people send their children to college at much higher rates.

Back up your statement with figures, not just a priori arguments. The poor also pay a lower tax rate. I'd be interested to see if the ratio of taxes paid by the wealthy vs. the poor outstrips the ratio of state university enrollment of the wealthy vs. poor. I doubt very highly that it does.

Regardless, federal grants are need-based and many scholarships are more easily obtained by minorities or those of limited means.

 

[drankin]

If you went to a public university, took out subsidized loans or accepted grants or scholarships then no, you absolutely did not get where you are on your own.

I have a similar story to yours. I came from a poor household, worked service industry directly after high school and into my 20s and have lived in my car. But I decided to change all that one day and enrolled in a local community college. I busted my ass to do 60 credits in a year and a half with a 3.95 gpa and transferred into a top 10 engineering school where my GPA is a 4.0. So if I wanted to think I was hot **** and owed nothing to no-one, maybe I could.

Then I remember that 80% of the cost of CC is payed for by taxpayers, not me. And that I was given $5,000 in grants, fully paying for my portion of tuition plus some. In addition, the government gave me loans which I don't have to pay interest on until I'm employed. My engineering department payed for my tuition the first semester and grants payed for half the second.

So I hope you went to a private university (hell, private education all your life) and payed cash or took out standard loans to pay for you tuition. Otherwise you're full of **** and you owe your accomplishments in part to a society that helps its underprivileged.

Of course I relied on the "society" to go to school and to get on my feet. I don't know what you are arguing. My point is anyone "underprivilaged" can, the means to do it is available. For someone not to take advantage of what is available is a waste. The deeper reason as to why many do not is not because they don't know it's availabe, it's because they don't to put forward the effort and do it. You don't get an education for free even if you don't pay a dime for it, you work for it. IMO, most people who complain about how unfair it is that they are poor and underprivilaged are the same people that think society owes them sustenence because they are breathing.