Free Market Health Care
An excellent brief summary of the problem with a free market approach to health care from James Kwak:
I happen to think that a free market for insurance works pretty well in most circumstances (and I did co-found an insurance software company); for example, if you can afford the house, you can generally afford the insurance for the house. But it doesn’t work very well for health care, because many people are simply uninsurable under free market principles (expected health care costs exceed their income, let alone their ability to pay), and hence would be left to die. We think we have a private, for-profit insurance system today, but we can only avoid its disturbing implications by hedging it in with public backstops and regulations.
Since nobody is proposing a true free market system, we tend not to dwell on these facts. But I think they’re more important than people realize. If you think about free markets’ ability to, say, deliver falling prices for high-definition televisions I think you’ll quickly see that one key element of the process is that our society is very sincerely prepared to say that if you can’t afford an HDTV, you’re going to have to do without one. Consequently, when the technology is introduced you wind up with a larger number of people who would buy the HDTV at some price but not at the price being asked. This creates a large market incentive for someone to come up with a lower price point for HDTVs, and to invest in technical research that will make it profitable to sell cheap HDTVs.
This process works really well. But when you replace “has to watch the game at a friend’s house if he wants to see it in HD” with “gets sick and dies” then suddenly the process looks not-so-good. But absent a strong and firm social commitment to the “gets sick and dies” part of the equation, the whole process starts looking different. You wind up with a scenario where there’s a strong case for much more systematic government intervention, because whatever kind of “market” dynamic you’re willing to unleash on the health care sector is going to be substantially distorted by the baseline government interventions needed to meet our core social values.
A related part of this is that medicine has never really been understood as a commercial enterprise. A doctor is, in our social understanding, not a “medical treatments salesman” any more than a soldier is a mercenary.
66 Responses to “Free Market Health Care”
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May 11th, 2009 at 5:55 pm
My experience with free-market healthcare: I went to the hospital and told them I didn’t have insurance and couldn’t afford treatment. They said, you need treatment and we won’t let you leave. So they gave me the treatment and a bill for $15,000. That’s the free market!
May 11th, 2009 at 5:58 pm
Yep, we already have universal health care of sorts–we just don’t have a universal way of paying for it. Which is kinda crazy when you think about it.
May 11th, 2009 at 5:59 pm
There are a lot of people out there who would say that this is a feature, not a bug.
These people are the moral degenerates that we need to overcome. They’re more numerous than you think, and all but the least self-aware libertarians are bright enough to speak of this in code. But there are a lot of people who think that if you can’t afford health insurance, you should die.
May 11th, 2009 at 6:03 pm
Are we ok with saying you have the right to all the healthcare that is available now. But, if in 5 years they have $75,000 artificial hearts, and you have congestive heart failure, you will only be given the treatment that exists today. Only those who opt for the supplimental insurance can get the new drugs/procedures/scans etc.
May 11th, 2009 at 6:06 pm
“But there are a lot of people who think that if you can’t afford health insurance, you should die.”
Would you agree that someone who has the means to buy insurance but choses not to – prefering to use that $500 a month on a nicer car or a vacation – that person deserves to die if they get sick.
I, for one, have no problem saying that they deserve to die.
May 11th, 2009 at 6:08 pm
ON the “Has to watch it at someone else’s house” and the “Gets sick and dies” thing, it shocks me how many people don’t see any difference between the two.
No DTM, we don’t. Despite what the elite tell you, going to the emergency room doesn’t give you much healthcare. It doesn’t give you check ups. It doesn’t check for cancer. It doesn’t do anything preventative. All it does is give you a place to go to die, or get accidents taken care of.
May 11th, 2009 at 6:14 pm
“I, for one, have no problem saying that they deserve to die.”
You are one sick fuck.
May 11th, 2009 at 6:16 pm
Dang culture of life.
May 11th, 2009 at 6:19 pm
Bloix,
You really think that people who can afford health insurance but choose to spend the money on a car or a trip don’t deserve healthcare?
Why should they get – they made their choice and should be forced to live with the consequences.
If they can’t afford it – it should be provided by the state. But, if they can afford it and chose not to buy it – to hell with them.
May 11th, 2009 at 6:21 pm
That should read:
“You really think that people who can afford health insurance but choose to spend the money on a car or a trip deserve healthcare?”
May 11th, 2009 at 6:22 pm
This health-care debate is going to be depressing. It’s one area where the old 1990s messaging (read: lies) of the Republicans might still work. OMG socialism! OMG government might make some rules! Never mind the current system is broken and everybody knows it.
I’d like to make every member of Congress who dares to oppose the public option give up their own public health insurance packages.
May 11th, 2009 at 6:32 pm
Ultimately, health care is a form of extortion. Want to live? That’ll be $70,000, bitch! As a market, it doesn’t lend itself to free market practices. It’s more consistent with insurance companies acting like mafia thugs. And that’s if you can even get insurance.
May 11th, 2009 at 6:34 pm
Just out of curiosity, JMO, what mechanism are you proposing to make sure that people “can afford it?” Maybe IRS agents monitoring doctors’ records (and people’s vacation plans) to make sure patients who can afford to pay aren’t trying to “sneak in for free?”
May 11th, 2009 at 6:42 pm
You really think that people who can afford health insurance but choose to spend the money on a car or a trip don’t deserve healthcare?
The problem with this is that it is a pure strawman. Hardly anybody is in the position where they can “afford” health insurance but instead choose to spend the money on purely frivolous items like nice cars or vacations. Most people who can’t afford health insurance also can’t afford nice cars or vacations — or oftentimes, their rent or mortgage payments. The fact of the matter is that health insurance costs upwards of $1000/month for a family (looking at the HR memo that went out today, the cheapest option provided by my government employer is $1070/month). That’s $12,000 per year, or over a quarter of the median pre-tax income. Let’s say a family is making $48,000 a year. Taxes on that are going to take them down to about $42,000 a year. Rent/mortgage is going to be another (say) $1000 a month. They’re now at $30,000 even. Food for a family of four is going to be at least $500/month. Now they’re at $24,000. Utilities and water are another (say) $150/month, so they’re looking at $22,000. Clothing is probably another $2,000 annually — down to $20,000 now. Gas is $200/month (probably more, because the $1000/month place no doubt is in the exurbs), which brings us down to $17,500. A single car payment plus insurance on a reasonable car is going to be $400 a month — now we’re looking at $12,500. Anything else is going to make health insurance unaffordable.
You see the problem? A family of four above the median income with a cheap-ass apartment or house, a single reasonable car, and cheap eating habits can’t afford the cheapest family policy without some sort of (employer or government) subsidy. They’re not foregoing health insurance in favor of luxury items. They’re foregoing it in favor of rent and groceries.
May 11th, 2009 at 6:42 pm
jmo, if we had public healthcare, this wouldn’t be an issue. A percentage of your income would go into the national pool, and if and when you need treatment it would be paid for from the pool. You wouldn’t be able to waste money on a vacation only later to realize that you need that money to pay for treatment.
May 11th, 2009 at 6:45 pm
This is exactly why you need to take a few firearms with you to the doctor’s office, thereby leveling the playing field.
May 11th, 2009 at 6:48 pm
Re: But there are a lot of people who think that if you can’t afford health insurance, you should die.”
No there aren’t. Sure, in a population of 30 million you can find people like that, but they are fairly rare. Most people who oppose major health reform simply assume that care will given to the uninsured via ER rooms, charity or Medicaid. They’ve always had healthcare coverage (at least when they needed it) and as such they are as unacquanited with the reality of being sick and uninsured as Marie Antoinette was with the reality of not having enough to eat. They don’t want to see people die, they just figure since they and everyone they know has never been in those circusmtances no one else really is either.
May 11th, 2009 at 6:51 pm
There are a lot of extremely expensive medical procedures out there that don’t have a very large impact on life expectancy. We don’t provide them because they pass any rational cost/benefit test. We provide them because (i) when someone is seriously ill, we feel like something has to be done even when it isn’t likely to be terribly productive and (ii) we consider the absolute certainty of death much worse than the overwhelming likelihood of death.
Very expensive medical care is more often about providing hope than saving lives, and I’m not sure that’s the best use of tax dollars. The value of health care is massively overestimated. Life expectancy is much more a function eating well, exercising and living in a safe, sanitary environment.
May 11th, 2009 at 7:04 pm
Joe,
You don’t know what the fuck you’re talking about. Of the 40 million uninsured 15 make more than 75k a year.
May 11th, 2009 at 7:15 pm
Joe (comment above – 6:42pm) argues that any portrayal of the public healthcare debate that involves individuals making tradeoffs to afford healthcare is a strawman.
Actually, the spirit of the original post is more of a strawman – in that Mr. Yglesias has the luxury of choosing his counterexample. HDTV is the kind of thing we instantly recognize as a luxury good, so it makes his argument seem simple.
However, choose another example – an example which is also a necessity, such as food – and the case is not so neat anymore. Foodstuffs are supplied by the free market with no trouble. So the issue isn’t that healthcare is different because it’s “not a luxury.” There was a time in human history when food was crushingly expensive too. Thanks to free market innovation, it is now quite cheap and is available to everyone for a small fraction of whatever wages they earn. There was a time when your alternative to paying the market price for food was also “you starve and die,” and yet the normal price competition mechanisms continued to work in the normal way, to the point where now a slab of steak (the kind of thing that would have been considered quite a luxury even 100 years ago) is now available at less than an hour’s worth of the minimum wage.
We didn’t solve the resource allocation problem in foodstuffs by handing out food on the basis of need, and we won’t solve it that way in healthcare either. All that is being suggested by people who want to nationalize the healthcare system is that we retard technological progress in this crucial area. I don’t see how that is expected to help.
May 11th, 2009 at 7:53 pm
> You don’t know what the fuck you’re talking about. Of
> the 40 million uninsured 15 make more than 75k a year.
And the other 39,999,985?
Cranky
May 11th, 2009 at 7:55 pm
> There was a time in human history when food was
> crushingly expensive too. Thanks to free market
> innovation, it is now quite cheap and is available
> to everyone for a small fraction of whatever wages
> they earn.
We in the US, and those we supply via exports, are basically eating oil. When the supply of cheap oil runs out so does the supply of cheap food (and that’s assuming the Illinois/Iowa soil doesn’t give out first). The reason the food is “quite cheap” is that since the days of “There Will Be Blood” the US has pursued a policy of getting as much oil as possible as cheaply as possible. That had very little to do with the free market.
Cranky
May 11th, 2009 at 8:31 pm
That is a lie. Food is cheap because of government subsidies, not the free market.
May 11th, 2009 at 8:34 pm
Government funded health care is cruel, because it prolongs suffering to those who really need the care, like the elderly and very sick. It also raises health care cost making it unaffordable to everyone, including government. This is why government health care often causes health care rationing, shortages, and diminished quality of care.
Currently the cost of health care are going up because of government interference, making people depended on insurance companies. It is also big government who dictates insurance regulations, insurance laws, and the way insurance companies handles claim, despite if premiums are raised and claims are denied.
Government health care denies people health care choices and leave critical medical decisions in the hands of government bureaucrats who will decide if you qualify for care.
Where do you go if the government denies your care because it is too expensive, as it often does with the elderly or to those who statistically are going to die anyway!
What does the doctor do when he or she is not paid or told what kind of care the needs to be offered?
There is a reason why cures for sickness are found here and not in other places in the world. There is a reason why the really sick come here.
May 11th, 2009 at 8:42 pm
22 and 23 beat me to it, so I’ll just add that what they’re responding to is the worst kind of “magic of the free market” libertarian mythology.
May 11th, 2009 at 8:49 pm
Re: There is a reason why cures for sickness are found here and not in other places in the world. There is a reason why the really sick come here.
???
This is just, well, nuts.
Other technologically adept nations also find cures and make innovations in healthcare. And while RICH sick people may come to the US, there are instances of US citizens going abroad for healthcare too.
Re: Government health care denies people health care choices and leave critical medical decisions in the hands of government bureaucrats who will decide if you qualify for care.
Yes, and our current system leaves healthcare decisions in the hands of insurance company bureaucrats who make those same exact determinations.
Re: Where do you go if the government denies your care because it is too expensive, as it often does with the elderly or to those who statistically are going to die anyway!
And insurance companies do that too. But meanwhile, how common is the above with Medicare, or even Medicaid?
May 11th, 2009 at 8:56 pm
Really? Do you have any evidence of this? Because I can provide evidence to the contrary; namely that government funded health care is kind because it provides provides health care to the very sick and elderly when no one else will – Medicare and Medicaid. Also to children.
I would suggest that health care costs are going up because of supply and demand forces. Too little supply and too much demand. Isn’t it easy to blame excess demand on a “culture of life”? And isn’t it easy to blame a dearth of supply on doctors and medical associations who form cartels and artificially constrain supply, driving up costs?
Probably to an ER where they cannot turn people away. The ER will probably take a loss treating you, and possibly bill the government for it. You haven’t really thought about this very hard, have you?
May 11th, 2009 at 9:45 pm
maybe the U.S. should strike a visa lottery system deal with countries with national health care to give some of our unwell a chance at life without a mountain of debt
the u.s. political system is so fucked
May 11th, 2009 at 9:47 pm
The equation in free-market health care is simple – A) How many of our customers can we charge premiums to and then B) screw when it comes time to pay before C) there is an overwhelming cry for reform. They’ve been trying to negotiate that sweet spot, but it’s an unwieldy ship, and it’s running aground (God willing).
May 11th, 2009 at 10:04 pm
While true socialism (government control of production) has ultimately failed in all countries so far in peacetime, government-provided medicine has succeeded in all instances in advanced countries. Transportation and many other services are provided wholly or in part by government and there is no reason why medical care can’t be also. There is no need to try to justify government-provided medical care theoretically – the case on the evidence is open-and-shut.
May 11th, 2009 at 10:13 pm
As an aside, with plastic surgery and laser eye surgery, where we are willing to let people go without, prices have dropped dramatically.
May 11th, 2009 at 10:18 pm
I look forward to all the so called free market innovations that will provide cheap health care for all, much like it did in agriculture.
I can only imagine that the equivalent of tractors and fertilizer, which I guess would be robot doctors and nanobots in our blood streams, are right around the corner.
May 11th, 2009 at 10:22 pm
The salient fact in the health care debate is that there are always enough Americans who would volunteer to live with their family in a cardboard box under a railroad bridge, and toast sparrows on an old curtain rod over an open fire, to defeat any plan, so long as you guarantee them that the people in the next box over — black, gay, foreign, liberal, different — don’t even get the sparrow.
Some of them have posted above.
These, together with those with a business interest in the status quo, are sufficient to indefinitely prevent implementation of any national health plan. Truman couldn’t do it. Johnson couldn’t do it, Nixon couldn’t do it, Clinton couldn’t do it.
Too many angry people, too many stupid people, all passionately committed, and a lot of powerful entities only too pleased to wield them, and their own great wealth, in defense of the status quo. A minority ready to die in the last ditch, and a lot of cash, is far more powerful than a tepid majority.
Maybe a few more states will cobble things together — a smallish state’s population may have a fighting chance of possessing enough social solidarity to overcome the cardboard box-dwellers. But nationally? It will never happen.
Wars are not rational, but people will die for their beliefs in them, all the same, and account themselves heroes.
There’s no reason to expect the committed minority not to die for these beliefs, not on a battlefield, from violence, but at home, slowly, from lack of proper medical care, if that’s the price of maintaining those beliefs, and whether they take others with them is the least of their concerns.
May 11th, 2009 at 10:50 pm
There’s a slight variant on the jmo argument: if you consider the US “healthcare system” morally abhorrent, you can just about opt out, even though that may severely curtail the kind of activities you’re prepared to undertake to minimize risk. That’s something you can’t say about wars of choice or torture schemes or bank bailouts.
It misses the point somewhat, though. The real issue is one that Ezra highlighted: the “stuff of medicine” is not priced for individual purchase. It’s a bit like licensing Oracle for your database, where the cost only makes sense as an amortizable expense on a decent-sized company’s accounts and tax returns. (Or how Adobe used to price Photoshop high because it’d be written off.)
If you pool risk, though, the collective costs are just about manageable.
Government health care denies people health care choices and leave critical medical decisions in the hands of government bureaucrats who will decide if you qualify for care.
As opposed to… what? The drones at the insurance company, who’ll give you the “computer says no” treatment, and won’t tell you if a test or procedure is covered before you have it done? Spare us, you fucking idiot.
May 11th, 2009 at 11:05 pm
Good grief, one of the biggest impediments to real change in our health care system is the fact that non-poor retirees in the U.S. face less rationing than non poor retirees in all the systems the reform advocates hail as models to follow, and non poor retirees are among the most heavily sought after electoral groups. There is no better place on earth to be a non-poor 75 year old fat diabetic with a heart condition, and severely arthritic knees, than the U.S., and those people will mostly vote to keep it that way.
Why shouldn’t they? They have been trained, most earnestly by Democrats, but certainly by Republicans as well, that the rationing of health care services is not something that they should endure.
Matthew’s post erects a strawman, where a free market health care system allows people to doe when they can’t pay, versus his preferred model, in which he fails to mention that some folks will die when political actors deny care that is deemed too cost ineffective. The unavoidable fact is that health care will always be rationed, and some will die as a result of that rationing. Extremely few people, from any part of the political spectrum, are willing to frankly state who will be left to die in their preferred regime.
May 12th, 2009 at 12:11 am
There’s another basic problem with a free-market approach. A viable free market would require both parties to be knowledgeable about the product, and health insurance is far too complicated a product for people to understand.
May 12th, 2009 at 12:31 am
The stupidity of the health-care opponents on this thread is only exceeded by their venality.
May 12th, 2009 at 12:50 am
Excellent insight as always.
May 12th, 2009 at 1:04 am
There is no better place on earth to be a non-poor 75 year old fat diabetic with a heart condition, and severely arthritic knees, than the U.S., and those people will mostly vote to keep it that way.
There is a counter-argument to that, of course, which is that the situation as it stands turns Medicare into the feast after the famine for too many Americans. Given that most 75-year-olds have children and grandchildren, it’s certainly not unfathomable that an argument based upon generational equity could be made.
Extremely few people, from any part of the political spectrum, are willing to frankly state who will be left to die in their preferred regime.
Including you, apparently. Unless you’re happy with the American status quo, which is “the poor”. In the actual developed world — which, I know, gives glibertarians the willies — it’s not so easy to make such generalisations.
May 12th, 2009 at 1:07 am
I don’t remember being particularly knowledgeable about flat screen TVs. Yet progress marches on. Interestingly, firms that provide better than average goods at a lower than average prices have this fantastic invention called advertising.
I’m not sure how the “US pursues” policies without the obvious hand of the government which you hold in such high regard. Without government roads, subsidies, and other forms of nonsense we would certainly use far less Oil, but in the same twisted reality you turn to government control to fuck up even more.
This is almost too stupid for words. For someone else to respond with:
holds little hope for the US.
May 12th, 2009 at 1:29 am
I think Matt’s original comparison to federally funded military is interesting–why is it ok to fund bombing sorties but not ambulance rides?
In my experience, as a physician and as a patient–people with good private insurance often get unnecessary care–a long long long ICU stay in the last months of their life instead of hospice referral, back surgery when perhaps weight loss and some gentle swimming and water physical therapy would work just as well. People with basic medical coverage may get “less” but it is often better, depending on how you define it. Either way, though, it is not free, and a key problem in free market for health care, is that you can’t be an educated consumer and shop around when you are gasping for breath with severe pneumonia or getting scraped off the highway after your motorcycle wreck.
Publicly funded health care, such as that in the DOD and VA system, is actually better than private when you look at countless quality metrics, universal access, cost effectiveness etc. (the Walter Reed mess was not about the quality of medical care, it was about housing and support for patients not in the hospital). It was interesting to me during the presidential campaign that McCain spoke against it, even though he and his mother are both cared for free of charge at Naval Medical Center Bethesda.
Finally–the current “free market” system that pays for procedures and pills, but not for thinking has caused most doctors who want to make a living and minimize headaches to leave primary care. I am taking a non-patient care job that pays 30% more with much less demanding, but much more intellectually stimulating work. Thoughtfully caring for patients with multiple competing medical problems and keeping them out of the hospital does not pay, even if it is personally rewarding at times.
May 12th, 2009 at 2:04 am
I would really like to see more of this kind of thinking. Medical services just are not provided the same way say, shoes are. If I’m in a car accident, I’m not going to go shopping for the best trauma center, as if I could tell a good one from a bad one in the first place.
May 12th, 2009 at 2:20 am
The difference is that there are only a handful of differences between competing television technologies, and those are easily explained by a qualified salesperson. There are thousands of differences between health-care policies, and those differences are multiplied by big variables between consumers (eg. age, location, gender, lifestyle).
May 12th, 2009 at 5:37 am
Hardly. Food is not generally subsidized, but in those areas where it is the subsidy has the effect of raising, not lowering, the price.
Healthcare choices can also be explained by a qualified salesperson – it’s just that it takes a lot more to get qualified as a salesperson in this area than it does to get qualified selling HDTV. But that is as it should be, as healthcare is not a simple matter that should be taken lightly. One of the dangers of substituting government decisionmakers for the free market in this area, in fact, is precisely that people become complacent about these choices – which then get farmed out to bureaucrats who don’t, and cannot possibly, have their highly individualized interests in mind.
The operative phrase being the “used to” in the parenthetical. All technological innovations enter the market out of the price ranges of ordinary people. Opportunities to expand profit come primarily from finding ways to expand consumption of it – which invariably means finding ways to price them in a way that more people can afford them.
May 12th, 2009 at 8:44 am
Ah, my good friend Will Allen, hundreds of billions to murder foreigners, any time, any place. But talk about doing for Americans and Will Allen wants them fucked over. Come to think of it, it is the same morality. There can never be enough blood and suffering for Will. But I guess that’s what comes of being a violent narcissist.
Hey Will, how many needless deaths will it take in Iraq before you think it was a bad idea? I’m going to have to go with more than 1,000,000 because even after that many in Vietnam you still think we should have (indeed that only George McGovern prevented us from) gone on to invade Cambodia.
Will “kill them now, kill them now, kill them right fucking now” Allen – too stupid to recognize that no one could have gotten the US to move from failure in Vietnam to failure in Cambodia; whose instability was a direct consequence of the road to failure in Vietnam.
Here’s another question Will: what should be done? Take away Social Security and Medicare? Would that help you get your fix on dead Americans to go with the dead Iraqis?
May 12th, 2009 at 9:06 am
“A doctor is, in our social understanding, not a “medical treatments salesman” any more than a soldier is a mercenary.”
No less than the Army Chief of Staff during the transition to the US volunteer army, General William Westmoreland, described the volunteer army as made up of mercenaries…
May 12th, 2009 at 9:59 am
soullite,
I said we have “universal health care of sorts“, which in fact is consistent with your observations about the problems associated with relying on ERs to provide health care. In turn, this is one of the many distortions caused by not having a system designed to actually pay for universal health care.
May 12th, 2009 at 10:07 am
Just out of curiosity, JMO, what mechanism are you proposing to make sure that people “can afford it?” Maybe IRS agents monitoring doctors’ records (and people’s vacation plans) to make sure patients who can afford to pay aren’t trying to “sneak in for free?”
Ah, but we *already* have a system for making sure people pay what they can afford to pay and nobody sneaks in for free. It’s called taxes. Taxes are *designed* to eliminate free riding – that’s the whole point of having an IRS and a tax code – and they do a darn good job of it, too.
JMO makes an excellent case for single payer, whether intentionally or not.
May 12th, 2009 at 10:29 am
FXKLM (#18) wrote: “Very expensive medical care is more often about providing hope than saving lives, and I’m not sure that’s the best use of tax dollars.”
Why the restriction to tax dollars? To expand on a point that Sibyl (#41) made above, I had a friend who was diagnosed with a very severe type of cancer, which had already metastasized. The doctors were very honest, and said that it was six months, at most. However, there were a lot of different treatments that they could try, because the insurance would cover them, even though none of them were likely to help. In the end he chose palliative care and eventually hospice, and made it to seven months – but he could have spent close to two million dollars during that time, if he’d chosen the treatments.
On a similar theme, two people I know were diagnosed with mild cancers several months ago. They have received very different courses of treatment, although their cases were similar. When they were sharing stories, one could cite instances where his physician had said basically “This test isn’t really essential, but it’s covered by your insurance,” while the other had the awful contrary story, “You really should have this medication, but your HMO won’t pay for it.” Fortunately both are responding well to their treatments, but it’s clearly a case where the insurers – both of them private companies – were influencing the doctor’s treatment decisions.
May 12th, 2009 at 10:50 am
@49: I would also point out that if your friend had chosen the expensive treatments, everyone else with the same insurance company would have ended up paying for them through premiums. (Indeed, they already are paying for the people who made the other choice.)
Of course, the same thing applies to a tax-funded system that allows individuals to spend millions of public dollars on long shots.
I’m willing to say that people who want to spend millions of dollars on a desperate gamble with only a slim chance of improving their outcome should not expect it to be paid for by the government or by insurance, that they should buy it out of pocket or go without (which may include dying, but ex hypothesi, they were probably going to die even if they got the care); and that it is an unfair load on the rest of the taxpayers/premium payers if it *is* paid for out of the general risk pool, because it means higher premiums for everyone and/or dropping coverage of something else that would be more medically effective for the people who need it.
But I’m not qualified to define “slim chance” or which combinations of condition and treatment fall into that category – that would have to be done by a committee of doctors, probably. (And the answers would change as medical technology changes and new medical evidence comes in, so it would have to be a continuing body.)
May 12th, 2009 at 11:11 am
We didn’t solve the resource allocation problem in foodstuffs by handing out food on the basis of need
Yes we do. In fact, we have for thousands of years, going back at least as far as the grain dole in the Roman Republic, all the way to food stamps in the modern US.
And to everyone who keeps yammering on about how the free market will somehow make health care better: we’ve had a free market health insurance system, and it’s failed. It doesn’t work. Also, how will it do so? Besides just “the free market has special magic powers that make everything better!” None of this free market worship has any actual logic behind it.
May 12th, 2009 at 12:06 pm
Labeling something magic doesn’t make it so. Explanations for why the free market works as well as it does are easy to find – and indeed generally accepted by economists across the political spectrum (save, perhaps, a handful on the extreme left).
The food stamp program did not create the current abundance in food, nor is it the reason that food prices are cheaper than they have ever been in history. If anything, it pushes prices higher by reducing price competition at the lower end of the pricing spectrum.
May 12th, 2009 at 12:08 pm
Can we please never hear this again?
AKZO Nobel, Astellas, AstraZeneca, Bayer, Boehringer Ingelheim, Eisai, Roche, Merck KGaA, Novo Nordisk, Sanofi-Aventis, Schering-Plough, Shire, Teva…
These are just a few of the non-American pharmaceutical corporations inventing cures for sickness while being happily located in countries providing National Healthcare. So could you please stop repeating the lie that all drug discovery comes from the USA?
May 12th, 2009 at 12:22 pm
It really is shocking that some folks can’t grasp that a company headquartered in country X will allocate capital to invent new technologies in pursuit of profits which are thought to be available in country Y, but not in X.
May 12th, 2009 at 12:38 pm
pseudonymous in nc, you don’t need to preach to me about generational equity. I’ve been lamenting for many years now the fact that our national government’s highest priority is to transfer wealth to the age demographic with the highest median net worth, often from demographics with much lower median net worths, without any regard to any individual in the wealthier demographic being able to care for himself. Reactionary progressivism, unfortunately, is the dominant political movement in our society.
As to my preference, if I was able to make my preference law, I would have a few standard insurance plans available, and mandate that individuals purchase one at age 18, with a Medicaid-type program for the tiny number of people who are uninsurable at age 18. I would ration by placing an inflation adjusted limit on the amount of benefits any individual could receive in their lifetime, and after that was exceeded, they would be on their own. This would certainly be more transparent than what exists now in this country or in many other countries.
May 12th, 2009 at 1:28 pm
Explanations for why the free market works as well as it does are easy to find – and indeed generally accepted by economists across the political spectrum (save, perhaps, a handful on the extreme left).
And explanations for why it doesn’t work any better than it does – i.e. for its limitations and failures – are easy to find and generally accepted except for a relatively large, well-funded contingent on the extreme right.
The free market is good at what it does, but it doesn’t do everything. The fact that *sometimes* the public interest is advanced by individuals pursuing their private interests does not mean that it *invariably* is. That’s the difference between recognizing the benefits of the free market and worshipping it as a god.
May 12th, 2009 at 1:37 pm
Unfortunately, chris, those who advocate for non-marketbased approaches for the allocation of resources usually aren’t honest enough to admit that such approaches will invaribaly entail unpleasant trade-offs.
May 12th, 2009 at 3:30 pm
Will (@57), those unpleasant trade-offs aren’t any different than in the current system. It’s just that some people are comfortable with the arguments that are used to justify the unpleasantness.
May 12th, 2009 at 4:25 pm
Now that that rather obvious truism is settled, can we discuss the topic at hand?
May 12th, 2009 at 9:39 pm
Ahh, economics boiled down to political popularity. And we wonder why the people responsible for the biggest problems in our lives are repeatedly given power.
I wasn’t aware of any libertarians with a particularly deep war chest.
May 12th, 2009 at 9:42 pm
I’m still not understanding you. Markets have given 250 million Americans health insurance. Sorry, the poorest 15% has been slow to join, no thanks to government programs and directives increasing the price of said insurance. To blame the failure of an overbearing government on free markets as an argument for more government is fucking insane.
May 13th, 2009 at 2:04 am
Markets have given 250 million Americans shitty health insurance.
Fixed your typo, there. The American Way of Healthcare is fucking stupid, and if you endorse it, you are fucking stupid too.
May 13th, 2009 at 2:17 am
This would certainly be more transparent than what exists now in this country or in many other countries.
Again, that’s great until you hit reality. Take someone like Roy Edroso, who has a genetic condition that is sufficiently rare that the NIH actually calls him into DC twice a year to check him out, because (praise large nations!) the US is big enough to have 8,333 sufferers of a 1-in-36,000 disease.
As Edroso put it:
That’s the American Way of Healthcare. Take the cancer patient who astonishes her doctors by surviving her prognosis by five years, enough to make it worthy of a research paper. Impose a cost ceiling on those patients who defy the odds, and you run the risk of preventing that from happening. In spite of the mindset of some who regard wealth and health as two sides of the same coin, the rich and well-insured are not always the people whose treatments make a difference to the way doctors work.
We can agree on the generational inequity. Perhaps I’m naive to think that having something that prevents Medicare from being a healthcare binge after a working life of scrimping will change the climate sufficiently away from expensive treatment with diminishing returns late in life. We’ll only know for sure if something tries to restore the balance.
May 13th, 2009 at 8:26 am
Once again, thanks to the government.
May 13th, 2009 at 10:33 pm
Once again, thanks to the government.
The government didn’t make you fucking stupid, Nathan.
May 15th, 2009 at 2:51 am
The NIH does great work? HAHA. I guess you’d say the same thing about the NCI as well? Considering our cancer statistics are obviously heavily manipulated and more Americans are dying from cancer now than they ever have.
Let’s face it. The entire point of national healthcare is to spread the risk among the general population. Fuck that! I don’t want to pay for stupidity, laziness, and irresponsibility. You average American is out of shape, fat, lazy, and uninformed when it comes to their health. They need to start taking responsibility for their actions. No one is saying that some kid born with a rare genetic disease or a poor person who genuinely cannot afford basic healthcare will go untreated. That’s crazy. But to give EVERY American the same access and quality of healthcare is unAmerican and ridiculous.
Oh and just so you know most countries with socialized medicine CANNOT continue to afford it without major changes. It’s just too damn expensive.
Healthcare is a product like anything else. You can either increase supply or decrease demand. Government is a hinderence to both. I work in a hospital setting and it’s silly all the rules and regulations doctors, nurses, and healthcare teams have to deal with. Just look at JCAHO. LOL. They are a complete joke.