How will health care work when...

[robdashu]

Yes, that's why I say allow the consumer to choose among regulatory structures, that way he might be able to find an option that fits within his budget constraint. But you don't want that

whoa. I never objected to that concept. But a choice of regulatory structures is not freedom, by your definition.

, because you don't trust the consumer to do what's best for him

The "consumer" is the subject of vast amounts of "normative" influence through the media, the schools, and the promoted public discourse. This harks back to the basic issue of "rational choice" as the driving force in economics. I don't believe it's importance is as great as you would have it. So, I think your idea, that the public can make their own best decisions for themselves is, in many arenas, dead wrong. The framework in which they can work to solve their own problems is limited by the commercial environment. Try to go to a supermarket and buy any commercially prepared food, from snacks, to "dinner mix preparations", to desserts. You will be hard pressed to fill your caloric requirements without exceeding health guidelines for intake of unhealthy fats and sodium. So what? I think, if you look at Japanese health statistics and expenses, you will find a large difference in the level of expense treating these diseases; much of the difference is attributable to diet. In their case, cultural and geographic forces have caused them to eat little red meat, and their rate of cardiovascular problems (primarily heart attack and stroke) is strikingly low.

In fact, choice in food is one of those externalities that we could talk about. Given a broader set of choices, the public could maintain its own health more effectively through its diet. But mass production of foodstuffs requires changes to the ingredients, additions of more and more "conditioners", preservatives, and artificial flavorings, and added sodium for taste and preservation; and most - or nearly all - available products in the supermarket (where most people in America shop) are mass produced. To promote attractive food in the stores, they have narrowed the varieties available of various vegetables, tinkered with the characteristics of what they distribute through selective breeding (e.g. taking all taste out of "tomatoes"), I know I may come off sounding like I am against progress, but I believe some processes are best performed in a distributed manner, despite the potential "economies of scale" offered by mass, central production, with associated long distribution chains. But based on the "economics" of the two approaches, mass production seems to be more effective.

If we include the unmeasured costs - in food quality, in environmental quality, in risk to the security of our foodstocks - industrial agriculture and commercial food processing for easy consumption is not such a clear winner.

, which is why you support restricting people's ability to choose what they eat and how they eat it and why you support the government choosing what services to allow. But what I don't understand is why you can say all of that and say, "well, you know socializing medicine is not really about restricting access." It's entirely about restricting access, choice, and freedom.

Yes. Some freedoms are ceded to the state when you live in a country like ours. The state needs to generally rein in aggressive interests that seek to use personal circumstances and advantages to enrich themselves at the expense of the rest of us. Monopolists, cheats, frauds, abusers of market power, are not supposed to be tolerated, and the state enforces that; these people are not "free" to do whatever they can get away with. I would charge that mass food producers are operating "against the public interest", use deceptive tactics, and share some liability for the health-care crisis!

It's absurd and contradictory to say, I support all of these restrictions on people's behavior, and then say, but it's really not about that. We may never agree on which policy is best, but you should be honest with yourself about what you believe. With all due respect, you believe in government control, I believe in freedom.

The kind of freedom you espouse is not really economic freedom, it's a form of anarchy, and rather Machiavellian [i.e. "right is might, and justice is the interest of the stronger"]. It's the kind of freedom Hitler would have appreciated.

I believe you share a lot of common ground with the Supremes in their latest decision about corporate funding of politics. "If they want to spend their (corporate) money on politics, why shouldn't they? That's what 'freedom' is all about."

[EconBackbencher]

EconBackbencher, you accuse "Socialists" of being driven solely by ideology, and then you essentially make the case here that, regardless of who is right, individual choice should be the deciding factor. The data is very clear (OECD) and has been demonstrated by those who report on the countries in question. Sweden also has free universities; the reason they aren't overflowing with international students is to do in large part with restrictions on entering, staying in, and leaving the country. Countries like France and Sweden do not market themselves for health care tourism (because people there don't treat it like a luxury), thus they do not attract an international market.

Yes, I believe freedom makes individuals better off than government control. With all due respect, your citation of "Swedish Universities" honestly made me laugh out loud. Thousands of studies have shown that the American public schools monopoly turn out the least qualified, illiterate students in the industrialized world. However, we have the best universities in the entire world. Why? Because we have an open university economy and a closed public school monopoly. Even though almost all universities are subsidized by government, at least students get a choice on where they might go. Not so with our public schools monopoly.

How many Nobel Prizes have been won at Swedish universities? They award them in Stockholm, they should at least be on par with America on a per capita basis.

And yes, I do believe in government control over health care. Not because that is my ideology, but because it works.

Listen, you're not going to shame me in any way by calling me an ideologue. I admit that I find certain things reprehensible. (By the way, I'm not comparing socialized medicine to Stalinism here). Just because something "works," does not make it right. Stalin murdered millions in pursuit of a system that works. I think that murder is wrong, no matter what. Doesn't that make me an ideologue? Even if Stalin was able to create the most efficient health care, railroad, government system in the world, I would object because he did it based on taking the lives of millions of people.

Whenever you have a government takeover of something, some people are going to object. They are not going to like their freedom being taken away from them. They are not going to behave like the bureaucrats want them to behave. After all, human nature is a relatively fixed an unchanging thing. So when people violate the law, the bureaucrats can ignore or stick them with some minor penalties which people will treat as transactions costs, or the government can use force and coercion against them and jail them. So, you can hide behind a policy because it works, or you can confront the facts as they are.

So while the average conservative complains about "government waste", the reality is quite the opposite: not only do government organizations have remarkably low overhead costs, but they have the market power to enforce positive social and economic change. Your steadfast defense of "freedom" reminds me of a British cartoon from around the time of the French Revolution:

In some cases, with public goods, of course government can deliver them more efficiently than the private sector. I'm an ideologue, but I'm not an absolutist. I don't believe insurance is a public good. I'm not a tax protestor, because I believe the benefits of my government exceed its high costs. But it's not an absolute thing.

I find it pretty funny that you would accuse me of being a proponent of the French Revolution, because your assumptions about the way humans are fit quite nicely with the people who influenced the French Revolution, whereas mine do not.

Is it really freedom when you are free to choose between a number of equally unaffordable and unpalatable options?

This is my point exactly. The world has resource constraints, and within those constraints we do the best we can. Competition promotes the use of resources (Labor and capital) efficiently to lower cost, government monopoly does not.

Can you tell me of one scenario where private insurers and providers produced lower costs than public ones (with the exception of the really bad ones, of course)? You have to remember, this may be a monopoly or a monopsony, but there is no profit motive. That's the difference from the private market, and it's the reason they will continue to provide a better model for a service that is far too vital to leave in the hands of overcompensated CEOs.

Honestly, have you even taken a course in microeconomics? There's nothing wrong with a "profit motive," assuming it even exists. The problem is not a "profit motive." The ways companies become more profitable is by lowering their costs by using resources more efficiently. That means that they can charge a lower price than their competitors, and take away market share. There's no incentive for a monopoly to do that.

So, please, before you accuse me and others of being ideologically motivated, think of where you are coming from. All of my information here is empirically rooted, with statistics, case studies, and some basic theory to back it up. On the other hand, your arguments do not seem to have a basis in reality - and as far as I am concerned, you only have the most basic of microeconomic theory standing behind them.

Exactly who made you "The Decider?" Since when do you get to decide who has a basis in reality? Citing a case here, and a study there doesn't make you empirically rooted. The essence of the debate is that there are competing studies and competing cases. With all due respect, for you to say the case is closed, betrays your true ignorance of the enormity of the amount of empirical evidence out there. You don't know me, you don't know what I know and have read.

The reason why I avoid getting into a debate with someone over empirics over such a large topic as health care, is because the amount of studies is so large. There are competing studies which come to different conclusions. If you want to start a thread dealing with the merits of one particular study, be my guest.

I do not dispute the fact that empirical evidence is enormously important in positive economics. It is important to test theory with evidence. But we're not going to settle the issue by citing one study, and countering with another and then discussing the problems or issues with each one.

[EconBackbencher]

whoa. I never objected to that concept. But a choice of regulatory structures is not freedom, by your definition.

It's tons more free than the alternative. I don't believe in absolute freedom, more or less I believe in what Russell Kirk called ordered liberty.

The "consumer" is the subject of vast amounts of "normative" influence through the media, the schools, and the promoted public discourse. This harks back to the basic issue of "rational choice" as the driving force in economics. I don't believe it's importance is as great as you would have it. So, I think your idea, that the public can make their own best decisions for themselves is, in many arenas, dead wrong.

I think this is an excellent point. As it happens, I believe that a purely "rational choice" model is a weakness of modern economics. I think that economists should try to do better, particularly those that like me believe in the free market. However, I don't believe it gives a blank check to those who believe that the government should control everything either. The people in charge of governments have their own biases, vices, incentives, and weaknesses that also lead to them making suboptimal decisions. This is where behavioral economics must progress, in examining government failure as well as continuing to examine market failure.

In fact, choice in food is one of those externalities that we could talk about.

How does choice of food create an externality? Please explain.

Yes. Some freedoms are ceded to the state when you live in a country like ours.

I agree, I just don't think food choice is one of those areas.

The state needs to generally rein in aggressive interests that seek to use personal circumstances and advantages to enrich themselves at the expense of the rest of us. Monopolists, cheats, frauds, abusers of market power, are not supposed to be tolerated, and the state enforces that; these people are not "free" to do whatever they can get away with. I would charge that mass food producers are operating "against the public interest", use deceptive tactics, and share some liability for the health-care crisis!

I don't think it's so clear cut. Who are the monopolists in this arena? Incidentally, no AG (Even particularly litigious ones) has gone after a food company for monopoly to my knowledge. Who are the cheats, frauds, and abusers? What are their crimes? I just don't think we are going to agree on this.

The kind of freedom you espouse is not really economic freedom, it's a form of anarchy, and rather Machiavellian [i.e. "right is might, and justice is the interest of the stronger"]. It's the kind of freedom Hitler would have appreciated.

In what way? Hitler was a vegetarian, after all. He set up government run car companies. I don't see the connection at all.

I'm not an anarchist. I just believe the state should be smaller than it is currently constituted.

I believe you share a lot of common ground with the Supremes in their latest decision about corporate funding of politics. "If they want to spend their (corporate) money on politics, why shouldn't they? That's what 'freedom' is all about."

I don't like all of the implications of it. I don't like the fact that companies can lobby for special benefits from the government. But in an imperfect world, I think it's the best we can do.

[robdashu]

Do you believe our present course in food production is prudent? Based strictly on the actualized [i.e. 'book'] cost of mass production, our current system of mass processing of food so that cooking is avoided by the consumer may look cost-effective to some. There are numerous externalities involved, many in the nature of societal costs not 'paid' by the producer, particularly environmental and health costs.

To achieve these ends, a number of technical boosts have been used. One is breeding of specific strains of crops that are friendly to the productive system (i.e. easier to harvest, not so easily bruised, have longer shelf life, etc.). Sacrifices are made in the area of nutrition, taste, required non-food additives, and other costs are incurred such as packaging and waste disposal.

As I previously mentioned, monoculture - huge swaths of acreage devoted to one crop - is a risky way to run one's food supply, which is critical to survival. Other techniques are supplemental fertilizers, which I believe are subject to diminishing returns when used widely and persistently, and contribute to pollution via runoff [costs not incurred by growers]. Ditto for pesticides - they are in widespread use, and in some cases are required to achieve the level of production achieved in monoculture installations; chemical poisons are also used to improve the "look" of produce - for instance, achieving near 100% pest reduction to avoid leaves that may have been munched by a few bugs. The physical harm to humans from all of these chemicals is pretty poorly documented.

This entire approach to food production assumes that there is no cost to the depletion of land through overgrowing of single crops [or, if it acknowledges such depletion cost, sees it as a cost to the "owner" of the land]. This approach assumes the environment will continue to absorb and detoxify water and air even though we continue to create and emit all sorts of man-made substances - many of them poisonous - into them.

Then you can add in the concomitant health costs from high-blood pressure due to sodium intake, and clogged arteries from unhealthy, but economical fats.

The ConAgras and Nabiscos of the world are rent-seekers that achieve their ends by supplying goods to fulfill a need. The only problem is that it's not the same goods Grandma ate in terms of nutrition and wholesomeness. If the complete costs of the system of food production were allocated to each piece of food on your plate, you might be surprised.

[EconBackbencher]

Frankly, I don't see what any of this has to do with health care. I am almost completely ignorant about the food production process, except for the fact that I know that competitive free enterprise works infinitely better than state owned collective enterprises. At least two of the great famines of the twentieth century were caused by a collectivization of agriculture. Not one was created by competitive free enterprise.

Even when competitive enterprises performed poorly, like in the USA in the 1930's, other competitive enterprises led the way to fill the gap in production.

[EconBackbencher]

I know you're in Canada, but this fascinates me.

The United States has the worst performing public schools in the industrialized world, according to lots of studies. The United States also provides the least amount of freedom to parents and students in choosing which school the student may attend. This despite the fact that the United States spends more money per student than anyone else. Where's all of the outrage? Where are the calls for school reform?

In fact, I think a lot of our health care problems come from the fact that people aren't properly educated. There's probably a pretty high correlation between quality of education and quality of health. Frankly, our education statistics are much worse than our health care statistics, but I see no movement on the education reform front. In fact, I see regression as Obama takes away vouchers from DC students.

[dhero]

Thousands of studies have shown that the American public schools monopoly turn out the least qualified, illiterate students in the industrialized world. However, we have the best universities in the entire world. Why? Because we have an open university economy and a closed public school monopoly. Even though almost all universities are subsidized by government, at least students get a choice on where they might go. Not so with our public schools monopoly.

Ah, well, Canada is exactly the same way; therefore I would argue that something more than simple freedom of choice is at work here. Certainly, Friedman's work and others would suggest that allowing choice (and privatizing) will improve the system, but there is also evidence to suggest that that approach isn't as effective with public goods as it is with private goods.

I would also agree that education reform is needed, but I am unsure as to the exact approach. I think we could both agree that education, like healthcare, is an exceedingly complex discussion - one that is probably beyond the scope of this thread, and very problematic for the purpose of making comparisons.

How many Nobel Prizes have been won at Swedish universities? They award them in Stockholm, they should at least be on par with America on a per capita basis.

Sweden's Nobel Prize rate is about 3x that of the US, per capita. However, this is somewhat irrelevant anyway since the awards are quite political and not considered a good measure of academic achievement

Listen, you're not going to shame me in any way by calling me an ideologue. I admit that I find certain things reprehensible. (By the way, I'm not comparing socialized medicine to Stalinism here). Just because something "works," does not make it right. Stalin murdered millions in pursuit of a system that works. I think that murder is wrong, no matter what. Doesn't that make me an ideologue? Even if Stalin was able to create the most efficient health care, railroad, government system in the world, I would object because he did it based on taking the lives of millions of people....So, you can hide behind a policy because it works, or you can confront the facts as they are.

I apologize if I came off as trying to label you in that way. I merely said that the evidence we had stands in favour of a public health system, and that you would need some form of contrary evidence to have a sensible reason to claim otherwise. I would certainly object to a public health system as well, if Stalinism (and Hitlerism, Maoism, and all the other 'isms') were required to make it - however, they are not! For myself, I don't see how nationalizing what is, on the basic level, essentially a homogeneous good can even be mentioned in passing reference to the sorts of policies implemented and atrocities committed by the likes of Stalin. It's not even that the end justifies the means, I just don't see how the means are objectionable in the first place.

By the way, your last sentence there is quite funny on its own

I find it pretty funny that you would accuse me of being a proponent of the French Revolution, because your assumptions about the way humans are fit quite nicely with the people who influenced the French Revolution, whereas mine do not.

I wasn't insinuating that you are a proponent of the Revolution - my point was the cartoon itself, where the rhetorical concept of 'Liberty' is presented as being so important as to surpass all other basic needs.

EDIT: The ideals of the French Revolution are essentially the same as those of the American Revolution (the same 'philosophes' inspired both). Considering that individual freedom was one of the great principles, and that Adam Smith is considered one of the defining voices of the period, I'm surprised that you would say you don't agree with them.

This is my point exactly. The world has resource constraints, and within those constraints we do the best we can. Competition promotes the use of resources (Labor and capital) efficiently to lower cost, government monopoly does not.

To an extent. Certainly, in industries where products are differentiated and competition is fierce (e.g. Consumer electronics, which I would never nationalize in a million years) that reasoning holds true. However, in certain markets where products are homogeneous (such as basic insurance), I think that great economies of scale can be produced with relatively few resources when one government entity takes the place of multiple private organizations who offer the exact same product at the exact same price (such as basic insurance). I would also argue that competition is not the only means to efficiency - indeed, with Crown Corporations (as they are called here) always in the public spotlight and accountable to the taxpayers, there is a great incentive to perform. Besides, we both know that good competition (which would allow consumers, workers, and owners to benefit) is a rather uncommon phenomenon and thus should not be relied upon blindly to increase general welfare.

Honestly, have you even taken a course in microeconomics? There's nothing wrong with a "profit motive," assuming it even exists. The problem is not a "profit motive." The ways companies become more profitable is by lowering their costs by using resources more efficiently. That means that they can charge a lower price than their competitors, and take away market share. There's no incentive for a monopoly to do that.

I'm sorry, you obviously don't have a lot of experience with good public organizations, as you seem to think they are operating in the same way a conventional monopoly would. Of course, they face the same demand and marginal revenue curve, but their goal is not simply to maximize profit; as you mention, when a conventional company lowers costs, they can either reinvest the money saved, take it as profit, or lower prices. With a public entity, 'profit' is not allowed - therefore for the most part money is either kept within the organization to improve service, or used to lower prices for consumers. Thus, if a public and a private corporation cut costs equally well, consumers will see more benefit from the public entity.

Exactly who made you "The Decider?" Since when do you get to decide who has a basis in reality? Citing a case here, and a study there doesn't make you empirically rooted. The essence of the debate is that there are competing studies and competing cases. With all due respect, for you to say the case is closed, betrays your true ignorance of the enormity of the amount of empirical evidence out there. You don't know me, you don't know what I know and have read.

Again, my apologies, my last post came off a little rude there. I am sure that there is competing evidence, but I have neither seen it nor have you presented any. With the table I linked earlier, for example; while it is true that there may exist a fallacy of composition in generalizing the Swedish health model to the whole world, I don't see any reason why there couldn't be an open economy where every country has a public system (as most developed ones do already) and may have a private one if they wish to. That way costs are minimized for most procedures domestically, but people may still travel for private care if need be. Even though it is very hypothetical, I would certainly welcome some form of evidence to the contrary.

[EconBackbencher]

Ah, well, Canada is exactly the same way; therefore I would argue that something more than simple freedom of choice is at work here. Certainly, Friedman's work and others would suggest that allowing choice (and privatizing) will improve the system, but there is also evidence to suggest that that approach isn't as effective with public goods as it is with private goods.

Education is a almost entirely a private good. It may have a few externalities (the movie Idiocracy comes to mind), but most of the benefits of education are reaped by the educated person. Anyway, I don't have a particular objection to subsidizing education, I just think the parent should have more control over where to send his child to school. There are many studies that show that students in Washington, DC benefited from vouchers; in those systems that have free entry and exit, students who go to government schools also benefit because competition improves the government schools.

I apologize if I came off as trying to label you in that way. I merely said that the evidence we had stands in favour of a public health system, and that you would need some form of contrary evidence to have a sensible reason to claim otherwise. I would certainly object to a public health system as well, if Stalinism (and Hitlerism, Maoism, and all the other 'isms') were required to make it - however, they are not! For myself, I don't see how nationalizing what is, on the basic level, essentially a homogeneous good can even be mentioned in passing reference to the sorts of policies implemented and atrocities committed by the likes of Stalin. It's not even that the end justifies the means, I just don't see how the means are objectionable in the first place.

Nationalized health care is not Stalinism, not even really comparable, but I couldn't think of any other way to illustrate the point that none of us is purely utilitarian. That's why we evolved with a prefrontal cortex, as a check against pure reason.

I wasn't insinuating that you are a proponent of the Revolution - my point was the cartoon itself, where the rhetorical concept of 'Liberty' is presented as being so important as to surpass all other basic needs.

EDIT: The ideals of the French Revolution are essentially the same as those of the American Revolution (the same 'philosophes' inspired both). Considering that individual freedom was one of the great principles, and that Adam Smith is considered one of the defining voices of the period, I'm surprised that you would say you don't agree with them.

I accept Adam Smith's view of the world, for the most part. I don't accept Rosseau's. They have two entirely different understandings of what liberty is. Adam Smith largely believed in negative liberties (the state does not have the power to enslave you) and Rosseau believed in positive liberty (the state has a responsibility to provide you with certain things). Smith believed that self-interest was an integral part of human nature, and that the role of the state was to foster a system where self-interest could be guided toward obtaining the best social outcomes. Rosseau didn't believe in a fixed or unchanging human nature, he believed that man could use reason to guide his activity to produce optimal social outcomes.

In short, in the French Revolution, Adam Smith was a complete non-factor. In the American Revolution, the Burkean assumptions Adam Smith had about human nature were a significant factor, but so was the thinking of Thomas Paine who was very much like the French Revolutionaries in his thinking. It happens that the Burkean view of human nature prevailed post Revolutionary War in America.

To an extent. Certainly, in industries where products are differentiated and competition is fierce (e.g. Consumer electronics, which I would never nationalize in a million years) that reasoning holds true. However, in certain markets where products are homogeneous (such as basic insurance), I think that great economies of scale can be produced with relatively few resources when one government entity takes the place of multiple private organizations who offer the exact same product at the exact same price (such as basic insurance). I would also argue that competition is not the only means to efficiency - indeed, with Crown Corporations (as they are called here) always in the public spotlight and accountable to the taxpayers, there is a great incentive to perform. Besides, we both know that good competition (which would allow consumers, workers, and owners to benefit) is a rather uncommon phenomenon and thus should not be relied upon blindly to increase general welfare.

Health insurance profit makes up about 0.2% of the entire health care economy in the United States. And all of those bonuses and executive compensation, they are much less than that. We could take all of the profits and bonuses of the insurance industry and basically run the entire health care system for less than a day. Greedy insurance companies are not the reason why health care sucks in America (if it does indeed suck).

Doctors say that one reason why health care is so expensive is because of the plaintiff's bar: the cost of defensive medicine is alleged to be about $200 billion annually. That's about 10% of the health care economy. Even if it is much less than that, half let's say, that's a significant cost, much more than insurance company profits.

I'm sorry, you obviously don't have a lot of experience with good public organizations, as you seem to think they are operating in the same way a conventional monopoly would. Of course, they face the same demand and marginal revenue curve, but their goal is not simply to maximize profit; as you mention, when a conventional company lowers costs, they can either reinvest the money saved, take it as profit, or lower prices. With a public entity, 'profit' is not allowed - therefore for the most part money is either kept within the organization to improve service, or used to lower prices for consumers. Thus, if a public and a private corporation cut costs equally well, consumers will see more benefit from the public entity.

One of the most important things to remember in economics is that incentives matter. A government entity has no incentive to innovate to lower costs. Private business, when constrained by competition, do. It would be nice if the taxpayers would be able to demand that politicians work to improve public services, but this model of political economy is breaking down before our very eyes for a number or reasons. One reason is that government payrolls are growing: government unions have become a large voting block in many states, and even though government pensions are bankrupting many states and municipalities and disrupting government services, politicians are afraid to make cuts because the government employees have lots of power. When you combine government payrolls and people dependent on government for assistance, you've got a huge voting block that has a great incentive to maintain the status quo. So even if the taxpayers who aren't dependent on government for their job or transfer payments are unhappy with government, they don't have enough votes to kick the bums out. I don't know if this is happening in Canada, but it is definitely happening in many states.

So, we've got a sizable voting block that has a stake in dysfunctional government; a government that does not innovate, improve service, but instead grows and steals more of the bounty of the private sector. And that is what many people here are afraid will happen to health care.

[Bhanu]

Hai............
Good morning........
Welcome to this forum.......
half of America's doctors retire post-Obama care? Has anyone plugged those projections into a CBO analysis?
Have a nice day..........
Thank you for sharing with us.......
regards ,
phe9oxis.
http://www.guidebuddha.com