A couple of weeks ago, here at the University of Rochester, two fine student organizations—the History Council and the Finance/Economics Council—joined forces to sponsor a debate on the topic “Is Health Care a Right?”. The disputants were myself and history professor Ted Brown, who graciously agreed to speak first at my request.
Over the course of the evening, I proposed a variety of mutually contradictory health care policies; my intent was not to endorse any one of them, but to demonstrate that all of them were preferable to Professor Brown’s pet proposals. I cribbed some important ideas from David Goldhill’s Atlantic Monthly article, and some important ideas and facts from the always insdispensable Bill Easterly. The format did not lend itself to citations or hyperlinks, but I’m glad to make amends here.
We got the whole thing on video, and I’m posting it all here. (If you prefer to read text, I’ve already blogged many of my thoughts on this matter.) The final segment shows the handout that Professor Brown distributed and referred to during his initial remarks.
Professor Brown’s opening (length 23:11):
My response. (length 19:34):
His re-response (length 10:14):
My re-re-respnse (length 2:29):
Question period (length 30:17):
I also have a brief video of the flyer that Professor Brown distributed during his opening remarks:
Brown is an embarrassment to Rochester. As George Stigler famously put it; ‘There is nothing polite that can be said about such analysis’.
The look on Steven Landsburg’s face throughout the question and answer session made me laugh.
Anyway, I find Landsburg’s idea that we reimburse people with catastrophic diagnoses interesting and worthwhile to consider. I just wonder how practical it would be. For example, some cancers are more aggressive than others. Some kill you in 3 months. When caught early, some cancers can be defeated entirely, or at least for many many years. Others fall somewhere in the middle. I suppose a doctor would be capable of guessing how aggressive or how long your cancer has been around, but what if he’s wrong? I guess one simple solution would be for the government to actually “keep” the money instead of literally cutting someone with cancer a check. For example, upon diagnose of colon cancer, you would have up to $X million to spend. Since you know you only have up to $6 million to spend, you would be careful in case it was the more aggressive type that would require more care.
A few things….
Someone needs to inform Professor Brown that a good is a public goods if it is non-excludable and non-rivalrous, and not whether or not it is provided by the government. Schooling is not a public good since it doesn’t have the characteristics of a public good. He will need a new phrase for something he thinks the government should tax and then offer.
I found Professor Brown’s comment about how if only his guys ran government than things would be rosy rather telling of his entire position. It’s the position of, “Throw the bums out, and put the angels in charge of organizing society.”
I disagree completely. The true workhorses in America are not politicians, but businessmen who provide high quality products at low costs. The main reason commercial activity produces unattractive results comes from government regulations and meddling. And the fact that there are no free lunches.
It’s a really bad idea to push people out of the profession who have economic incentives, as he advocates in the last question. The best way to motivate talented and educated people within a competitive marketplace is monetary gain. Government motivations are far more dangerous.
I think the subject rapidly changed in this discussion.
“Rights” are effectively applied to behavior: a right to free speech, assembly, not testify against oneself, yell “fire” in a crowded theater (or not), the behavior of police and prosecutors, etc.
Proclaiming a general human “right” to a good, service, or physical condition that must be provided using economic resources and organization accomplishes nothing.
Imagine everyone being given a “right” to a three-room apartment, 50-mpg car, pony, or unicorn — passing legislation creating the “right” does nothing at all, zip, to provide it. If the thing can’t be provided generally at a plausible economic cost, then after creating the “right” to it, it remains unprovided. The whole exercise is wishful thinking and posing.
Monty Python put this well.
OTOH, if the item can be provided economically, then it will be and there is no need to create a “right” to it. This is why there is no legal “right” to food and clothing, even though they are far more important than medical care to 98% of people 98% of the time — they are already provided amply at low cost so there is no need to go through a political exercise of creating a “right” to them.
When those on the left seek to create a “right” to something they are generally conflating messy thinking along the lines of: “rights are provided by the government, rights are good (such as ‘civil rights’), so if we just create a right to this good thing then it will be provided by the government and things will be good, better than now. More rights are better!”. This is very hard to argue with in principle, in my experience, because it is a belief system, and quite amorphous. But one can point to real-world examples showing how it falls apart.
E.g., the closest example to the proposed right to health care is the actual right in many state constitutions to “high quality public education”. And what has been the result? Ha! In New York, only a ton of litigation plus school conditions like these, at a cost now of $20,000 per year per student. Why? Because, e.g., among other reasons, the “right” to a quality eduction doesn’t trump collective bargaining agreements with government unions that keep even the most incompetent on the payroll. (Yes, that Professor citing public schools as the model to follow is bizarre.)
The left has a dream of creating a “right” to health care that would result in top quality govt-provided health care for all, just like fire protection! (BTW, fire protection by the govt isn’t a “right”. It developed piecemeal across the US sporadically over the late 19th century, as a municipal service, as voters decided they wanted it — not in response to legal “rights”.)
But the same reality that exists in public schools exists for health care. What are the big structural defects in the health care system today? (1) The employment tie plus tax deduction for employers; and (2) the McCarran-Ferguson Act, 1945, which (a) allows state regulators to bar interstate purchases of insurance, enabling state politicians to create local monopolies of favored insurers, and (b) prohibits federal anti-trust actions against those local monopolies.
What entirely predictably results when you let politicians fragment the market to block competition to local providers, while also blocking anti-trust regulation of local providers?
Well, in New York, just two insurers, GHI and Empire Blue Cross, have 47% of the market; in New Jersey, just one, Horizon Blue Cross and Blue Shield, has 43%; and in Connecticut, Wellpoint by itself has 55%. Worse, with no anti-trust enforcement the politicians, these favored insurers and unions set up local monopolistic “iron triangles” in places like NY that mandate all kinds of excees coverage jobs for unions of health workers, extra premium revenue for the insurers, and payof^h^h, er, brib^h^h, er, generous contributions to the politicians.
The unions are big supporters of this corporatism — the employer tie and iron triangles — because they use regulation of the big, government-favored corporations to their own ends. (See: GM & UAW.)
Now let’s say Democrats enact health care as a “right”. Are they then going to dismantle these health care “iron triangles” that are among their most powerful constituent groups? Nope — not any more than their current health plan does, which is “not at all”, and not any more that the “right” to a quality public education has improved inner city school systems.
So much for the dream. (The bipartisan Wyden-Bennett health care reform would have addressed the real problems, but Baucus killed that PDQ to protect his iron triangle constituents.)
Yet now the subject has changed from “health care as a right” to “what’s the best method to provide health care?”, which is what most of the “rightsers” really have in mind, thinking govt single-payer provision is the answer — and which is the course this debate quickly took.
But sticking to the question of health care as a “right”, we’d have stopped at the fourth paragraph of this comment — creating a “right” to enjoy a product, service or physical condition does exactly zippo nada to provide it. While if you have a good cost-efficient way to provide it, there’s unlikely to be any disscussion at all of need to create a “right” to it.
“Here, I’ve got an idea: Suppose we agree that Stan can’t actually have babies, not having a womb — which is nobody’s fault, not even the Romans’ — but that he has the *right* to have babies…”
I think the debate about “right” is missing the point. Both sides seem to agree that there is some form of “right” (in the non-economic sense) to health care. Or perhaps we could say both sides agree that it’s in the public interest for health care to be provided. The debate seems to be about how much, and who should pay for what parts of it by what mechanism. I think that’s a much more interesting debate. Though perhaps it doesn’t make for such good theater :)
Thanks for posting this video Steven. Very informative. Had a few “aha” moments wihch is always thrilling. If you have any other video debates available would be great if you post them too (I think I’ve seen one of you on fox news once debating trade barriers).
Jim Glass: fanastic post!
I agree with Alan that labeling health care a right is missing the point. Jim is correct that it is not useful to call any product or commodity a right. The real question that we need to answer is, “what level of health care provided to people minimizes the sum of health care costs and lost value”, where value here means wages or an equivalent measure of people’s worth.
At one extreme we can argue that there should be no health insurance of any form – everyone should pay their health care expenses as they go. Unfortunately, this would become a form of Russian roulette, where randomly chosen people would either die or be bankrupted by health care expenses (as some people without insurance are today).
At the other extreme, we could provide unlimited free health care to everyone. Of course, then nobody would have an incentive to take any preventative measures, as the costs of ill health would be borne by taxpayers.
I think that neither of these options minimizes the total cost of health care. The former minimizes insurance costs, but maximizes the impact of poor health on income. The latter reverses the equation. Somewhere in the middle, I think it makes sense to ensure that everyone has (a) access to some form of preventative care, as preventative care greatly lessens the cost of disease; and (b) some form of catastrophic insurance so that people aren’t randomly bankrupted. So, how do we pay to provide this to everyone?
Steven,
Your frustration with Ted Brown was obvious during the Q&A. Every time I argue with someone on economics, particularly health care, I feel the same frustration:
*Why if people distrust politicians do they want to give MORE power to politicians? As with everyone I’ve ever asked this question, Ted leaves this questions unanswered or gives the absurd answer of getting better politicians. Clearly he is unaware that western politics has been about exactly that (getting better politicians) for the last 2500 years, yet after all that time the best we can come up with is what we’ve got now.
*Why don’t people understand that you CANNOT walk away from a public option if you are not satisfied with it? As with public education, if public schools fail miserably, like they have here in Baltimore, you still HAVE to pay for it; if you opt to send your kid to a private school, you pay twice once in taxes for a miserably failing system, then again for the private school.
*Why does Ted Brown not understand that not having health insurance does NOT lock you out of the health care, but the lack of competition and over insurance of the rich (of which I am one) is what locks people out? Why do people think you can suspend the laws of economics in regards to certain pet products, like health care? No one seriously entertains building an engine ignoring the laws of thermodynamics because the engineer found thermodynamics to be an inconvenient obstacle to building the engine he wants.
I get the feeling that people actively and purposely don’t understand economics because then they’d have to admit that a central authority can’t possibly aggregate enough knowledge and know-how to provide the best economy ever. Like Ted Brown, when people envision these grand governmental plans, they envision themselves as the administrators of these plans (Ted’s flippant response that he’d get better politicians!), even though they can’t possibly believe that this reflects reality AT ALL. People like Ted see themselves as benevolent know it alls for all us idiots that definitely are not spending our own money, that we earn, on the correct things in life. Even when he MUST be aware that our spending our own money on our own lives is the best way for money to be spent.
I praise your restraint for not calling him a fool to his face. Although, I’m not sure you didn’t because I didn’t listen to all the Q&A.
Lastly, I’m surprised that you didn’t mention that buying health care is a universally recognized right in the US, as is the right to buy food, housing, clothing, or almost anything else. What Ted is arguing is that the government has the right to take my money and spend it on someone else in ways they might not want (the last point you made), which clearly contradicts the spirit and the letter of the US Constitution, as the US Constitution quite explicitly states that the federal government has ONLY those specific powers enumerated in the constitution.
Regards,
Ken
One last point: Ted is VERY VERY VERY wrong in saying that he has no vote on economic issues. He seems to be completely unaware that buying something IS casting a vote in favor of that that something, while not buying something is a vote cast not in favor of that something. Market transactions taken in aggregate reflect our preference to a far better degree and far more democratically than anything else I can think of, especially the passage of a senate health care bill when polls show that 61% of Americans oppose the bill.
If any good or service is a “right”, then isn’t it fair to say that every person is entitled to the labor or produce of people engaged in that industry?
For instance, if health care is a right, we are entitled to the skill and labor of the doctor and property of the hospital? Somehow, they “owe” us their abilities, tools, and time.
If food is a right, are we entitled to the produce of the farmer, the result of his labor, investment, and skill?
Personally, I would hate for anyone to believe they are entitled (or deserve) my time, labor, or production.
If health care is not a right, I see two main arguments for justifying government provision of it: morality and cost.
Both of these arguments were addressed by Landsburg in the debate. If we feel morally obliged to help the poor, shouldn’t we help them in the way that THEY, not us, deem best? And Landsburg brought up many arguments for why government should be less, not more, involved in health care and health insurance to assure lower costs.
I think that in a discussion like this the right answers often rest a grey area. No one is completely right or wrong.
I find it interesting that the positions of both men are not that far apart. I believe that the right necessary for a good healthcare system already exists: The right to choose. There is really no need to invent a new right just the understanding that a healthy populous is desirable much the same way an educated mass is preferred will suffice.
Professor Landsburg advocates for this in supporting a private system that greatly expands choice but wants the government out of it. On the other hand, Professor Brown wants a system were the government provides an alternative to traditional health insurance companies.
Landsburg’s suggestion is a bit faulty because government intervention is needed to prevent unfair practices by the companies. Having an unregulated insurance market place will lead us right back to the status quo ante. The truth is that such a system will bring about monopolies/oligopolies and will become nearly antithetical to the idea of choice. Also, the idea of having a voucher of sought will need to be regulated otherwise there is a risk of securitization by the markets (e.g. life insurance policies are traded in the markets). I am trying to say that government will need to be involved in some way otherwise healthcare will become yet another ill, among many, of capitalism.
I see Professor Brown’s position of having a public option as a way of ensuring healthcare for all flawed in some ways. If the public insurance option is offered in a similar fashion as Medicare then a problem with choice will arise. Most people will want the public option because, as Landsburg will say, “they never say no.” This will essentially eliminate the private insurers and make the government a monopoly. This will also overburden the system because at a 5% overhead rate, Medicare has all these cost issues. With the influx of all the extra money from the healthcare industry also comes an influx of 46 million new bodies to insure. There will be an obvious increase in overhead as well as direct costs and in the end the system will go broke as it is destined to in its current state.
It is almost obscene to think of the healthcare of an individual as purely revenues and expenses or assets and liabilities on financial statements. I propose adopting a non profit model that adopts the ideas of both Professors, a system that will reward companies for excellence of care that is judged by a predefined criterion instead of an ability to turn a profit. Where the criteria is not simply how many times you said “yes” or “no” instead, how well patients fair in light of the decisions that the company takes is what matters. This kind of system is employed in many developed countries around the world and many that offer universal coverage keep profits away from the insurance business. This, of course, sounds easier that it will be to execute but I think it is one way to institute an equitable healthcare system. The government’s role in this model would be to ensure that the right to choose is maintained and that people are not excluded from coverage.
Other countries have universal health care systems. They (Canada,Germany, France, and others) pay less than we pay. I think we should simply copy one of theirs.
Tom, it is hard to emulate another country’s system because we are talking about apples and oranges. Take Canada for instance. Our population is 10 times that of theirs and the system of government in both countries evolved differently. The Canadian model will run into many obstacles here in the States for many reasons. Any solution would have to be unique, in some way, to the US.
Tom, if that’s the type of system you like, move to Canada, France or wherever. We live in a free country, or one that was founded on freedom, which is slowly being eroded away by losers who think other people should pay for their stuff. If you think other countries are better than the US, man up and vote with your feet. Otherwise recognize that it is wrong to force people to pay for your crap, especially at the barrel of a gun. If you don’t think Obamacare, SS, Medicare is forced at the barrel of a gun, try not paying your taxes and flipping the bird to the tax man. Men with guns WILL show up at your door. Also, read the Constitution (9th and 10th amendment specifically).
And just in case any of you think that private insurers are unfair, but not the government (e.g., Charles “the fool”), take a look at this:
http://blog.heritage.org/2009/10/06/medicare-largest-denier-of-health-care-claims/
The government is AT LEAST as corrupt and greedy as private companies. The only difference is that it’s legal for the government to be corrupt and taxes will always be raised to pay for that corruption.
Regards,
Ken
Charles Uzoanya
Yes, it’s difficult to copy another country’s system. They do provide for the health care of all their people. Our country could do the same. After all, the USA is the land of the free and the home of the brave.
Currently our health care insurance industry is standing between doctor and patient. I think it is a national scandal. The insurance industry has more access to my medical records than I do.
Tom
“They do provide for the health care of all their people. Our country could do the same. After all, the USA is the land of the free and the home of the brave.”
Huh? How does your final sentence there follow from the prior ones? It not only doesn’t follow, it stands in contradiction.
Yes: The United States is “the land of the free.” Or at least it WAS. That’s why the Tom Lucas of 1910 was not made to cede his freedom to pay for others’ health care. He was not forced to cede his freedom in the name of “insurance” mandates. So why is it OK for us to do that to the Tom Lucas of 2010?
There are a lot of disheartening aspects in the whole health-care debate, but this constant refrain about “other countries” is right near the top. It reveals how far gone the unique American idea is now. Most of America’s own citizens can’t grasp, on an intuitive level, how and why America is different.
I can guarantee you that the Tom Lucas of 1910 didn’t sit around lamenting that the USA was different from everywhere else. In fact, there’s a good chance the Tom Lucas of 1910 arrived here in a boat precisely BECAUSE he knew it was unlike anyplace else. He understood why it was different, he knew it was meant to be that way, and he celebrated that fact.
I’m talking about “NOW” 2010. We live “in the land of the free and the home of the brave”. Right now we have about 50 million men, women and children without adequate health care. I’m sure many of them are Veterans and their families. I think this huge disparity is linked to our greedy health insurance industry.
I compare the USA health care with other systems, because to compare is to be logical. That’s why we have words like big, bigger and biggest. Health care delivery is better in other countries. I want ours to be BEST.
You expressed concern about “ceding freedom” by paying taxes for others’ health care. So? What about paying taxes to subsidize corporate America? The US Constitution was created on September 17, 1787. Since then, “We the People” have subsidized many industries … cotton, slavery, tobacco, auto, steel, farming, and so on. Surly, any subsidy to health care would be less than paid any one of those big industries. And Health Care Reform is supposed to reduce health care costs. Why not subsidize health care for the disadvantaged?
I think the measure of a country is how well it treats its most disadvantaged.
Tom
You are welcome to advocate government-run health care, subsidies, mandates, etc., all you want. Go for it. You may have any number of strong arguments in that regard. The point is simply that you can’t use “land of the free” to back up your point. It’s not just irrelevant to your point, it’s explicitly contradictory.
When you threaten me with force to demand I buy insurance, “freedom” is not one of the operative words involved. You have plenty of other operative words you can choose from if you’d like: “fairness,” “equality,” “social justice.” You just don’t get to use “freedom.” It’s the opposite of what you’re advocating.
This is exactly what I meant about Americans no longer grasping these concepts on an intuitive level. You brandish the word “freedom” even as you’re destroying the real thing, because you don’t actually understand what it is.
BELOW, I HAVE EDITED OUT MY REFERENCES TO “FREEDOM.” BUT, I ADD HERE…How do you deal with the “freedom” denied people forced to pay taxes to subsidize any industry? I’m referring to the old adage: “Whose Ox is gored?”
I’m talking about “NOW” 2010. We live “in the land of the free and the home of the brave”. Right now we have about 50 million men, women and children without adequate health care. I’m sure many of them are Veterans and their families. I think this huge disparity is linked to our greedy health insurance industry.
I compare the USA health care with other systems, because to compare is to be logical. That’s why we have words like big, bigger and biggest. Health care delivery is better in other countries. I want ours to be BEST.
You expressed concern about “ceding freedom” by paying taxes for others’ health care. So? What about paying taxes to subsidize corporate America? The US Constitution was created on September 17, 1787. Since then, “We the People” have subsidized many industries … cotton, slavery, tobacco, auto, steel, farming, and so on. Surly, any subsidy to health care would be less than paid any one of those big industries. And Health Care Reform is supposed to reduce health care costs. Why not subsidize health care for the disadvantaged?
I think the measure of a country is how well it treats its most disadvantaged.
Tom
I would like to add to this discussion a portion of a letter I wrote to “The Virginian-Pilot” on September 1, 2009. Part of the discussion concerned the number of “uninsured” individuals in America and who was going to pay for “healthcare” in the future.
According to a Current Population Survey of about 50,000 households performed by the Bureau of Labor Statistics, there were 45.7 million uninsured people in the United States in 2007. Advocates for expanding taxpayer-subsidized health insurance, and their allies in the media, repeat this 46 million number incessantly. This causes many to jump to the conclusion that the government must help 46 million folks “buy” health insurance subsidized by taxpayers. While visiting numerous sites on the Internet, I discovered a comprehensive breakdown by Mr. Keith Hennessey, former assistant to President George W. Bush on economic policy and Director of the U.S. National Economic Council from 2007-2009. I extracted pertinent portions of an article on Mr. Hennessey’s web site dated April 9, 2009. The article was titled, “How many uninsured people need additional help from taxpayers?” I have included this extracted information below.
“•Of the 45.7 million, 6.4 million are the Medicaid undercount. These are people who are on one of two government health insurance programs, Medicaid or S-CHIP, but mistakenly (intentionally or not) tell the Census taker that they are uninsured. There is disagreement about the size of the Medicaid undercount. This figure is based on a 2005 analysis from the Department of Health and Human Services.
•Another 4.3 million are eligible for free or heavily subsidized government health insurance (again, either Medicaid or S-CHIP), but have not signed up. While these people are not pre-enrolled in a health insurance program and are therefore counted as uninsured, if they were to go to an emergency room (or a free clinic), they would be automatically enrolled in that program by the provider after receiving medical care. There’s an interesting philosophical question that I will skip about whether they are, in fact, uninsured, if technically they are protected from risk.
•Another 9.3 million are non-citizens. I cannot break that down into documented vs. undocumented.
•Another 10.1 million do not fit into any of the above categories, and they have incomes more than 3X the poverty level. For a single person that means their income exceeded $30,600 in 2007, when the median income for a single male was $33,200 and for a female, $21,000. For a family of four, if your income was more than 3X the poverty level in 2007, you had $62,000 of income or more, and you were above the national median.
•Of the remaining 15.6 million uninsured, 5 million are adults between ages 18 and 34 and without kids.
•The remaining 10.6 million do not fit into any of the above categories, so they are: U.S. citizens, with income below 300% of poverty, not on or eligible for a taxpayer-subsidized health insurance program, and not a childless adult between age 18 and 34.”
You are correct that health-care reform will not save money, and there is a great need for a new plan. But, you don’t provide any numbers to show the enormity or the gravity of the situation. The correct “myth” and “truth” are that no one knows neither how much “free” health care will actually cost nor the damage this health care will inflict on the U.S. economy.
I would like to offer a portion of an article written in August 2009 by Mr. Pat Buchanan to shed some light on the magnitude and possible consequences of this “myth”.
“Democrats call Medicare the model of government-run universal health care. But Medicare is a system whereby 140 million working Americans pay 2.9% of all wages and salaries into a fund to pay for health care for 42 million mostly older Americans. And Medicare is already going bust.
If Obamacare is passed, the cost of health care for today’s 47 million uninsured will also land on those 140 million. And if President Obama puts 12 million to 20 million illegal aliens on a “path to citizenship,” as he promises, they, too, will have their health care provided by taxpayers. (My note: Mr. Buchanan, too, uses the incorrect 47 million uninsured number.)
Here is the crusher. The Census Bureau projects that, by 2050, the U.S. population will explode to 435 million. As most of these folks will be immigrants, their children, and their grandchildren, the cost of their health care would also have to be largely born by middle-class and wealthy taxpayers.
Now factor this in. In 2000, the average American male in a population of 300 million lived to 74; the average female to 80. But in 2050, the average male in a population of 435 million Americans will live to 80 and the average female to 86. And, according to U.N. figures, 21% of the U.S. population in 2050, some 91 million Americans, will be over 65, and 7.6%, or 33 million Americans, will be over 80 — and consuming health care in ever-increasing measures.
Now if a primary purpose of Obamacare is to “bend the curve” of soaring health care costs, and half of those costs are incurred in the last six months of life, and the number of seniors will grow by scores of millions, how do you cut costs without rationing care?
And how do you ration care without denying millions of elderly and aged the prescriptions, procedures, and operations they need to stay alive?
Consider two beloved Americans: Ted Kennedy and Ronald Reagan.
Since he was diagnosed with brain cancer more than a year ago, Sen. Kennedy has had excellent care, including surgery and chemotherapy, which have kept him alive and, until very recently, active.
For a decade, President Reagan, because of round-the-clock care, lived with an Alzheimer’s that had robbed him of his memory and left him unable to recognize his own family and close friends.
In the future, will a man of Kennedy’s age, with brain cancer but without the means of offsetting his own health care costs, be kept alive, operated on, given chemotherapy — by a government obsessed with cutting health care costs?
Will a bureaucracy desperate to cut costs keep alive for years the tens of thousands of destitute 80- and 90-year-old patients with Alzheimer’s, as was done with Ronald Reagan?
Almost a third of all unborn babies in America have their lives terminated each year with the consent of their mothers. Fifty million since Roe vs. Wade have never seen the light of day. For many, the quality of life now supersedes in value the sanctity of life. That is who we are.
Between 2012 and 2030, 74 million baby boomers will retire, cease to be the major contributors to Medicare, and become the major drain on Medicare. How long will an overtaxed labor force in a de-Christianized America be willing to pay the bill to keep all those aging boomers alive?”
I have nothing more to add at this time.
I don’t suppose my opinions are novel, but they do seem in conflict with some of the ideas brought up so far on this discussion.
Josh W Said:
“It’s a really bad idea to push people out of the profession who have economic incentives”
But what economic incentive motivates the Insurance industry to sell to as many people as possible and have their product used as often as possible? A lawyer makes more money the more a person uses his service. A factory, more when demand rises. But healthcare is just the opposite. Imagine if Mattel made larger profits when less barbies are sold, what would be their incentive to offer a quality product?
Jim Glass said:
“Proclaiming a general human “right” to a good, service, or physical condition that must be provided using economic resources and organization accomplishes nothing.”
And I suspect he would feel differently if he were accused of a crime by the state funded lawyers who have nearly unlimited resources to prosecute him and great economic incentive to get a conviction. And since a service cannot be a “right” they tell him he’s on his own.
He goes on to say:
“OTOH, if the item can be provided economically, then it will be and there is no need to create a “right” to it.”
And it seems as if holders of this view are forgetting the golden rule of “there are no free lunches”. People without insurance are going to get sick and injured, that is a constant. Is the most cost effective way of dealing with this constant the status quo; they wait till they can wait anymore and then go to the ER and get taxpayer funded organ transplants and funerals? Or do we spend a fraction more, and provide a multiple of that level of care.
The taxpayer pays about $1.40 for every NYC subway ride. Would that city be better off without it then? The alternative would be adding 160 lanes of traffice to the streets, bridges, etc. or expanding the bus system and adding 10-30. The benefits of this program far outweigh the cost of crippling the commerce of the city.
Taxes to pay for healthcare represent an external cost. But I think the gains in productuctivity from releasing people from the healthcare tether to firm emplyment would more than offset it. People dependent on a job for healthcare are less mobile and more likely underutilized.
Ken answers some criticism of the status quo with a common sentiment these days:
“Tom, if that’s the type of system you like, move to Canada, France or wherever.”
I suspect that every time Ken decides the furniture in his living room is outdated he moves to a new house. It has the same feel to it as something I heard my brother say over the holidays, “We are a constitutionally limited democracy, we vote people into office to protect the way things were, not to make things the way we want them to be.”
There are no free lunches. When your neighbor’s kid gets sick do you want him to hold out as long as he can before costing you a $500 trip to the ER as well as the costs to treat the classmates he infected? Or would you rather pony up the $60 for his office visit and a $4 bottle of pink-stuff? Or are you all still upset that’s it’s illegal to just let him die?
Benkyou Burito,
My comment was not about the health insurance industry, but doctors and professionals. It was specific to a comment Professor Brown made about not caring if people leave the health field because the economic incentives were no longer there.
Josh W.-
You’re right, I was addressing your statement in the wrong context. But I still think my criticism is valid.
Brown is saying that a plan that limits payments will reduce incentives to practice healthcare. And more dramatically that he is okay with doctors leaving the field because of it. I would restate the position by saying that the number of healthcare providers is presently artificially high.
I would say that the current system of tax subsidized employer provided healthcare has created an artificially large number of healthcare dollars into the hands of the working majority. Like all market interference, subsidizing wages leads to too much of it and since these are healthcare dollars, it leads to too much healthcare being produced.
The subsidy, in the form of a unique and unprecedented tax exclusion on employer provided insurance has driven up the prices charged to the point that the growing minority of Americans who do not have employer provided insurance could never afford medical care. And at these inflated prices, of course, more people have entered the field.
This is simple logic and S/D curves. So long as you have more people able to pay $1000 per hour of chemo. than you are able to produce hours of chemo, the people able to pay $50 dollars an hour are going to die. And because that group of people is statistically small (though numerically large) there is no real incentive to cater to it.
Just wanted to touch on a few other points raised. I’ll be brief.
Thomas said:
“When you threaten me with force to demand I buy insurance, “freedom” is not one of the operative words involved.”
-You are threatened with force to pay for the services provided to free-riders all the time. Even the homeless receive the protection of our outstanding military and access to the court system that WE pay for. Does this make you less free?
Jim Glass critisizes public education as a poor model for healthcare to follow:
“(Yes, that Professor citing public schools as the model to follow is bizarre.) “- A poor model indeed. American workers are some of the most productive in the world.
Ken concurrs:
“As with public education, if public schools fail miserably, like they have here in Baltimore, you can’t get out” – This is either myopia or intentional obfuscation. Baltimore has one of the longest running and most extensive charter schools in the country. http://www.bcps.k12.md.us/School_Info/Charter_Schools.asp
30 private schools compete for student tuition in your city. So, no, if you don’t like your failing public school you are not stuck paying additional money. You go to a charter school and pay nothing. Baltimore schools have even begun creating magnet and specialty schools to compete with the charter schools for students.
Truthfully, the public ed. model is a great starting block. It’s true that drop-out rates are awefull and our math and science skills are sub-par, but I have never heard of a student who wished to learn being denied a quality education. I know many who wish they could afford the new heart meds because stantons make them unable to work (side affects are drowsiness).
In “More Sex is Safer Sex” Landsburg says that overcrowding is not an issue because the larger population will provide a larger pool of the geniuses that drive innovation. For that to be true, they all need access to an education. And keeping these “geniuses” tied down to a cubical farm because their wife’s asthma (or whatever) makes it impossible to get insurance isn’t going to lead to that innovation either.
“You are threatened with force to pay for the services provided to free-riders all the time. Even the homeless receive the protection of our outstanding military and access to the court system that WE pay for. Does this make you less free?”
Yes, it does. Which is why I don’t use the rhetoric of freedom if I’m arguing in favor of taxation and government dictates. And that was my point to Tom Lucas: There may be plenty of valid arguments to make to advocate government-run health care, but “because we’re the land of the free” isn’t one of them.
The point is that you don’t get to co-opt the language of liberty for stuff like this. Advocates of leftist projects already have plenty of their own relevant rhetoric — “justice,” “equality” and the rest. They’re welcome to use those. If you’re making a pragmatic argument, then you’ve got “costs” and “incentives” and the like available to you. But throwing “freedom” or “liberty” in there isn’t just inaccurate, it’s Orwellian. That bit of ammo is available to those who defend liberty, not to those who would — purposely or otherwise — erode it.
Thank about our children.
Kids suffer and die while these esoteric arguments go on here and in Congress. These arguments make no sense to suffering children. Those here and in Congress who represent the greedy health insurance industry argue about “costs and incentives,” “freedom,” “justice,” “capitalism,” “communism,” “religion,” and “younameit,” while kids suffer and die.
What a farce!
The same greedy people and lawmakers argued most esoterically for the “freedoms” and the “younameits,” of the tobacco industry.
What a farce!
They are the people who must have things “PROVED.” And, “NOTHING” can be “PROVED” to them. They simply say, “NO!” As in, “NO! Kid, you must suffer for the “freedom” of the rich to get richer. You must suffer while “justice” is discussed. You must suffer while “capitalists” get more capital. You must suffer while religions and religious beliefs are argued.
What a farce!
Thomas –
“Does this make you less free?”
Yes, it does. Which is why I don’t use the rhetoric of freedom”
I would argue that there is freedom du jure, and fredom de facto. In Somalia, where there is no functioning government the people are, by definition, 100% free from government imposition. But in practice, the people are afraid to leave their homes. They are terrorized by domestic and foreign militias. And they die in their beds wanting the simplest medicines. But they do all of that without the yolk of taxation; does this make them free?
My point is that the taxes that you pay to support the military, which must protect all citizens even non-taxpayers, is a price for freedom. The price of a plane ticket to Somalia will exempt you from it.
Benkyou Burito wrote:
Jim Glass critisizes public education as a poor model for healthcare to follow:
“(Yes, that Professor citing public schools as the model to follow is bizarre.) “- A poor model indeed. American workers are some of the most productive in the world.
But you wouldn’t include among them the 75% (!) who fail to graduate from public high schools in Detroit, 65% who fail to graduate in Cleveland, 65% who fail to graduate in Baltimore, and more than 50% who fail to graduate in 15 other major US cities. Or perhaps you would?
Jim Glass said:
“Proclaiming a general human “right” to a good, service, or physical condition that must be provided using economic resources and organization accomplishes nothing.”
And I suspect he would feel differently if he were accused of a crime by the state funded lawyers who have nearly unlimited resources to prosecute him and great economic incentive to get a conviction. And since a service cannot be a “right” they tell him he’s on his own.
Ha, I am a lawyer, and I just love having the gov’t subsidizing my services at taxpayer expense!
But beyond that, if Benkyou Burito read more carefully he’d know I didn’t say a service can’t be declared a right, I said proclaiming a right accomplishes nothing towards actually providing the service.
Perhaps he will realize this someday when state funded lawyers who have nearly unlimited resources to prosecute him and great economic incentive to get a conviction come after him — but he is reassured by his knowledge that he has a solemn *right* to a top-quality legal defense. Only to find that nobody has funded one for him. So he gets stuck with a minimum-wage incompetent. But as the cage door slams behind him, he’ll know he had his *rights* as declared by the politicians!
Just as all those kids in Detroit, Cleveland, etc., had a *right* to a quality public education!
He goes on to say:
“OTOH, if the item can be provided economically, then it will be and there is no need to create a “right” to it.” And it seems as if holders of this view are forgetting the golden rule of “there are no free lunches”.
Of course there are no free lunches. But there is no shortage of economically provided lunches. I bet you enjoy them regularly!
Which means you don’t spend your time lobbying to create a “right” to lunch — or more generally even to food, although it is a heck of a lot more important to you than near anything else you can name.
People without insurance are going to get sick and injured, that is a constant. Is the most cost effective way of dealing with this constant the status quo; they wait till they can wait anymore and then go to the ER and get taxpayer funded organ transplants and funerals? Or do we spend a fraction more, and provide a multiple of that level of care.
Now who’s dreaming about enjoying a free lunch?
Of course the status quo isn’t cost efficient — as noted earlier, because of the huge distortions caused by (1) the employer-tie cum inequitable & inefficient tax subsidy, as exists in no other nation; plus (2) the McCarran-Ferguson Act, which cartelizes the health industry state-by-state and city-by-city, exempting it from anti-trust as well, so anti-competitive practices abound, (More detail), also as exist in no other nation.
And who imposed these gross distortions into the system? The government. Is the Democratic health care reform going to do anything about them? Nothing except cement them in place forever — because the big political beneficiaries of these distortions are Democratic constituency groups.
So how, precisely, do you propose to get “a multiple” of today’s health care services for “a fraction more” spending, while cementing the grossest inefficiencies in place?
It’s fun dreaming about a great free lunch to come, eh?
(And delicious watching the belief system: “The government has totally screwed up our health care system, so now we have to make it efficient by giving much more power over it to the government.”)
The taxpayer pays about $1.40 for every NYC subway ride. Would that city be better off without it then?
Ha! And WHY is there such a large tax subsidy? Because the transit workers via their monopoly gov’t union receive pay 50% above market rates via work rules like this (yes, double-pay overtime for sleeping at home!)
And with the Metropolitan Transit Authority bankrupt, literally, due to skyrocketing labor costs, the union just helped itself to another 11% pay increase taking federal stimulus funds — oops, no job creation from that part of the stimulus! Building the Second Avenue subway is put off for yet another lifetime.
Result: A new MTA “bailout” via a regional payroll tax landing on communities up to 60 miles away from the nearest subway station, because the city itself is already taxed out, with the highest taxes in the nation.
You ask, Would people be better off without that $1.40 per ride tax contribution? The people in an awful lot of those communities are saying “Hell, yes!” and inciting legislative revolt over that right now.
“My point is that the taxes that you pay to support the military, which must protect all citizens even non-taxpayers, is a price for freedom.”
It is indeed. That’s why the founders recognized that protecting ourselves from outside threats — protecting our ability to maintain our liberty — was one of the few core roles of federal government.
Look, I haven’t even been making a normative argument here against the health-care bill, or even one in favor of liberty. (Though I’m happy to make both if you want.) I’ve simply been making a point about rhetoric: One must be either uninformed or dishonest to co-opt language like “land of the free” — which has a distinct contextual meaning in American history — in advocacy of this legislation.
The Founding Fathers were Slave Owners. This makes me a suspecious of their logic. Where were they going with all that high minded talk?
Jim, very pithy. And good arguments too. Just a few points.
*”But you wouldn’t include among them the 75% (!) who fail to graduate from public high schools in Detroit, 65% who fail to graduate in Cleveland, 65% who fail to graduate in Baltimore, and more than 50% who fail to graduate in 15 other major US cities. Or perhaps you would?”
I would. I did my first year of Highschool in Detroit at the Frank Cody Highschool. I got the education I wanted to get, a very good one. The 75% that fail out before graduating are generally getting the education they want and those that don’t are not failing because the school neglects them but because of other issues in their lives that make staying in school less rewarding than leaving it. I have never seen a public school student who really wants to learn fail the system.
*”Only to find that nobody has funded one for him. So he gets stuck with a minimum-wage incompetent. But as the cage door slams behind him, he’ll know he had his *rights* as declared by the politicians!”
When the alternative is no lawyer, even a bad one is a blessing. However bad the success rate of court appointed attourneis may be, the success rate of those who represent themselves is far far worse.
*”Just as all those kids in Detroit, Cleveland, etc., had a *right* to a quality public education!”
Yes. Just like them. And no one believes the year I spent at Cody was as good as a year at Cranbrook. But if the alternative is nothing, I wouldn’t have been able to afford to start Highschool. Nobody thinks that the post office is as good as DHL, but without it I never could have had my transcripts delivered to Germany to qualify for a fellowship at the Marshal Center.
*”Is the most cost effective way of dealing with this constant the status quo; […] Or do we spend a fraction more, and provide a multiple of that level of care.
Now who’s dreaming about a free lunch?”
Can we agree that the number of people who come down with serious illness and get seriously injured is more or less constant and not affected by the type of healthcare system in place? You could argue “moral dilema” and say that if everyone had permanent health insurance then less would quit smoking or more would go skydiving, but … really?
So if the number of serious medical cases is constant, are you suggesting that fewer resources are needed to treat them if 30 million people don’t have the ability to pay for those treatments? An ER visit utilizes the same number of doctor hours whether the person is paying or not. That money has to come from somewhere either directly or as a revinue lost on time treating a non-payer that could have made money treating a payer.
45 million (including legal and illegal non-citizens) residents are uninsured, when they show up in the ER we treat them. You can’t make that cost disappear and then compare the cost of healthcare reform with $0.00. I will concede that the savings on treatment costs realized by allowing people to visit doctors instead of waiting until they need an ER does not mitigate the cost of insuring those people. But it takes a bite out of it and by the most conservative study it will save 18,000 lives a year.
*”Of course the status quo isn’t cost efficient — as noted earlier, because of the huge distortions caused by (1) the employer-tie cum inequitable & inefficient tax subsidy, as exists in no other nation;”
We agree on this.
*”And who imposed these gross distortions into the system? The government. Is the Democratic health care reform going to do anything about them?”
The government allowed the exclusion and business quickly utilized it to provide large chunks of subsidized payroll. The democratic HCR is designed specifically to fix the situation. By taxing health care insurance value above $9k, the incentive to offer bloated plans is mitigated. Revinue will be made off the taxes, but the real benefit is in forcing business and employees to work with the real value of their compensation (or at least much closer to it.). So you say companies will just drop their plans to one that costs $8999.00 and AHA there’s no gain from the tax! But the real problem is the huge number of healthcare dollars spread unevenly because companies can hand them out tax free. The market distorsion is caused by government interference and this plan aims to remove a portion of that interference.
*”So how, precisely, do you propose to get “a multiple” of today’s health care services for “a fraction more” spending, while cementing the grossest inefficiencies in place?”
Touched on this, but say 1 in 100 of us will get Cancer. It’s actually 1 in 3 but I’m talking about the kind that requires serious care. That means that out of the 30 million uninsured that the HCR bill would insure, 300k of them will need some kind of cancer treatment. Without insurance, they find out they have a tumor after the cancer has begun causing them pain bad enough to go to an ER. With insurance they find it when they have an exam, or notice something is wrong and get it checked out. If the tax payer is footing the bill in either case (we can’t just let them die), why would you want us to pay so much more for a system that begins treatment at stage 3 or 4 and results in a higher mortality rate? Yes, the CBO says the costs would be marginally higher than the current “uncompensated care” system (my fractional increase in cost). But the result is 18k fewer deaths a year(my multiple of todays care). Unless you think 18k less people dieing is not much much better care.
*”The taxpayer pays about $1.40 for every NYC subway ride. Would that city be better off without it then?”
Ha! And WHY is there such a large tax subsidy? Because the transit workers”
There is a large subsidy because the cost of any alternative would be absurd. Subsidizing a transit system $6B saves them many times that in lost revinue. And transit workers get paid alot and have little productivity oversight (though not bad overall productivity). But everything in NYC is done by union labor, the MTA isn’t unique in this. I agree that strong unions sap at efficiency, but there must be some value to the laws that empower them so or else people would stop doing implementing them.
*”And with the Metropolitan Transit Authority bankrupt, literally, due to skyrocketing labor costs, the union just helped itself to another 11% pay increase”
The union was given the raise that they had negotiated for but had been denied by the city due to economic conditions. Again, I agree that the power of the unions saps at efficiency in most cases, but they just got what the city had agreed to pay them.
But you are wrong about the cause of the MTA financial woes. Labor costs haven’t changed much since 2006 when “The MTA’s net cash surplus approached $1 billion at the end of fiscal year 2006 as the housing market boomed and pushed up real estate related revenues”-Moody’s (http://www.reuters.com/article/idUSN2753030920090327) The reason they are hurting is the same as all the other big companies that are hurting, we’re in a recession.
*”Result: A new MTA “bailout” via a regional payroll tax landing on communities up to 60 miles away from the nearest subway station, because the city itself is already taxed out, with the highest taxes in the nation.”
This portrayal of the MTA plan borders on dishonest. The payroll tax will land ONLY on the counties served directly by the MTA. It will land proportionately lighter on counties with less MTA service. So Dutchess County will pay a 2.5% payroll tax while NYC will pay 3.4%. As Steven Landsburg said in “more Sex is Safer Sex”, if the people living and working in NYC didn’t think it was worth the cost, they would leave.
Ken,
I don’t know were you come off calling me a fool. I believe this is supposed to be a civil discussion and if you don’t agree with my position there is no need for name calling. Moreover, if you read my post correctly you would understand that I am not advocating for an all out government system. My position is that government is necessary, at least as a regulatory body, in any model that is implemented. I suggested a non profit model and that does not translate to government run insurance. Please make an attempt to understand someone’s position before attacking them.