George Newman in the Wall Street Journal today does a good job with some health care reform myths. I especially like this perspective on a “public” plan:
“We need a public plan to keep the private plans honest.”
But then why stop there? Eating is even more important than health care, so shouldn’t we have government-run supermarkets “to keep the private ones honest”? After all, supermarkets clearly put profits ahead of feeding people. And we can’t run around naked, so we should have government-run clothing stores to keep the private ones honest. And shelter is just as important, so we should start public housing to keep private builders honest. Oops, we already have that. And that is exactly the point. Think of everything you know about public housing, the image the term conjures up in your mind. If you like public housing you will love public health care.
Give the Newman piece a read. It does quite well at gutting the arguments for the proposed health care reforms.
Stuff From Hsoi 
Hi John,
I know we are on opposite sides of this debate, but I really lost respect on his opinion when I read the footnote and saw “retired business executive”. I probably shouldn’t assume this, but I have a feeling he has never had to decide between a docked salary and health care.
My brother-in-law’s company is not doing so good. They told him that all employees would have to choose between losing all dependent health care (he’s got a wife and two kids) or take a 10% pay cut. His company already docked everyone’s pay by 10% at the beginning of the year. He had to take another pay cut.
I also think his metaphor is wrong about both food and clothing. Food and clothing don’t have year after year inflation rates that health insurance does. Food and clothing companies also don’t have a 15-25% overhead/profit margin they must make (unless you count Starbucks).
And his comments about the USPS monopoly just don’t add up. Since 1982 the Post Office has been profit neutral, yet there is still a market for UPS, FedEx and others. And unless something has changed, the post office only gets a subsidy from the federal government to pay for free or low cost postage. So I am not sure what he means by “high cost, inefficient wards”.
I am not saying that a public plan is going to be the best solution. I just don’t think anything stops any of the “1500 private companies” from charging 15-25% overhead right now as the industry standard. Maybe that amount is justified in some way, but I am going to plead ignorance and guess those companies aren’t going to publish the information on where that money goes.
Also, if the life expectancy of the US was in the top 10 countries world wide, I’d say all these health care costs would be worth it, but I think we squeezed into the top 50.
Anyway, sorry about the rant. Feel free to break down my arguments. 🙂 Healthcare is just my hot topic. The people close to me who have been burned by either not being able to afford healthcare or having healthcare and still getting screwed financially really puts the issue in perspective for me.
I don’t believe our current system is ideal, and certainly the problems behind it are rather complex. I do feel part of the reason for the high cost is fraud, covering the costs of others, liability (e.g. people suing doctors for exorbitant amounts because they feel it’s their ticket to get rich), and so on. Plus making insurance a for-profit venture does create some sembalance of a conflict of interest: do we satisfy our pockets and shareholders, or the medical needs? It’s an interesting thing to balance for sure. In many ways, the problems are fueled by simple human greed.
My main beef is having the government control things. Let’s look at USPS as an example. When demand for a product goes down, what usually happens to the price? It too goes down. But the USPS operates differently. Their demand has certainly gone down (they are primarily letter carriers, whereas UPS/FedEx are primarily package carriers…i.e. I can send an email and USPS loses business, but I can’t email a large box of goods thus FedEx/UPS continue along). So what does USPS do in response to dropping demand? They raise their prices! Huh? How is that going to lead towards increased demand for their services? And in response USPS has talked about things like dropping a day of service to help cope with their financial situation… so, pay more, get even less. And I’m supposed to feel good about this?
Let’s also look at the current “socialized medicine” that we already have. Look at how Medicare is handled. Look at how our military and veterans have to deal with things. If it’s bad now for them now, how is expanding such a program going to lead to better things?
I think much of our problem comes from the fact we meddle too much and demand the government meddle more to fix the prior meddling. As an engineer yourself, you well understand the ugliness of spaghetti code and how we should be striving for simple solutions as they tend to work best and be more maintainable over time. Can you name me one thing the .gov does that is truly simple? 🙂 And let’s not start with our income tax code.
Frankly I’d love to see us work to strip away than to keep piling things up and making a bigger more unsustainable mess. I feel for the situation of your friends and family. I just don’t believe that short-sighted solutions that can lead to a long-term bigger mess is the right solution.
I agree with your USPS comment about it not being right that they raise stamp prices because of lack of demand. I think I read the USPS has a $6 billion shortfall this year. I guess the only consolation I see in their prices is that the Post Office never historically outpaces inflation. Maybe that will change though with their new flexibility in setting stamp prices.
I think the urgent problem that needs to be fixed with health care is the year over year outpacing of inflation usually by 2 or 3 times. That means every 10-15 years our health insurance costs are doubling. I don’t know about you, but that just scares the crap out of me that in 30 years when I retire that I may be paying 4-8x the cost of today. Especially when that is probably the time I will need health insurance the most. I just don’t see how the industry can change without some kind of “push” to do so. Either via a revolution internal to one of the health care providers or government intervention.
You bring up a good point about doctor liability and it’s impact on insurance. I wish there was an easy solution to that, or at least a filter that weeded out the frivolous and exorbitant payouts in lawsuits.
I totally understand what you are saying about government meddling. The reason I would never again work for the government (or a government contractor) is the inherent bureaucracy it entails. I’d be completely against any form of single payer system. That would be a total disaster. Choice is always a good thing.
I am all for reduced government in a number of areas. I just think health care is a place where the free market is failing horribly (due in part to all of the constraints you mentioned). More government might not be the answer, but it needs to be fixed sooner rather than later. If someone came up with a viable/revolutionary new way to fix health insurance that didn’t involve government, I’d be all for that. I just can’t imagine there is a magic bullet.
If you want a “push” to improve things, what’s going to change it is the will of the people to change it. The whole “we’re sick and tired and we’re not going to take it any more”. But the interesting part of it here is that it’s not just some consumer product we can do without. It’s adds an interesting flavor to the mix for sure.
So if choice is a good thing, how is forcing the issue via government mandate going to help? Law equals force, and when you’re forced to behave one way or another, that’s removing choice. As I stated before, if choice is a good thing then we need to do things to allow more choice, to allow more freedoms… strip away instead of building up. But that’s so rarely the case when it comes to our legislators… they always want more laws, rarely less.
I don’t deny the health care situation is a problematic one, but given how deep and complex it is, should we try to fix it so quickly? Knee-jerk reactions are rarely good for a long-term solution, and getting the government involved is rarely going to lead to good long-term solutions. Yes we want it fixed soon, but rushing to a fix, is that going to be a good fix? Again, you’re an engineer… the same problem-solving principles apply. Hacks can be OK for some things, but rarely are they solid for the long term.
Long delay… Sorry about that. I had a mostly Internet free day yesterday. 🙂
This is just my perspective, but I feel like we are already past that point where “we’re sick and tired and we are not going to take it any more”. If the poll from last month is to be believed, 72% believe in some kind of public health care option as a choice.
What really gets to me is the health insurance woes are not a new thing. Any past attempt to interfere has been met with “stay out of free enterprise, it will correct itself”. I am still wanting to know when it will correct itself. Or at least some kind of clear plan to reduce costs across the industry.
So I have a question for you (and I don’t mean this rhetorically). How do we as private citizens take on these big corps who are about as transparent as a wall? The only way I know how to force a change in free enterprise is via monetary pressure (eg music industry vs digital revolution). The complication is most of us probably have health insurance through our company. Do we force our companies to find a better deal when in most cases they are also subsidizing the health care cost? Are we supposed to trust our company’s judgement? I just don’t see any choice in that either. It is either go with what your company offers, go with what your SO’s insurance or go without.
I agree that knee jerk reactions usually have bad repercussions, but I am not so certain this is a knee jerk reaction. A knee jerk reaction would have been Universal Health Care in the Truman 40s or even a single payer system in the Clinton 90s. Blech. To use your programming metaphor, I just don’t see an initial design that would make everyone happy. And I can only hope that the initial stab that gets mocked up in the next couple of weeks allows for iterative changes. What I have seen in the plan so far is encouraging at least to me.
Anyway, I am not trying to change your mind or opinions. 🙂 This is just how I see this whole health insurance debacle. I hope my above comments don’t seem too snarky… For someone like me who seems to be leaning more and more liberal lately, I really do enjoy reading your blog.
Yes… the only way to pressure them is with money, and that will require us to have to pressure on up through the chain. So if you have insurance through your employer, you’ll need to pressure your employer and so on. But the trouble tends to be, we’re afraid to. We have spouses, we have kids, we don’t want to risk being put in a situation where they’re going to be put at risk… so we often end up just accepting what comes our way. We feel helpless, and all too often the folks in Washington, the insurance companies, and so on play and prey upon that to further what they want and foresee as best for them, not us.
To go back to the programmer metaphor then, is there an initial design that will keep everyone happy? Nope. Which is yet another reason to not aim for a single-source solution from the government. Sure there’s lip service being given to “competition” but the way things pan out it will eventually not be that way. Check this:
https://hsoiblog.wordpress.com/2009/07/06/cato-on-healthcare/
The thing is, we the people want something to change. We feel we can’t get them to change by any way but by using the force of law. But when we use the force of law to do so, we really end up just shooting ourselves in the foot. We can get change to happen through other means of pressure and persuasion… but without question, how to pay for health care is certainly a different dynamic. But should that mean we should just continue to go for a forced government-based solution? I don’t think so. No the answers won’t be easy, but we can’t just give in now for what appears to be an easy answer because we’re getting desperate. I am not convinced that’s going to lead to good long-term solutions.
And no, nothing seems snarky. 🙂
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