There’s a snippet of a post from Mickey Kaus that deserves comment:
Health care reform is not really about covering the uninsured, and it’s not about controlling cost, it’s about … something left-wingers used to understand, before they got Orszombified!
I have concluded somewhat sadly that those who are riding the uninsured hobby without understanding quite how bogus the issue is are mostly doing so with the intent of promoting whatever solution they can pass through the Congress as a stalking horse for at the very least a single payer system, at the worst a full-blown national health system like Britain’s. They’ve despaired of controlling costs without price controls.
You’re probably right. I, for one, know quite well that the public plan has a chance of leading towards single-payer in the form of universal health insurance, which is why I support it. I’ll take potential waits for non-critical surgery and treatment over nerve-wracking financial insecurity and the strong possibility of bankruptcy if I’m not rich.
I’m honest, at least in that. I think it will lower costs and cost growth, for a while at least (I don’t pretend it’s a miracle cure), and it allows us to get past the “demand” issue (who is paying for what?) and focus on how to increase supply (i.e., how do we incorporate incentives for certain types of treatment, treatment by rate versus “group treatment” a la Mayo Clinic, and so forth).
I wouldn’t say it is “bogus” so much as it is secondary – it describes a series of negative processes (namely, those that lead to people not having coverage due to inability to pay, unwillingness to pay – even if the risks are there, and lack of knowledge on how to get existing coverage) leading to a negative result (a large group of people whose medical costs, when they incur them, get pushed off onto others because society isn’t willing to let people die in the streets*) that is only one of the problems involved in the health care reform debate, and not the biggest one by far.
Sorry for the triple post-
*For the record, I’m not a fan of allowing people to die in the streets due to inability to pay.
I hope no one has a match……….cuz there’s alot of straw men around here…….
Dave:
I’m barely insured right now. I moved from NC to CA and now in CA no one will cover me. I don’t mean that they won’t cover me at a reasonable cost, I mean they won’t cover me period. Why? Because I’m in my 50’s and take Zocor and very well-controlled cholesterol.
Fortunately there’s a way around. CA state law requires coverage for groups. So my wife and I had to form a corporation. I don’t even know what the tax hit might be but the paperwork and legal costs are bad enough. So I have a temporary policy until we have this corporation up and running for three months.
That’s the reality for me. And I’m not poor or even working class. Nor am I sick. But everything I have is at risk because of the current system.
So yes, I support a government take-over. I want everyone in the pool, I want a public option and if it kills the private insurers so much the better. They can’t die off soon enough to make me happy.
Yes, national bankruptcy is sooo much better. After all, places like Britain and Canada aren’t having issues with their health care systems….oh wait. Nevermind.
Translation: Michael wants me to pay for his insurance. Michael, I’m sending you the bill for my next car.
Steve:
Spare me. I’ve paid quite literally millions in taxes. A lot of that bought the defense that keeps you safe and the air traffic control system that keeps you safe and the FDA that keeps your drugs safe and on and on and on . . .
My guess is if we both whipped out our IRS filings we’d find that I’m subsidizing you and am continuing to do so.
No I will not spare you your nonsense. National Defense and air traffic control are public goods, not private goods. You want me to subsidize your purchase of private goods based on the provision of public goods. Logically that does not follow at all.
Steve:
Why is national defense public and health care not? It’s a decision we can make either way. I’m saying I’d like it to be a right for American citizens, and that if needs be I’d subsidize it.
I didn’t insult you. Actually you accused me of wanting to dump my bills on you. It’s the standard line of attack when anyone suggests we should treat a particular expense as a shared one — as we do defense, regulation, border control, the FBI, the national parks, many types of research (including a lot of medical research,) social security, and many other expenses.
It’s my experience that most John Galt wanna-be’s are not exactly Atlases. There are a lot of people carrying big chips on their shoulders about taxes who don’t actually pay any taxes. And many of us who do pay the actual bills take a rather less resentful attitude toward that duty.
Your consumption of “1 unit” of national defense does not prevent me from consuming that exact same “unit” of national defense. Its a definitional thing. Public goods are non-excludable and non-rivalrous in their consumption. Private goods have neither characteristic. Health care is both excludable and rivalrous. If a doctor puts stitches in you he cannot put the same stitches in me. If you take a pill, I cannot take that same pill–its in you, and your body will eventually metabolize it.
No it isn’t. You can’t transmogrify a private good into a public good simply by a popular vote.
I’d like for it to be a right that you pay for my next car. I promise I’ll be modest. Don’t know about Dave or Drew, by I’m not a big car guy.
And you are. With public goods you are getting exactly the same thing I’m getting. With health care what you consume is not available to other because you’ve consumed it and in consuming it its gone.
There is a sound reason for public provision of public goods. Typically the market fails to provide the optimal amount. So, another alternative is found. All of the things you’ve listed are either public goods and/or have significant external benefits. To the extent that health care has external benefits, fine subsidize it. But those things are like immunizations to cut down on disease vectors and research that otherwise wouldn’t be undertaken or we don’t want patented/copyrighted/trademarked/etc. (e.g. possibly a cure for HIV/AIDS).
Look, subsidizing health care is no different that subsidizing car ownership, pizzas, or any other private good. In fact, I’d argue that the current subsidies we have in place and the concomitant bureaucracy that goes with it are one reason why we’ve had such high rates of growth for health care costs. We’ve essentially subsidized the consumption of health care resources of that part of the population that is most likely to use health care resources the most intensly.
You can’t transmogrify a private good into a public good simply by a popular vote.
Watch us.
Your consumption of “1 unit†of national defense does not prevent me from consuming that exact same “unit†of national defense. Its a definitional thing. Public goods are non-excludable and non-rivalrous in their consumption.
By your definition both firefighting and law enforcement are private goods.
Michael –
To avoid a tax issue form a pass through entity: an LLC.
Yes, you can call it a public good, just like I can call you a hippopotamus. It doesn’t make it true. Subsidizing consumption of private goods means you’ll have less of other goods to consume and be less able to provide actual public goods.
In short, you don’t want to pay for your medical care, so you want everyone else to pay for it. At least step up and be up front about this for crying out loud. Write it. “I can’t afford this, I need taxpayers to foot the bill.” At least it will be honest.
With significant external benefits. You did see that part of my comment right? If your neighbors house catches on fire are you content to sit there and let it burn…even if you hate his guts? Or would you want it put out so it wont damage your property? With publicly subsidized police there is likely going to be less crime overall, thus you are safer and better off. I’m fine with subsidizing private goods with external benefits. I’m fine paying for public goods. I’m not some Austrian here saying that such things don’t exist, but for crying out loud be honest when it comes to health care–you want a subsidy. Any other argument, IMO, is a lie.
What would really tickle me is if we go ahead and Michael ends up paying through the nose via taxes because he has such a high income. Oh I’d laugh a Nelson laugh at that one.
As I understand the way these things are normally calculated “administrative overhead” in health insurance is something along the following lines:
Administrative overhead = Premiums – payments to providers
If it’s handled anything like the portion of the insurance business with which I’m intimate, it’s jiggered so it’s a fixed percentage of premiums. Under those circumstances a subsidized public insurance system will always have substantially lower administrative overhead than a private one.
We shouldn’t confuse that with efficiency.
Would that Krugman et. al. thought that way….
Steve,
So instead of using arbitrary categories you’re using an arbitrary sliding scale. In either case it happens to include exactly those things you want and exclude exactly those things you don’t want.
You’ve claimed public health care has no significant external benefits, other than its role in curbing the spread of communicable disease. Yet you’re ignoring an even more obvious one: the fact that healthy people usually can work and produce economic growth (and tax revenues), and sick people usually cannot. If your neighbor sickens and dies because of an illness or a car accident, that’s one less person who can help you manage the costs should you become critically ill or injured.
Which can happen to anyone, BTW. The only difference from fire is that it’s slower, usually.
No, I’m not. The thing is if we went and subsidized things that were public goods and had external benefits and taxed those thigns with external costs, and used an income tax to pay for things the other taxes didn’t cover…things would look very, very different. Government would be much, much smaller. Politicians treat the government budget as a candy shop that they can use to make their “friends” happy.
No, it doesn’t. I’d be much, much better off if Michael were to buy my car. I could then use the money I’d have spent on a car on other stuff and be strictly better off. I just happen to realize this is the path to ruin. There are valid rational reasons for subsidizing goods with external benefits and public goods. I’m happy to subsidize/tax any good where there is a market failure. Private goods tend not to have issues with market failure…unless there are external benefits or information asymmetries. And for the latter markets have been rather adroit and finding work arounds.
And I’d be even more productive with a house (paid for by Michael), a car (paid for by Michael), and food (paid for by Michael). That productivity flows to private agents not society at large as like a public good. And I don’t see lost productivity as being external to the market. Those costs are readily apparent. And externality is some activity that impacts another person’s budget and/or welfare. Smoking is an externality in that it also impacts the welfare of those around the smoker and there is no mechanism for redressing the lost welfare. Lost wages due to lost productivity impact the sick workers own budget (not mine) and his employers profits, it is not external to the market.
This is why people have insurance. You have insurance to protect against wealth losses in the “bad” state. Problem is when you are already in the “bad” state you can’t then go buy insurance. When there is a market with no uncertainty you will have no insurance. Insurance only works a priori and when there is uncertainty. You might get into a car accident tomorrow. That is why you buy car insurance today. You don’t buy car insurance because you might get into a car accident yesterday…why? Because you already know with certainty if you did or did not get into a car accident.
You will, of course, provide proof that universal health care is driving Canada to bankruptcy.
Sure it does. It’s based on the idea that ensuring that everyone has some ability to pay for health care has positive effects on society as a whole.
I understand how that might be a foreign concept to someone like you, who worships the market as an end rather than a means to greater prosperity.
Sure. “I can’t afford decent insurance coverage on my own, so I want to set up a system where everybody (including myself) has access to insurance coverage.”
I don’t particularly give a shit about the “private” vs “public” good distinction, either – I care more about whether having universal health insurance has positive effects for society as a whole.
I’m not surprised you don’t understand the significance of that. You see the free market as an end in of itself, and judge the correctness of actions on the basis of whether or not they result in freer or less free markets. I don’t – I see the market as a tool for greater prosperity.
When it stops being such a tool on certain issues, I’ll toss it aside.
How about the lost taxation that pays for all those public goods you defend?