I like Michael Cannon a lot, but I fear his (and Michael Tanners’s) book (unlike fellow Cato-ite Arnold Kling’s) was very, very weak on dealing with the problems of actually sick people. It devoted a whole three lines to the problem of what happens to controlling costs beyond the deductible–even though everyone knows that that’s the most expensive part of health care. Kling at least knows that covering them is a problem, although he never really comes up with answer either (he does dance around the edge of high risk pools for the chronically ill).
But I just assume the liberal LA Times is carrying this op-ed from the two Michaels as part of its affirmative action program. Cannon and Tanner have amazingly discovered that universal insurance does not mean immediate access to any care anybody might want for free. And so they have decided that lots of people not having insurance is therefore OK.
There are two basic problems with this logic.
First, and this is barely worth saying, but care is rationed in the US just as much as it is elsewhere. if you don’t believe me, believe the capitalists at the Wall Street Journal—who ran a long series on it in 2003, and believe fellow free-marketeer John Goodman. So saying that people have to wait for care in Europe or Canada is true but not an immediate indictment of their health care systems. Of course rationing of health care may not impact Cato scholars or even hopefully liberal health care consultants in San Francisco, but it sure as hell impacts poor uninsured people waiting for care in (say) Galveston, Texas.
Second and this much more important—a universal health insurance system means that the insurance is universal. What does insurance do? Insurance ensures that if you are not financially wiped out from a disaster, such as having your house burn down or in this case, being sick.
There’s no point rehashing the bankruptcy statistics here—the point is that the key reason the Europeans, Canadians and Japanese support their universal insurance systems is because they know that a spell of illness does not mean financial destitution. Here it is quite possible that it will, and in many cases it does–but don’t worry it’s only one quarter of bankruptcy cases. Barely worth bothering about, eh?
That the Cato boys couldn’t even address this—which is by far the most important problem with the US lack of universal health insurance—is presumably because the LA Times was too cheap to give them more words. At least I assume so. It can’t be that they think it doesn’t matter, can it?
CODA: Meanwhile I just found out that John Goodman has a blog.It’s called The John Goodman Health Blog. I’ve been there poking a little fun in some of the comments, including this one about the bankruptcy issue. I suggest you all go there to check it out too and join the intellectual giants like Pauly, Herzlinger, Pipes et al in the comments.
Gee, I hope asking Vincent his affiliation didn’t scare him away. When I’m investing time in a discussion I just like to know whether I am talking to a paid industry hack or not.
From Vincent: “The price system is the most efficient modality to allocate resources. ”
Uh huh…..so we are to (and do) allocate medical care on the basis of who has the most money in their pocket and NOT on the basis of
(a) who is the most ill and can be treated with the most cost-effectivness (cancer treatment is more important than Botox injections, and chronic pain care supersedes face lifts and tummy tucks, and spinal disc surgery that works and costs $50,000 is preferred over heart transplants for infants that run nearly $2 million in care and will only last 5-10 years and the tax payers get stuck with the bills. So okay, the choices get tougher.)
(b) who is the most deserving – a factor not to be ascertained from the state of their investment portfolio but from their usefulness to society (and in that case an elmentary school teacher wins hands down over Donald Trump; a car mechanic beats out that Nicole person who did nothing but swing her tits; and the garbage collector is far more valuable to society than Paris Hilton.)
Obviously we are dealing with a poster who has never gotten past the first few sentences of the garbage spouted by Milt Friedman (considered more than a little crackers by his students.)
Unfortunately his beloved “free market” does not distribute the essentials of life such as housing, food and medical care so that all have an equal chance at basic survival.
Lets go back to Malthus (19th century father of the ‘free market’ theory.) He stated that all wealth should be concentrated in the hands of the upper few whoown the land and means of production (about 5-10% of the population) and that the other 90% who are the worker bees should not get more than it would take to keep them alive and breeding at a subsistence level. Unless Vincent is Bill Gates in disguise, guess he gets to live at the same level as a peasant in Africa. Malthus would find Vincent’s SUV an abberration and ould insist that the price of the SUV be raised beyond what Vince could afford as it is an unnecessary waste of resources on a worker bee.
Funny how the ‘free market’ addicts would never dream of giving up (1) corporations as a business form which limits liablity for their owner/shareholders or (2) patent protection or (3) tax breaks for corporations or other governmental policies which skew the market in favor of business against the consumer.
Vincent, the 20% that are using 80% of health care are largely the elderly and end-of-lifers. What else would you expect, the reverse?
According to Health Affairs Vol 23:#3 ,2004, the US ranks first only in breast cancer and Canada ranks first in (a) childhood leukemia, (b) kidney transplant, (c) liver transplant and (d) strokes. The US is worst in kidney transplant and 4th in colorectal cancer. What’s this about free market medicine that is so great?
And for purposes of disclosure, I am a retired Medicare patient with no ties to industry. What is your affiliation?
Since we know that 20% of the population uses at least 70% of the resources, is it any wonder that 80% of the population likes the system. They are NOT SICK. They don’t need to use the system and therefore don’t have a problem with it.
A child I met while travelling summed it up quite well. He said, “DUH”.
Elliot, I must thank you for calling me an “ignorant windbag”. Resorting to name calling only shows your intolerance and lack of true understanding.
On to the facts.
1)Despite continued assertions to the contrary, longevity has long been debunked as a measure of a health care system’s results.
2)I never said “optimal”. I said most efficient. I never implied perfection, you did. Why do the defenders of socialism always resort to the “perfection argument”, yet patently ignore facts such as Canadians waiting 18 months for a hip replacement?
3)The US system is far from a free market. In fact, it is the socialist tendencies that result in the shortfalls, not vice versa.
4)I would request one example form history where government fiat ( eg making some good or service affordable) did not result in increased overall costs, oppression of individual freedoms, and misallocation of precious resources. Just one example.
5)If you really think that Canadians have better health care outcomes then please explain why overall as well as some stage specific mortalities are better in the US for breast cancer, prostate cancer etc.
6)Your 4 points about resource allocation are impossible in socialism. So I guess what you are saying is that if we can’t have “perfect competition” and “perfect information” then we should just succumb to government control. Nice. I think James Madison would have personally had you hung for treason.
Vincent, we don’t ration many things that are funded by the government; fire and police protection are a couple that come to mind. And under a Medicare-for-all system we wouldn’t have to ration care if we were politically willing to quit giving tax breaks to the wealthy. It’s a matter of priorities, and in our political system you change those with campaign contributions.
Government doesn’t always increase costs, but when a particular agency is allowed to run wild that does indeed occur (the defense industry is a good example).
The long lines in Canada that you mention is because of their underfunded system. We will never be accused of that in the US. They spend 10% of GDP and we spend 16%, and what we are saying is that if we spent our 16% more wisely and eliminated the waste and unnecessary elements, we could cover 100% of our population for the same money we are covering 85% today. And we have the masses of the people providing the oversight on health care that are absent from the defense budget talks.
And Stuart, if the Canadian system is so bad why do over 80% of Canadians prefer their system to ours? And why, out of a survey of 18,000 Canadians, had only 20 come to the US for elective care?
elliotg makes a convincing case that healthcare models are likely to fall far short of satisfying his 4 fundamental conditions for optimal resource allocation.
Unfortunately, one is left wondering what mechanism(s) are markedly better at doing so – and perhaps more daunting, how to efficiently persuade “everyone” (would 50.5% of us be enough?) of their superiority
I’m not sure that I understand the source of Mr. Holt’s confusion – aside from the fact that “Mr. Holt is just being Mr. Holt”. His whole “Browning thinks Canadians and Brits are evil” schtick is also amusing. I don’t know exactly who it is he’s trying to fool.
I have no differences with John Goodman’s position for obvious reasons to anyone who has read my blog or my postings here. I – along with all the other free market advocates – oppose government rationing of health care via physical force. And yes – Mr. Holt that’s what it is – and that iss what you advocate. It is not done in the U.S.. It *IS* done in Canada and I have many Canadian friends that can attest to its consequences. Yet – that won’t stop Mr. Holt’s prevarications.
Vincent, what a fine screed with so much ideological purity that it makes me proud you are an American. There is so much to comment on in it that I simply can’t cover it all, but this one quote popped out at me:
“Government fiat invariably increases the overall costs, oppresses individual freedoms, and misallocates precious resources. The evidence for these results are apparent throughout history.”
Given that the Canadians enjoy better healthcare results at a lower cost, I am truly impressed that the evidence exists that shows they would enjoy even longer life at even lower cost by adopting our healthcare model (or some liberterian fantasy of healthcare funding).
I’m sorry because I’m going to have to shout the next part and it IS an ad hominem. I just can’t help myself.
GO BACK TO INTRO TO ECONOMICS YOU IGNORANT WINDBAG BECAUSE:
Optimal allocation of resources depend on the following fundamental axioms.
1. Price transparency
2. Perfect competition
3. Rational consurmers
4. Perfect information
I will never convince you that none of those 4 FUNDAMENTAL conditions exist in any real world healthcare models, but I think that any rational observer of reality would understand why a market approach to healthcare does not work very well (excluding the odd Harvard professor).
Economics is , in essence, the allocation of scarce resources. Scarce does not imply that there is not enough of a resource to go around, but simply that no resource is unlimited. Therefore, everything from bubble gum to healthcare must be “rationed” in some way. This is a simple and undisputable fact.
The question, as always, is how to ration anything. There are two basic modalities, the price system or government fiat.
The price system is the most efficient modality to allocate resources. If you disagree with this, then I would suggest that you investigate the economic results of communism, socialism, or any attempt of a capitalist system to make anything “affordable”. Try reading Basic Economics by Sowell. Mr. Holt’s apparently new discovery that resources must be allocated is a brave new step for him. However, he uses the word “rationed” in an inflammatory way which is more indicative of what the UK and Canada do than what happens in a free market. The pathetic argument that is implied “You do it too” fails to address the underlying issue. In the UK and Canada the government RATIONS for you. Not only what you can have, but historically what you can’t have (ie paying for a CT that you want now like a Canadian citizen can do for their dog, not in 3 months). In a free society, you the individual have the personal freedom to decide what you want in exchange for your labor and when you want it. If you can not see the difference then the words inalienable rights must be meaningless to you.
Government fiat invariably increases the overall costs, oppresses individual freedoms, and misallocates precious resources. The evidence for these results are apparent throughout history. One may be able to turn a blind eye to the negative effects of such systems that have already collapsed. However, the long lines for health care, the delayed treatment of cancer, the substandard outcomes of cancer care, the recently overturned ban on paying for one’s health care in one province, and the need to flee to other countries for appropriate care are ongoing and inherent problems that exist in the UK and Canada.
Mr. Holt’s disingenuous portrayal of the problems in the US can invariably be traced back to government interventions that grossly perturb the price system (ie the free market). He continually uses the negative effects of socialist modalities imposed on the free market by the US government as a justification for further government control.
Finally, Cannon’s book is a comprehensive yet concise elucidation of the problems in the US market. He expressly states that the purpose of his book is to bring the problems to light and build a framework for rational discovery and discussion. His goal was not to provide a comprehensive plan. Indeed, Cannon wrote “We do not claim to know any particular solution to these problems. We do, however, propose a method of discovering them.” Mr. Holt, once again, has twisted the truth in order to forward his insidious plan to marginalize freedom.
Matthew, you do understand what I wrote – you just don’t appear to understand the implications of what you’re saying for cutting down the enormous ring of health system reform issues that we need to engage to make things better.
Add this to your reflection: if “‘insulation from the high costs inherent in care” (or some variation thereof) is your principal health system reform concern, you will never – ever – get there from here.
Gee, I didn’t know that stating an opinion was a problem. I’ll try to avoid that in the future.
> Tom & Jack–your enjoying yourselves too much.
Oh, sorry. I got carried away. Mea culpa, mea maxima culpa. It won’t happen again.
Now, where’s my cilice?
Thanks elliotg. Yes you’re basically right & I too think it’s a close call between those alternatives with a lot more government interference required than most on the free-market end would like. BTW this conversation will be picked up tomorrow over at TPMCafe
I think what gjudd was saying is that healthcare reformation should not be insurance reformation. If I have read you correctly in the past, you see that insurance based reform is possible and the easiest way to get from here to there. This means you believe that the problems with insurers cherry-picking, refusing to underwrited, and denying legitimate claims are easier to solve than the problem of implementing a NHS type beauracracy. I think it’s a close call, but I tend to come down on your side in that argument.
What fun. Mr Browing is Mr Browning. But he needs to go to John Goodman’s blog and attack him because Goodman thinks all health care systems ration. And he’s right–we just rationally disagree on who to do it best. No one knows what Mr Browning actually thinks other than Canadians and Brits are evil!
Gjudd, I just don’t understand what you’re talking about. I’m not being difficult. I literally don’t understand what you wrote. If you’re saying that I think insulation from the costs of medical catastrophe is the most important function of a health care system, then you’re right. Our fails way too many of our citizens on that score.
Tom & Jack–your enjoying yourselves too much. No place for that on THCB!
> Have I missed anything?
Well, choosing care givers is the horese-and-buggy way. And you haven’t got a good basis for making a choice. And the fact you could do go without insurance, avoiding all its attendant evils right now. And that there’s no “we”. And that they are not “our” healthcare dollars. Besides this, I can’t think of anything you have missed.
> I’ve also covered this at my blog today
Oh I see, Mr. Browning! It is all clear to me now. If nobody had the least hope of receiving care they couldn’t pay for, they wouldn’t get in line, and voila! No waiting! No rationing either! And we wouldn’t have to sit in a waiting room full of old, wrinkly Medicare recipients either, because, well, we wouldn’t need waiting rooms since there’s no waiting! This would save us even more money! Why didn’t I think of it?
Why not, indeed?
I want to choose between various care givers, not various insurers.
It is time for this country to eliminate our horse-and-buggy way we deliver health care, eliminate the cash that flows between the insurance industry and the politicians that protect it,and eliminate the insurance companies that consume 20% of our health care dollars in added marketing costs, broker commissions, exorbitant executive salaries, underwriting costs, gatekeepers to deny care, and profits to satisfy shareholders.
Have I missed anything?
gjudd, if I understand you correctly, are saying that the time for fixing the U.S. systemic healthcare problems is not yet with us enough to warrant gov. run insurance/universal care? I wonder when we will get to that point because right now no one is trying to fix anything, they’re just trying to protect revenue flow. Are you saying that crisis will be a good time?
someone’s having a case of the Mondays….
when I try to imagine feasibly implementable early-stage ‘solutions’ to the systemic problems of the US health care system, my mind never turns to ‘insurance’ based solutions.
That’s almost certainly because of the time I’ve spent living in that part of the existing system.
Matthew, from the fervor of your conviction that the readiest solutions lie in that direction, I can only conclude you’ve had the good fortune not to have spent much, if any, time in in that realm of the health care industry?
I’ve also covered this at my blog today:
To say that “care is rationed in the US just as much as it is elsewhere” is beyond ridiculous. And – where is your peer reviewed study that proves this wild assertion, Mr. Holt? Anecdotal stories of rationed charity care in the U.S. should not be surprising to anyone with even minimal of knowledge of economics. Government-subsidized apartments are rationed here also.
The system in Canada – to Mr. Holt’s approval – turns everyone into a charity case.