Thursday, June 25, 2009

Here is a recent exchange between a friend of a friend and me on facebook about this article by Robert Reich that conveniently (and blindly) ignores government behavior and the shortcomings of central planning while trying to lambaste critics of Obama's healthcare plan.

Me: Obama's plan is not a compromise when the government can then use taxpayers' money to knock the private players out of the market, thus becoming the only game in town. Private players have to use investor's funds and make smart business decisions in order to stay in business. Gov't gets to use taxpayer's money at a deficit to write off the bad business decisions that are inevitably made. Public/private hybrid is a shell game.

And socialized healthcare only "works" in the military because the military is an authoritarian organization, and because it is a really a relatively small-scale operation. If you want to see the effects of a nationalized healthcare system, go to Great Britain. It will scare least, it should. You'll also see that those in power don't go to the same crappy hospitals as the lowly proletariat. Obama will never have to worry about waiting 8 hours in an ER with a kidney stone before being seen even once (like my mom did at a British hospital).

Economics says subsidized health care will suck, too. When the price for something artificially goes to zero (via govt subsidy), demand increases unnaturally. When you subsidize health care for people, people will go to the doctor for things they otherwise wouldn't consider to be "worth it." Hospitals become overcrowded, doctors can get overworked, you lose talent because some people who would've become would-be doctors don't see enough incentive in it anymore...these are all just some of the ill effects of a socialized system.
And regardless of all this, how can the title of this article say the critics are wrong and then acknowledge that their opposition is out of economic self-interest?! Who the 'f' is the author to decide that the subject critics already make too much money and should suck it up and make less? We owe the amazing technological advancements in our society today to the economic self-interest of the free citizens of the freest country the world has seen...take that away, and society regresses to the Stone Age (a la the Soviet Union and the countless other failed experiments in "socialist idealism").

C: I'd rather wait 8 hours than not be able to go at all. Millions of people can't even afford to go in the first place. I'd be willing to bet they'd rather wait in line for hours and at least be able to be seen.

I hear scare tactics from people all the time about "oh, go to Canada/Japan/Great Britain/etc. and see what you think", but I know people in Canada, and they say that their health care works, and yeah, they may have to wait sometimes for less common procedures, but they can still get them, and they've never had to agonize over the decision to take their kids to the doctor when they're sick.

Also, people wait here for appointments, too! My mom broke her foot and it was 7 weeks before she could see an orthopedist.

Let's say for the sake of argument that you're right, Ben (which I don't think you are). What do we do, then? Poor people just don't deserve to see doctors? You're really ok with that??

Me: C, you say "you're not willing to let people die...", then you and other like-minded citizens should organize an effective charity for these uninsured. If it's a popular-enough cause, it will be a raving success, and as private investors/contributors, you'll certainly have the incentive to get involved and make sure it is run efficiently so as not to waste your money.

When you use the government, you take everyone's money at the point of a gun and force your moral dilemma and judgment on everyone, which runs counter to the principles of liberty and freedom that this country was founded on. It is downright immoral to rob persona A's money (which is what person A earned in exchange for their life's work) and give it to person B without person A's consent. Liberals are always so "charitable"...when it's other people's money they're spending.

C: Nobody is taking my tax money at the point of a gun. The truth is, we live in a society, and as members of that society, we have obligations to one another. Should we privatize all schools, too? Why is it that we as a society see the real benefit that comes from providing public education, but not public health? The failed logic behind that ... Read Moreboggles my mind. Our society benefits when its people are healthy and educated. For the life of me I can't see why we WOULDN'T make healthcare affordable to everyone.

And the whole charity suggestion is flawed. People as a rule aren't charitable enough. They're selfish. They're only willing to part with their money when they have to. What if there weren't enough charitable donations to cover health care? Again, poor people should just suck it up and die quietly because they were unfortunate enough to get sick? Your lack of compassion astonishes me.

Me: The facts don't support your claim that my charity suggestion is flawed. Economic studies have shown that as overall wealth increases (for individuals and society as a whole), charitable giving increases. Don't pass judgment on my "lack of compassion." I have plenty. I give to a couple of different health-related charities (St. Jude's and Shriners). What I *also* care about, though, is liberty and allowing people to make the choice of whether or not to provide other people's health care for them. We Americans are incredibly charitable. More was given to private charity for the Indonesian tsunami relief as well as Katrina than the federal gov't provided. And the private charities do a better job (Exhibit A: FEMA). If we reduce the amount of taxes the gov't takes and increase everyone's wealth, there will be more disposable income for people to be charitable with.

... And it is the point of a gun when it's the government taking the money. Nobody can choose not to pay their taxes...the penalty is jail-time. That *is* taking people's money at the point of a gun.

There are far better ways to "fix" healthcare. First off, deregulating insurance companies in a number of areas would greatly help. Many regulations were put in place at the behest of certain insurance lobbyists as a form of protectionism against others in their own industry. The result is a system where people cannot buy insurance from a limitless number of suppliers...the supply is controlled via regulation, which then drives prices higher.

Also, another factor into high healthcare costs is the insurance that doctors/hospitals have to take out on themselves in the event they are hit with a malpractice suit. Getting rid of frivolous malpractice suits would help pull the pendulum out of that wall.

There are ways to make healthcare better without bringing about the ill effects of a socialist system. Relying on gov't to force everyone to be charitable is lazy and shortsighted, as it ignores the unintended consequences that come with all centrally planned systems.

And your argument about public versus private education is specious...the education system is sufficiently complex that it can't really be compared with the equally complex healthcare system. Yes, it's true that some basic amount of education for all benefits society. Then again, how many parents don't give a rat's ass about how their kid does in school since they don't see themselves as personally invested in it? I went to public schools, too...they can succeed. But many of their failures could be chalked up to a lack of competition. That is, public schools don't *really* have to compete with any other school system to get $. A parent who wants to pay to send their kid to a better private school still has to pay property taxes to cover local school system costs, in addition to the private tuition. I'm not advocating the complete privatization of schools (yet...still have to think more about all the options), but I can at least see how adding a privatized aspect to school systems (like school choice and voucher programs) would serve to benefit individuals and society as a whole.
The same thing goes for healthcare. Removing regulation on the system, which only serves to protect special interest groups, including doctors, insurance companies, pharmaceuticals, who are already in the game, would take the system closer to perfect competition, which would result in better and cheaper healthcare.

For example, why does the FDA have a monopoly on what we can and cannot be prescribed? That's another HUMONGOUS reason why healthcare costs so much...the development costs of bringing drugs to market (along with associated costs like buttering up FDA officials) is huge. This is largely due to the regulatory beast and the risk of a drug not getting "approved" (companies have to make up for the losses they incur on drugs that don't get approved). Oftentimes, they just didn't schmooze the FDA well enough. Why can't a cancer patient who is terminal decide whether he/she is willing to try a potential breakthrough drug?? If anything, remove that regulatory function and open the market up to "certification" companies, who would provide the assurance about a particular drug.

An example of this in another industry is Underwriters Labs, who certifies that electrical devices have met certain specifications of safety and reliability. We could have those for drugs, and then people (and doctors) could decide what amount of certification they would require for their risk tolerance. One side benefit of this would be a better informed public.

These are just some ideas that would work better than a socialist system. Sorry for the rant, but imho, socialism runs counter to so many aspects of human nature that have made us great. Bringing people down to the least common denominator is immorally repugnant to me, and that is ultimately what happens in socialism. Also, central planning results in inefficiency and corruption, among other ills I've mentioned. Why not hold Obama and Congress to a higher standard of thinking though healthcare system reforms that really make the system better and don't just lazily rely on the Nanny State to "take care" of us.

C: I'm leaving now to go to the park with my kids, but quickly wanted to say that I don't disagree with you that there are innumerable things that need to change in the current healthcare system, but I disagree with some of the things you're suggesting. I think if anything we need more regulation, not less. And absolutely we need to reduce the power of lobbies. Also, I'm not talking about the government taking over the entire industry. Honestly, I don't think anyone is, but it's something the right likes to throw around, along with the "socialism" fearmongering, to rile people up and scare them away from progress in this area. All I would like to see is something along the lines of an extension of Medicaid to a larger portion of the population. I don't think everyone in America should get free healthcare, but I think we need to make it realistically affordable. That's all. what we have now isn't working.

Yes, some people do give to charity, but it's to very targeted groups such as the Shriners and St Jude's, and primarily serves the needs of children with life threatening illnesses. It's the average kids who are falling through the cracks. It's also worth nothing that the Shriners are closing down a bunch of their hospitals due to lack of donations. I don't believe that if we did away with Medicaid, the American population would step up and donate enough to cover the costs privately.

I also agree with you wholeheartedly that we need to overall our torte [sic] system and stop letting people sue for malpractice at the drop of a hat. You don't know me, obviously, but I've been very vocal about that for years.
All right, leaving for the park now. Best to you.

Me: How is more regulation going to help anything? The current rules in the insurance industry are stifling competition, which means they are driving up costs. Adding more regulation just makes the system more prone to interference from politically connected lobbies and will elbow out newer competitors before they have a chance to get established and make their product available.
Like I said before, a public/private hybrid can only have one conclusion, and that's government takeover. Private companies can't compete with the govt's coercive power to take more and more "investment capital" to cover up for their poor business practices. And they can't compete with the "company" that makes the rules of the game. I'm not fear-mongering here, I'm simply applying logic and history (I'm also not "on the right," as I'm very much an independent).

I agree what we have now isn't working, but there are options that don't involve stealing from person A to give to person B or making people used to the idea of relying on the Nanny State to take care of them.

Best to you, too, Cheryl.

Also, just fyi, the Shriners *may* need to close some hospitals due to operating costs and donations, but part of that is also due to the economy, which is causing their endowment to not provide returns as much as in previous years. The Shriners Board hasn't officially decided how to try to combat the problem yet, though.

Also, one option they would like (billing third-party insurers for those who do have insurance) doesn't make sense for them yet because...... the convolutedness of the current regulations on the insurance industry. (Just sayin'.)


  1. I haven’t followed the article link, but here are some points generally related to your and your friend’s discussion:

    1. We can all trade personal anecdotes ad infinitum about how this or that non-U.S. country’s more socialized health care is better or worse than the American less socialized health care. (Or about Massachusetts vs. the rest of the country. Or about U.S. civilian health care and U.S. military health care; as with the national comparisons, I bet many of us have heard stories that, taken collectively, favor both.) Anecdotes may win elections, but they don’t solve problems (and they almost never fairly represent an issue).

    2. Taxes are the result of laws, which are made mostly by legislators, who are (theoretically freely) elected by the people. Unless there is added to the Constitution a right not to be taxed (it has happened), the people are free to vote for representatives who will tax them to the highest degree.

    3. No, other countries don't have it perfect. Nor, contrary to what seems popular belief on both sides, are non-U.S. countries some homogeneous mass. Austria, for example, if I remember right, doesn't socialize the payment of the middle-class person's dental and ocular bills, while surely some other countries do; and (again, my knowledge may be off) private practice is allowed in Britain but illegal in Canada. But what's clear is this: as time goes on, Americans are paying more money (as a portion of income) and getting less health (in certain measures) than they used to—and they're definitely paying more money (as a portion of income) and getting less health (in nearly all measures) than people in important other countries. Countries whose citizens were less healthy than Americans were, back when probably no country had much government involvement in health care, now have higher average health than the U.S. has. Things aren't working perfectly elsewhere—but they're sure not working great here either. In fact, according to the ultimate measure, things are worse here. We can blame past and present Congresses, presidents, judges, litigants, doctors, television producers, restaurant chains, auto makers, &c., &c., &c.—but, whomever we blame, we need a change. What we've been doing for the last 200+ years is only failing more and more tens of millions of Americans, especially in comparison to similar peoples elsewhere on the Earth. We need lifestyle changes, and we need changes in government's involvement. Trying something else (I don't claim to have a clue what the specifics of it should be) for a few years won't be the end of the world.

  2. By the way, I wanted to commend you and C for having something too rare: a debate that's real and that's civil. Quite enjoyable to witness.


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