Stossel Solves the Health Crisis with Capitalism

[Rolfe]

I wish Dan would come on here again, I'd like to know whether his thinking has changed any.

I still don't get it. The car analogy.

Universal systems: We have cars for everyone, depending on what they need - Volvo, Volkswagen, Ford, Lexus, Peugeot, you're supplied with what you need to get about.

America: But here, you can buy a top-of-the-range Rolls Royce! Rich people even choose to come here because our Rolls Royces are so good.

Universal system: But look, quite a lot of your people are walking....

America: That's not my problem, I resent your trying to force a system on me where I'd have a Lexus instead of a Rolls Royce.

Universal system: Well, if you're so rich, you can still buy a Rolls Royce if you want one.

America: No, I scorn your Lexus and your Volkswagen. Everyone should have a Rolls Royce. All we need to do is figure out how to make Rolls Royces cheap enough so that absolutely everyone can buy one.



How do you reduce the price of something so inherently costly as complex medical and surgical treatment so that it's on the same level as a can of beans? And at the same time avoid open revolt by healthcare professionals who of course want to go on earning what they're earning right now.

I mean, seriously.

Oh yes, and in what way was the care Abigail got not of "Rolls Royce" quality? Could she have got any better care if she had been a US citizen? And if she had been a US citizen, would she have been guaranteed that level of care, irrespective of who her parents were? I keep asking the US private healthcare proponents this, I've been asking it off and on since I read the story in the dead-tree paper over a year ago,and I haven't had one single reply yet. (Apart from a rude remark about her mother's teeth.)

Rolfe.

 

[Tim Moen]

My problem with UHC is primarily ethical and results from my lack of belief in positive rights (the notion that I must be coerced to provide some service or resource to someone else):

1) Money should not be extorted from one individual and given to another.
2) Physicians, or anyone who provides any service really, should not be compelled to work against their will, or charge prices against their will. Coercion is unethical and counterproductive in the long run.

As a Canadian healthcare worker for the past 16 years, I've seen what I consider to be a steady decline in healthcare in general. I attribute this to the increasing socialization. When you work for the state your incentive is not the same as when you work for the person you are trying to cure. The result is a growing bureaucracy, increased health spending, increased hospital wait times (the University of Alberta hospital recently found a guy with rigor mortis waiting in a chair... for real). For at least the last 6 years political rhetoric about the looming healthcare crisis has been on the increase. The average wait time in ER in Quebec is something like 13 hours, and in one Montreal hospital its 29 hours.

Recently, with the discovery of a suspicious growth in one of my lymph glands I've gotten to see the patient side of our health system. It took me a month to get in and see a physician, to get a referal to wait an additional 3 months to see a surgeon to get a biopsy. If I had the choice I would have paid extra money to get faster service, but its actually illegal for me to try and buy private healthcare in my country. So I'm stuck with service that is mediocre at best, even though I contribute about $7000/year into the health system through my taxes. I'm pretty sure I could have spent the money on my own health a little more wisely, or, bought pretty high-end insurance.

Rolfe, you aptly point out that healthcare is not an abundant resource. Its scarce, and with our population aging its only getting more scarce. Is it your contention that Marxist principles are the best way of dealing with a scarce resource? I'm more convinced by the Austrian school of economics. It seems much more plausible that individuals can determine the value of a scarce resource much more efficiently than some central bureaucracy, since its the individual themself who has to buy it or produce it.

 

[Ivor the Engineer]

<snip>

When you work for the state your incentive is not the same as when you work for the person you are trying to cure.

<snip>

With private healthcare the people treating you will probably not be working for you, but a much larger profit-driven corporation, to which you are considered as a source of revenue first, and a patient with healthcare needs second.

How will physicians, working to maximise their own or the corporation's profit, be incentivised to provide superior care to physicians employed either directly or indirectly by the state, which can link their remuneration to healthcare outcomes?

 

[Francesca R]

Is it your contention that Marxist principles are the best way of dealing with a scarce resource?

Whoa I think this is a distortion of views, although I can't speak for Rolfe.

We are to all intents and purposes discussing the provision of healthcare insurance not the provision of health services themselves. See other threads for this. Health services can be and are provided on the open market in many UHC systems. The compulsory-participation, state-financed insurer merely buys it. This has been covered in depth.

The basis of insurance is everybody pitching into a pool from which the unlucky are then compensated according to their un-luck and the lucky are charged according to their luck. Although I can see a parallel with Marxism, it is not Marxism. Nor it is per se about the allocation of scarce resources. As much insurance can be provided as is demanded. (There is a special case--also covered in depth elsewhere--in that health insurance suffers from adverse selection, which is why voluntary insurance is more expensive than compulsory)

 

[Darat]

...snip...

Is it your contention that Marxist principles are the best way of dealing with a scarce resource? I'm more convinced by the Austrian school of economics. It seems much more plausible that individuals can determine the value of a scarce resource much more efficiently than some central bureaucracy, since its the individual themself who has to buy it or produce it.

I can't speak for Rolfe (but I'd be surprised if her view was much different from mine).

Your question is simply nonsense, I don't care what "ideology" you have or what someone wants to impose I simply want what works best for my society. And no ideology will deliver that. What will deliver is people coming up with pragmatic solutions to the problems that actually occur in the real word, and guess what? So far the best solutions are universal health care systems.

 

[Tim Moen]

With private healthcare the people treating you will probably not be working for you, but a much larger profit-driven corporation, to which you are considered as a source of revenue first, and a patient with healthcare needs second.

How will physicians, working to maximise their own or the corporation's profit, be incentivised to provide superior care to physicians employed either directly or indirectly by the state, which can link their remuneration to healthcare outcomes?

I agree with you. I don't recognize the validity of corporations to exist. You can't create a limited liability entity that allows individuals to absolve themselves of accountability. This is no different than creating an imaginary friend to take the blame when things go wrong.... no good can come of this. I wouldn't consider it private healthcare if corporations were involved.

I think in a free market I would pay more to see physicians who had the highest cure rates. Physicians should be able to maximize their profits, this would drive the incentive to cure higher and higher.

 

[Rolfe]

I'll let what Francesca said stand, as it seems to sum up the matter pretty well.

I also don't understand the remark about healthcare being a scarce resource. It can be an expensive resource, depending on how your luck turns out, but it isn't inevitably scarce. Indeed, we're often told about the overcapacity in the US system. In veterinary medicine, also, supply appears to keep pace with demand pretty well (this was also shown in the Stossel film).

Every example you look at suggests that so long as you're prepared to throw enough money at it, the healthcare supply is unrestricted. People with good insurance cover in the US, people in Britain who have the money to pay for private treatment, nice middle-class people who want to look after their pets well. Hey presto, no scarcity.

This is where Stossel might have had a point if he'd approached it differently. Those funding universal healthcare systems are usually disinclined to throw unrestricted amounts of money at them. Thus, if the balance is wrong (which is not unusual), healthcare may look as if it's a scarce resource - when in fact it is only the money that is the scarce resource.

Now where that point would collapse if Stossel were to present it like that, is that when you add up everything the USA spends on healthcare (Medicare, Medicaid, all the insurance systems, and the self-pay component), the total is absolutely staggering. Massively in excess of what any universal system is paying to get treatment for all its citizens. If the same amount of money could be administered with any reasonable degree of efficiency with the sole aim of delivering healthcare to the population as a whole, everybody in the USA would be able to have the healthcare equivalent of the top-of-the-range Rolls Royce.

The main criticism of universal healthcare systems is that people don't like paying taxes, and governments like to cut tax. As a result, there is a tendency for such systems to be underfunded. Thus healthcare appears to be a "scarce resource", and complaints of unmet entitlement arise.

There are two solutions to this. One is simply to pony up more money. Voters make it clear that they are in favour of more healthcare spending even if it means they don't get that tax reduction they hoped for, or maybe even if it means not invading somebody else's country next time the administration thinks it wants to flex its international muscle.

The other is to allow citizens to purchase additional healthcare using their own resources. I simply have no idea what the hell is going on in Canada. Some people declare that is illegal there, while others declare that is not the case and that it goes on all the time. I've never been to Canada. However, I would caution against using a possible defect in one particular universal healthcare system to reject all universal healthcare systems on principle.

Rolfe.

 

[Tim Moen]

I can't speak for Rolfe (but I'd be surprised if her view was much different from mine).

Your question is simply nonsense, I don't care what "ideology" you have or what someone wants to impose I simply want what works best for my society. And no ideology will deliver that. What will deliver is people coming up with pragmatic solutions to the problems that actually occur in the real word, and guess what? So far the best solutions are universal health care systems.

Well since I have a lump in my lymph glands, I would prefer what works best for me as opposed to what works best for some ethereal concept called society. So if the state would be so kind as to get out of my way so I can give a physician some money to see me I would be much obliged. I've got the problem the physician has the solution and the state is in my way... seems pragmatic to me.

 

[Rolfe]

My problem with UHC is primarily ethical and results from my lack of belief in positive rights (the notion that I must be coerced to provide some service or resource to someone else):....

Well, my problem with the absence of universal healthcare is primarily ethical as well, and results from my belief that in a rich western democracy, nobody should have to die of a treatable disease no matter how unlucky or even improvident they may have been. We seem to have conflicting ethical views here.

Rolfe.

 

[Darat]

Well since I have a lump in my lymph glands, I would prefer what works best for me as opposed to what works best for some ethereal concept called society.

...snip...

You are the ethereal concept called society.

 

[Ivor the Engineer]

I agree with you. I don't recognize the validity of corporations to exist. You can't create a limited liability entity that allows individuals to absolve themselves of accountability. This is no different than creating an imaginary friend to take the blame when things go wrong.... no good can come of this. I wouldn't consider it private healthcare if corporations were involved.

I think in a free market I would pay more to see physicians who had the highest cure rates. Physicians should be able to maximize their profits, this would drive the incentive to cure higher and higher.

This is la la land thinking. Modern healthcare (and every other technology) requires more knowledge, ability and technology than any one physician (or engineer or scientist) could possess.

 

[Rolfe]

Recently, with the discovery of a suspicious growth in one of my lymph glands I've gotten to see the patient side of our health system. It took me a month to get in and see a physician, to get a referal to wait an additional 3 months to see a surgeon to get a biopsy. If I had the choice I would have paid extra money to get faster service, but its actually illegal for me to try and buy private healthcare in my country. So I'm stuck with service that is mediocre at best, even though I contribute about $7000/year into the health system through my taxes. I'm pretty sure I could have spent the money on my own health a little more wisely, or, bought pretty high-end insurance.

Well since I have a lump in my lymph glands, I would prefer what works best for me as opposed to what works best for some ethereal concept called society. So if the state would be so kind as to get out of my way so I can give a physician some money to see me I would be much obliged. I've got the problem the physician has the solution and the state is in my way... seems pragmatic to me.

If this is a true account of the Canadian system, it's broke. Just as broke as the US system. However, since you woud not be having that problem in most of the other universal healthcare systems to be found around the world (have a look at France, for example), then I don't really see how it can be used as an argument against universal healthcare in general.

As Darat said, you are society. The system that is supposed to benefit you when you need it is not delivering. However, that is a problem with the specifics of the system you are operating under, and not necessarily common to all universal systems.

Rolfe.

 

[Tim Moen]

I'll let what Francesca said stand, as it seems to sum up the matter pretty well.

I also don't understand the remark about healthcare being a scarce resource. It can be an expensive resource, depending on how your luck turns out, but it isn't inevitably scarce. Indeed, we're often told about the overcapacity in the US system. In veterinary medicine, also, supply appears to keep pace with demand pretty well (this was also shown in the Stossel film).

Every example you look at suggests that so long as you're prepared to throw enough money at it, the healthcare supply is unrestricted. People with good insurance cover in the US, people in Britain who have the money to pay for private treatment, nice middle-class people who want to look after their pets well. Hey presto, no scarcity.

This is where Stossel might have had a point if he'd approached it differently. Those funding universal healthcare systems are usually disinclined to throw unrestricted amounts of money at them. Thus, if the balance is wrong (which is not unusual), healthcare may look as if it's a scarce resource - when in fact it is only the money that is the scarce resource.

Now where that point would collapse if Stossel were to present it like that, is that when you add up everything the USA spends on healthcare (Medicare, Medicaid, all the insurance systems, and the self-pay component), the total is absolutely staggering. Massively in excess of what any universal system is paying to get treatment for all its citizens. If the same amount of money could be administered with any reasonable degree of efficiency with the sole aim of delivering healthcare to the population as a whole, everybody in the USA would be able to have the healthcare equivalent of the top-of-the-range Rolls Royce.

The main criticism of universal healthcare systems is that people don't like paying taxes, and governments like to cut tax. As a result, there is a tendency for such systems to be underfunded. Thus healthcare appears to be a "scarce resource", and complaints of unmet entitlement arise.

There are two solutions to this. One is simply to pony up more money. Voters make it clear that they are in favour of more healthcare spending even if it means they don't get that tax reduction they hoped for, or maybe even if it means not invading somebody else's country next time the administration thinks it wants to flex its international muscle.

The other is to allow citizens to purchase additional healthcare using their own resources. I simply have no idea what the hell is going on in Canada. Some people declare that is illegal there, while others declare that is not the case and that it goes on all the time. I've never been to Canada. However, I would caution against using a possible defect in one particular universal healthcare system to reject all universal healthcare systems on principle.

Rolfe.

Thanks for taking the time to explain your position, Rolfe. I hear what you are saying about healthcare not being a scarce resource. In a free market supply usually rises to meet demand (the heavily regulated US is obviously not a free market). The top cardiothoracic surgeon in the country is a scarce resource however. There is only one of him. In a freemarket the surgeon who possesses the skills and faculties to perform the surgery decides who to operate on based on his values... whether it be money or altruism... his motivation is his motivation a bureaucrat can't change his motivation.

This to me is the inherent flaw of any system that attempts to control patient/doctor interactions. For example in Canada a General Practitioner is paid a flat rate for each patient visit. The incentive here is to get patients in and out as quickly as possible to earn the maximum money, thus the physician that takes the time to engage the patient is the exception as opposed to the rule. Now of course you could argue that Canada just has the wrong kind of UHC, but, there will always be unintended consequences creating inefficiencies when you try and guess motivations and incentives of physicians and patients.

I will say this to clear up some of the confusion about the legalities of buying private medicine in Canada. There are some approved private operations. For example I can jump the 6 month UHC MRI queu by paying to go to a private MRI clinic in Alberta. I think there is an orthopedic surgery clinic in Vancouver that is private as well. I cannot legally pay a physician to treat me outside of these approved sites. There was a huge stink in Alberta about the opening of this MRI clinic also. Protests came mostly from healthcare unions decrying the evils of a 2 tiered health system.

I also have no problem donating my money to pay for healthcare for the less fortunate. For example if my family doctor said he was going to increase his rates so that he could treat a certain number of pro-bono cases I wouldn't have a problem with it. If I found he was treating people that were unhealthy because of poor life choices (ie chain smokers, drug addicts etc.) I may switch to a physician who treats underpriviledged children pro-bono instead. Throwing money at government to fix the problem seems like it would be counterproductive to me... my physician holds the solution to healthcare not the government. Can you think of any productive government departments?

 

[Tim Moen]

Well, my problem with the absence of universal healthcare is primarily ethical as well, and results from my belief that in a rich western democracy, nobody should have to die of a treatable disease no matter how unlucky or even improvident they may have been. We seem to have conflicting ethical views here.

Rolfe.

I don't disagree that people should not have to die, and I would certainly donate time and resources to help cure disease. I think our ethical disagreement stems from our understanding of rights. I believe that everyman has the right to autonomy... to be left alone. Your advocation of a positive right like healthcare requires the belief that coercion is okay in some cases. I think coercion is unethical and in fact is counterproductive if the desired result is a healthier society.

 

[Tim Moen]

This is la la land thinking. Modern healthcare (and every other technology) requires more knowledge, ability and technology than any one physician (or engineer or scientist) could possess.

Of course. I didn't say anything to the contrary did I? Where is the la la land thinking you claim?

 

[Ivor the Engineer]

<snip>

I believe that everyman has the right to autonomy... to be left alone.

<snip>

Which is great if one happens to live on an island. In a developed society we depend on each other to perform certain tasks so we all can enjoy a higher standard of living. Alas, we have a drive to screw over our fellow man; to reap the rewards of team work while putting no effort into creating them. What should we do to get such people to toe the line? From your previous post it seems you have an idea:

I also have no problem donating my money to pay for healthcare for the less fortunate. For example if my family doctor said he was going to increase his rates so that he could treat a certain number of pro-bono cases I wouldn't have a problem with it. If I found he was treating people that were unhealthy because of poor life choices (ie chain smokers, drug addicts etc.) I may switch to a physician who treats underpriviledged children pro-bono instead.

So coercion is ok so long as you're not the person being coerced to change your behaviour?

 

[TriangleMan]

As an aside, while I would never claim that a Canadian health care system is the most amazing healthcare system ever, I do think that most Canadians highly value universal health care.

Any Canadians here remember the CBC's Greatest Canadian series a few years back? Remember who won?

 

[Ivor the Engineer]

Of course. I didn't say anything to the contrary did I? Where is the la la land thinking you claim?

The la la land thinking is that a single physician could be expected to effectively treat a patient suffering from, say, cancer.

Where is the physician going to get the drugs and machines to treat the patient from?
Which individual is going to be able to develop and manufacture the drugs?
Which individual is going to be able to develop and manufacture the machines?

The level of technology we enjoy today takes millions of man-hours of focused and coordinated effort to develop, construct and deliver. I'd be interested to see your plan of how you think human effort can be focused and coordinated without large "coercive" organisations with made-up rules.

 

[Tim Moen]

The la la land thinking is that a single physician could be expected to effectively treat a patient suffering from, say, cancer.

Where is the physician going to get the drugs and machines to treat the patient from?
Which individual is going to be able to develop and manufacture the drugs?
Which individual is going to be able to develop and manufacture the machines?

The level of technology we enjoy today takes millions of man-hours of focused and coordinated effort to develop, construct and deliver. I'd be interested to see your plan of how you think human effort can be focused and coordinated without large "coercive" organisations with made-up rules.

I never said that a single physician was an island. I never said that cooperating and pooling of resources was bad. Exceptional individuals working with other exceptional individuals has improved our world dramatically. I don't see why organisations of cooperative individuals would cease to exist just because coercion goes away. Anybody whose taken a leadership course has learned that the least productive teams are the ones that are being coerced.

 

[Tim Moen]

Which is great if one happens to live on an island. In a developed society we depend on each other to perform certain tasks so we all can enjoy a higher standard of living. Alas, we have a drive to screw over our fellow man; to reap the rewards of team work while putting no effort into creating them. What should we do to get such people to toe the line? From your previous post it seems you have an idea:



So coercion is ok so long as you're not the person being coerced to change your behaviour?

You've got a pretty loose definition of coercion. When I talk of coercion I'm talking about the threat of violence. Not patronizing a particular business because I don't like the way they operate doesn't seem coercive to me.