Stossel Solves the Health Crisis with Capitalism

[ThunderChunky]

It's stupid that most people get their insurance through an employer. Employers should just give that money to people and let them get their own insurance. Unfortunately, people really want the "benefits." They see it as a good thing.

 

[themusicteacher]

That's the trouble with the whole set-up. I don't think there's another country in the developed world where you lose healthcare coverage when you leave your job. Where people are forced to stay in jobs they'd rather move on from, entirely from fear of being without health insurance.

It's completely bizarre, and I don't know why so many people in the USA seem to be content with the situation.

Rolfe.

If you're not working temporarily when you lose you job or move to another but you get to keep your healthcare at the rates you had before, that's socialism. Why can't you see that? It's good for America when people live in abject fear of healthcare costs. Every right-thinking republican/libertarian knows this - it's as sacrosanct as apple pie and trickle-down economics.

 

[YoPopa]

It's stupid that most people get their insurance through an employer. Employers should just give that money to people and let them get their own insurance. Unfortunately, people really want the "benefits." They see it as a good thing.

The problem in this regard was started by the IRS when they decided decades ago that the insurance benefit would not be taxable as part of wages or salary. That means that the employee gets more if they take the benefit package than they do if they take the money.

What should happen is that individuals should get the same tax break as corporations when they buy their own insurance. That would make insurance more affordable for the self employed or unemployed.

 

[pipelineaudio]

A lot of the senior plans still have the provision that you can demand name brands when generics are available. Don't know if Stossel covered that, but its a very giant, elephant sized biggie when it comes to gobbling up the money and jacking up premiums

 

[3point14]

A lot of the senior plans still have the provision that you can demand name brands when generics are available. Don't know if Stossel covered that, but its a very giant, elephant sized biggie when it comes to gobbling up the money and jacking up premiums

Good god, why??

What possible justification for this is there beyond 'it makes more money for the drug companies.' I admit, this one's not quite as baffling as the 'medicare (or the other one, perhaps) will be utterly hamstrung during any supply negotiation. What justification beyond pandering to large pharmacutical companies is there for the government (or the insurance company) to act so blatantly against the interests of those it serves?

 

[Rolfe]

To play devil's advocate, it has been shown that the placebo effect generted by the big name brand can significantly enhance the effects of a drug. (I know, I was surprised too.)

But you're right, it's still brain-dead.

Rolfe.

 

[Toke]

Here pharmacists are required to hand out cheapest generic alternative unless the doctor give specific instructions to use the brand name.

The drug company response is to change dosages/pill size and pricing lists monthly/quarterly?
It does lead to confusion and mismedication, particularly for older patients.

 

[Rolfe]

Same thing here. The doctor always has discretion to specify a particular brand, but they are discouraged from doing that unless they have a compelling reason.

Rolfe.

 

[3point14]

Same thing here. The doctor always has discretion to specify a particular brand, but they are discouraged from doing that unless they have a compelling reason.

Rolfe.

I like it when I turn up at the pharmacy and the pharmasist tells me that the off the shelf version is cheaper than the prescription charge so I can get that one.

 

[Rolfe]

Apparently they're not supposed to do that!

Here, the prescription tax is only £3, so it doesn't happen so often anyway.

Rolfe.

 

[3point14]

Apparently they're not supposed to do that!

Here, the prescription tax is only £3, so it doesn't happen so often anyway.

Rolfe.

I didn't know that. Is it recent? Ithasn't happened to me for years. Then again, I'm less ill than I used to be.

 

[Skeptic Ginger]

The problem in this regard was started by the IRS when they decided decades ago that the insurance benefit would not be taxable as part of wages or salary. That means that the employee gets more if they take the benefit package than they do if they take the money.

What should happen is that individuals should get the same tax break as corporations when they buy their own insurance. That would make insurance more affordable for the self employed or unemployed.

I've been self employed for over 20 years. The health insurance deduction has changed multiple times over that time, but there is currently (and has been for a few years) a tax deduction for what I spend on health insurance. There has been a deduction in all but a couple years IIRC.

 

[Skeptic Ginger]

It's stupid that most people get their insurance through an employer. Employers should just give that money to people and let them get their own insurance. Unfortunately, people really want the "benefits." They see it as a good thing.

I'm pretty sure it is the insurance industry that lobbies to keep the status quo.

In times of high unemployment, workers are not in a position to demand benefits. Look at how Microsoft has gotten around offering benefits. They call everyone contractors and every 18 months or so contract employees have to take 3 months off so they don't meet labor law rules as regular employees. (There wasn't previously a law that regular employees had to be given health insurance, but the employer does have to pay worker's comp insurance at the state law, and unemployment insurance at the federal level.)

I heard Obama comment that the system of employer provided health insurance was too entrenched to change. It makes no sense to provide health insurance this way because it ends up being a trade disadvantage making foreign labor cheaper because the government subsidizes employee health care. But for whatever reasons the insurance industry appears to be able to out-lobby the export industries over this issue.

Too bad someone can't get the libertarian Tea Party folks to take up the cause of changing the system for the sake of fair trade.

 

[Skeptic Ginger]

Going back to hte basic idea in the OP.

The free market is great at optimising efficient resources where the efficient provision of these resources is aligned with the most efficient production of profit. If you are adding another layer of intermediate trader into the system, then for the free market version to be cheaper, any inefficiency of a state-provider has to be greater than the cut that these people take. I believe Rolfe has posted elsewhere that the cut in the US system is estimated at more than 30%. That is a lot of efficiency to find from elsewhere in the system. These efficiency savings will only be looked for if the most efficient route to profits is the efficient provision of healthcare, as opposed to (say) insuring low-risk people and employing other people to find reasons for refusing expensive treatment.

In health care provision, certain patients will need expensive treatment. By nature of their illness, these are also likely to be less able to work, so have fewer funds. In a free market system, the ideal situation from a provider's point of view would be for its competitors to provide coverage for such people. The worried well, on the other hand are good to provide coverage for.

The big insurance companies initially decreased cost of premiums to compete. But they either reached the limit there or simply discovered a more profitable technique of dumping coverage or denying claims when individuals needed care. Wendell Potter testified about the profit motive resulting in horrible outcomes, not "market based solutions" in the health insurance industry. People like Stossel and the other Libertarians only look at the theory and don't look at the theory in practice. Or if they do look at the market in practice, Libertarians rationalize all the problems are due to government interference with the free market. It amount to mind boggling denial.

 

[jimbob]

The big insurance companies initially decreased cost of premiums to compete. But they either reached the limit there or simply discovered a more profitable technique of dumping coverage or denying claims when individuals needed care. Wendell Potter testified about the profit motive resulting in horrible outcomes, not "market based solutions" in the health insurance industry. People like Stossel and the other Libertarians only look at the theory and don't look at the theory in practice. Or if they do look at the market in practice, Libertarians rationalize all the problems are due to government interference with the free market. It amount to mind boggling denial.

But they don't even look at it in theory. Their analysis is more simplistic than Adam Smith's

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.
Book I, Chapter X, Part II, pg.152

Whenever the legislature attempts to regulate the differences between masters and their workman,its counsellors are always the masters. When the regulation, therefore, is in favor of the workmen, it is always just and equitable; but it is sometimes otherwise when in favor of the masters.
Book I, Chapter x, Part II, pg.168

It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.
Book V, Chapter II, Part II, Article I, pg.911

I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities, that is, in proportion to the revenue which they respectively enjoy under the protection of the state.
Book V, Chapter II, Part II, pg.892

And some more

In the long-run the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate.
Book I, Chapter VIII, pg.80
We rarely hear, it has been said, of the combinations of masters, though frequently of those of the workman. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject.
Book I, Chapter VIII, pg.80

A great stock, though with small profits, generally increases faster than a small stock with great profits. Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little.
Book I, Chapter IX, pg.111
Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.
Book I, Chapter IX, pg.117

 

[Rolfe]

I didn't know that. Is it recent? Ithasn't happened to me for years. Then again, I'm less ill than I used to be.

It's only £3 in Scotland. £0 in Wales. I'm not sure what it is in England at the moment.

Rolfe.

 

[pipelineaudio]

What justification beyond pandering to large pharmacutical companies is there for the government (or the insurance company) to act so blatantly against the interests of those it serves?

They're not pandering to the drug companies, they're pandering to the AARP. You should never be surprised by the common man's enthusiasm for working directly against his own best interest

 

[jimbob]

It's only £3 in Scotland. £0 in Wales. I'm not sure what it is in England at the moment.

Rolfe.

£7.20

 

[fitzgibbon]

Going back to hte basic idea in the OP.

The free market is great at optimising efficient resources where the efficient provision of these resources is aligned with the most efficient production of profit.

Maximum inflow, minimum outflow. There's a sure way to make sure that the general working populace is maximally available to be contribute to the GDP.

In health care provision, certain patients will need expensive treatment. By nature of their illness, these are also likely to be less able to work, so have fewer funds. In a free market system, the ideal situation from a provider's point of view would be for its competitors to provide coverage for such people. The worried well, on the other hand are good to provide coverage for.

You aren't making much of an argument in favour of the U.S. system, JB. Spreading the cost of the unusual expensive patient over as wide a network of otherwise-healthy ones would seem to me to create the least overall inconvenience. If the cost to me as a generally healthy person to know 6hat nobody's being denied required health care is a few bucks a month, what sort of cheapskate do I need to be to rail against that?

Clearly, the U.S. system is less efficient overall because more effort is diverted from the provision of treatment to the creative denial of said treatment. If so much energy and effort is channelled away from overall economic productivity into maximizing the profit of an insurance company, how can you believe that this represents the best societal outcome?

 

[fitzgibbon]

It's completely bizarre, and I don't know why so many people in the USA seem to be content with the situation.

Rolfe.

I wouldn't go so far as to qualify them as "content" with the situation so much as cowed into an irrational fear of the alternative.