[ExI] public health care (was re:Dogs of immortality)

Lee Corbin lcorbin at rawbw.com
Thu Jul 17 21:52:47 UTC 2008


Tom reminds me of the unpleasant reality of my current predicament:

> Lee [wrote]
> 
>> It's called socialized medicine. First, by taxing the bejesus
>> out of everyone, only the very rich will still be able to afford
>> private health care, private doctors, and private hospitals.
>>
>> The rest of us will just have to take a number and pray.
> 
> Well, I hate to break this to the lovers of the US free market
> system, but unless you're rich, you *are* taking a number
> and praying. After all, your insurance will probably insist you
> go to an "approved healthcare provider", and make an
> appointment with them.

Yes.  It does.  The so called "insurance" is structured so that
even if I get a runny nose, it's covered. SO who was responsible
for the idiotic confusion of what "risk" and "insurance" actually
meant for centuries?  That I would really like to know.

To rehearse:  you get *insurance* to cover unexpected *risks*.
You make a bet with an insurance company that they and you
both hope you will lose.  You're betting that you'll have some
unforeseen catastrophic medical problem completely out of your
ability to cover, and they're betting that you won't.  If they win
---which, again, you both hope for---then you've lost all the
money you paid out in premiums.  If they lose (you "win") 
then some truly awful unexpected tragedy has struck. What
makes this highly sensible---and it's been highly sensible ever
since the 1500s when shipping insurance began---is the
non-linearity of utility. You, just like an ancient ship owner,
cannot afford to be ruined, so you take out insurance, even
though the mathematical expectation is that you'll lose money.

But in the U.S., the tragic role of government began in World
War II.  Because of lack of knowledge of basic economics,
it was thought that wage and price freezes would help the
war effort (even Marshall, so unbelievably brilliant in his
otherwise uncanny administration of the war, didn't realize
that the information conveyed by prices was information not
to be uselessly discarded---if you want to save more money
for the gas overseas, for example, then just outbid your
citizens for it, don't use force or coercion).

So the wage and price freezes kicked in.  So how could companies
possibly reward better workers, or offer increased wages when the
silly government said they couldn't?  Loopholes were devised: by
offering side benefits like health care and company paid insurance,
a way around the tax collectors was found. Naturally this distorted
the free-market mechanism---all screwing with liberty and freedom
of choice does.

I will, for the sake of the gentle reader (and to cover my own ignorance)
skip over the messy evolution following the war. Suffice it to say that
in the U.S. all insurance companies are unbelievably regulated. As you
say, we almost might as well have socialized medicine today. The
distortions and misalignment of incentives has progressed to the point
that insurance companies find themselves compelled to cover completely
predictable expenses, thus wiping out the means by which true 
competition lowers prices.  When your insurance company is going
to pay for it, why look for the cheapest provider?

> Your doctor's treatment will have to conform with what your
> HMO is likely to pay for, 

Yes, and guess who started the HMOs.  That's right, do-gooder
socialists in the 1960s who thought that they were smarter than
and could improve on the free market.

> and they will be aware that if they want to do anything new
> or expensive there's a risk it won't be covered. Also, when
> you get that emergency treatment or get cancer, you need
> to pray your claim won't be declined.

It's not quite that bad. Naturally, there will be disputes 
between you and your "private" insurance company
just as later there will be disputes between you and your
government about what will be covered.  The essential
point is that all the insurance companies, being extremely
tightly regulated, are very few and very similar. There is
no opportunity for you to switch to another company, or
for you to have heard from your friends, relatives, and
certification companies what companies have the best
reputations and clearest contracts.

> There you are, finding you or your family in a medical
> crisis, you go for treatment as fast as possible and
> submit the paperwork to the insurance company.

Yup, it's a mess.

> Unfortunately, some lovely person in the claims department*
> has to follow company rules and decline you due to
> something in the small print.

The government does it differently. You can have any operation
whatsoever, even if it costs 50 million dollars. You just go on
to the waiting list, that's all.  Price is no object, since the government
has an infinite amount of money eventually. They just can't pay for
it today.

Sorry---no time to attend to your further good arguments.

Lee




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