Ronin of the Spirit

Because reality is beautiful.

Health-care Debate IX

So, I was asked on the last post, what DO I support…

I believe in freedom, as defined by the Wiccan Rede: “If it harm none, do what you will.”

One of the freedoms we have is to buy and sell and start and stop business.  That’s a free market and it works like this: if there is demand, then the market supplies it.  The higher the demand the higher the price.  This makes sure the supply is never exhausted, because the higher the demand is the more the supply is rationed by price.  Its self regulating, efficient, and simple.  The only problem is amorality: the free market only follows the back half of the rede “…do what you will.” and completely ignores the the first part.  It’s self regulating nature does not include moral regulation. The free market is just a tool; it can be used for constructive or destructive purposes or for just sort of plodding along.

If all free markets were perfect markets, the market would need little moral guidance.  Simple things like: “You can’t buy or sell people” or “Only certain parties can buy and sell substance X” would be all the morality the market would need.  Perfect markets mean all actors are rational, there are no hidden costs, and the buyer and the seller both have all the information they need to make a rational decision.  The problem is, “free market” means free to be a perfect market, or a highly imperfect market.

Remember that a perfect market requires rationality of all actors?  What about when the market actors are highly irrational? In a disaster the price of staples tends to skyrocket in a free market.  Now, in a perfect market this would be a good thing.  Raising the price would ration access to the supply, ensuring that vital commodities only go those who really need them and preventing the exhaustion of supply.  Unfortunately, the first thing to run out at ground zero is rationality.  The people who can afford the goods at any cost by all of them (far more then they need).  They sit on top of their horde, and no one else gets any.  (This is why the government often controls prices and access to goods in an emergency.).

In fact, I think I can make the case that irrationality is the cornerstone of the free market.  There is no real, functional difference between a Chevy and a Pontiac, but people pay more for the Pontiac because they are irrational.  People pay hundreds of dollars for Nike shoes that cost the Nike corporation a few dollars to produce because they are irrational.  Brands, in general, are irrational.  People will tell you “I like this brand because it stands for X,Y, and Z.”  Actually it doesn’t.  Every brand stands for the exact same thing: money for the owners.  That’s it, nothing more nothing less.  Various CEO’s have actually been taken to court for trying to say they had a responsibility besides money for the owners.  The stock holders always won.

Because of irrationality, the free market fails to do what the perfect market does: lower the price to the lowest level the producer can sustain.  Instead, the free market produces a ladder of products with the cheapest and lowest quality going to the poorest and the most expensive and highest quality going to the rich.  In most of what we do, this is perfectly fine.   Jim Beam bourbon is about $15 a 3/4 liter.  Jack Daniels about $20, and thats just fine.  I absolutely support a free market for booze, because it’s not something anyone actually needs anyway.  I support a free market most of the time.  When it evolves to a perfect market thats even better, but often people are too bloody irrational for that.  That’s fine too. Freedom means the freedom to be irrational.

I think, however, that health-care is good case for government involvement.  This is because the ladder will apply to health-care.  The rich will get the very best doctors, and the poor when they can afford them at all, will get the very poorest.  I think that such a situation is immoral.  It’s fine and dandy for the rich to get the best houses, cars, TV’s and booze, and the poor to get the worst.  It’s not so fine for the poor to get the worst health-care.  I think it is immoral for people to have to die or suffer just because they are poor.  I also think, in general, it is immoral to take people’s money even if you are doing it to help others.  In the end, I think it is more wrong to let the poor suffer and die then to let the rich keep what they worked for.

Thus, I support a national health care plan.  Research shows the single payer model to be the most cost effective, so that is the model I support.  So, would I vote for the Obama plan were I allowed to?  Absolutely not.

Any program which requires a large, strong, national government must be in violation of the constitution, if not in letter, then in spirit.  As a result, it will be a bass-ackward band-aid whose form is characterized by what is necessary to pass through the constitution and not what is best for the American people. I cannot support any national plan, or any national goal, in the absence of 4 things: a new constitution, Condorcet voting, proportional representation, and a national assembly.

The current constitution is made for a weak, small federal government.  If we need national health-care, and I think we do, we need a new constitution which produces a cohesive, rational, strong, large, federal government.

Condorcet voting: a strong, national government and the constitution which allows it can be a great assistance to the people, or an unholy terror of the Soviet type.  The only way to keep the government, by, for, and of the people is democracy, and Condorcet voting is, frankly, more democratic.

Proportional representation is the same.  It gives more voice to more people, and helps keep multiple parties.  Condorcet voting is pretty useless if there are only two contenders for every election.

Finally, a national assembly.  National programs need to be overseen by leaders elected nationally, not a national collection of leaders elected locally.  All legislators need to be elected by Condorcet voting, and the Senate needs to be elected in a coast-to-coast popular election.  Baring these changes, placing the national health-care in the hands of the existing system would be a cure fare worse then the disease.

Remember the bridge-to-nowhere? Get ready for the hospitals for no one.

October 12, 2009 Posted by | atheism, Government, Pharmacology, Politics, Religion, skepticism, Uncategorized | , , , , , , , , | 1 Comment

Health-Care and Socialized Medicine (Health-Care IIX)

I am a member of the US military. It’s not something I talk about on my blog a lot because there is not a lot I can say about it.  I can’t say anything that would reflect poorly upon my branch, the Air Force, and it is important that in any political or religious thing I say that I make very clear what I am saying is my opinion alone, and does not in anyway constitute an Air Force or DoD agreement or disagreement with my point of view.  Further, I cannot reveal any information that about what I am doing at work that you wouldn’t get from the base website, because I could inadvertently reveal sensitive information.  (My job isn’t that cool; I put gas on planes, but that’s the policy.)

The above paragraph is over 100 words.  It’s a pain in the rear to throw that boilerplate on any blog I do that mentions work, but this subject is important to me so I believe it is worth the hassle today.  So is it clear to everyone this is my view and in no way reflects the views of the Air Force? Good. I want (surprise!) to talk about health-care.  You see, when I get sick….

I go to a medical clinic which belongs to the government, whose every operational bill is paid by the government, and I see a doctor or nurse in a government uniform, whose every paycheck is signed by the government.  He or she writes me a prescription which I take to the government owned pharmacy, and the pharmacist, wearing a government uniform, who is paid by the government takes the pills the government paid for, and gives them to me.  And I never, ever, see a bill.

Now, there is a name for the sort of medicine where the government owns the hospital and everything in it, pays all the employees, pays for all the drugs, and never charges the patients anything, regardless of income.  It’s called SOCIALIZED MEDICINE.  So, if socialized medicine is so bad, why does the military have it?

The number one answer I get is that we in the military deserve our benefits. (Implying, I guess, that the unwashed, unpatriotic masses at home don’t, but that’s not my point.)  My somewhat biased opinion is that the US military deserves the best health-care available. And the statistics say we have it…and oddly enough that we are very happy with it, and don’t want to have to pay our own way, or have to find which of hundreds of competing hospitals has the most affordable rates, or read hundreds of pages of insurance documents.   The service members I know, don’t want more competition, or a system in which the service members who make the most, get the best care.

How un-American of us.

October 9, 2009 Posted by | Government, Pharmacology, Politics | , , , , , , | 2 Comments

Health-care debate VII

Do we want to fix health care? Health care is a cross roads where health-care providers, health-care consumers, health-care insurers and government all meet up. I can not talk about reforming those things without getting into pretty serious conversation what government’s role in society is, and here is my “simple” answer…

Government has a legitimate monopoly on force. If the mafia says “Give us 30% of your paycheck, every paycheck, to spend on protecting you and if you don’t we will take your stuff and/or lock you up in a small room with highly abusive people,” we would call that a protection racket, a form of organized crime. The reason the government is allowed to do this, and other groups are not, is because the government has a legitimate monopoly on force.

Under normal circumstances, a person exposes themselves to force by contract. Your collectors have the right to take your stuff if you don’t pay because you signed a contract saying it was OK. The fact that you have many contractors to choose from and that you enter the contract of your free will, makes this type of force self regulating and legitimate.

Government, on the other hand has this right regardless of contract, and there is no competition. So, in the absence of voluntary contracts serving as a control to the force, freewill is expressed through democracy.

However, democracy requires a system in order to function well. The simple will of the majority for every government tasking would be disastrous, even it it were logistically feasible. Fifty-one percent could (and would) use their power over the government to use the government’s monopoly of force to seize the money and resources of the remaining 49%.

Also, the fact that the government has monopoly on force doesn’t mean the government is the best instrument to accomplish every job. Socialism basically means the rich pay more taxes and the money taken from the rich provides for the poor. In a totally socialist state, the government would make all economic decisions for the people. Historically, this works very poorly.

Americans, justifiably proud of their economy, often complain about socialist economic control. However, if people take the time to think, few people really want a totally capitalist society, in which the supply of anything is controlled only by market demand, and not by the government’s monopoly of force.

Prescriptions are a good example. In a totally capitalist society, people could buy whatever drugs they wanted. The supply of drugs would be controlled completely by the demand for them. However, we impose non-market control over drugs, denying people access to drugs regardless of their demand because, in this case, capitalism harms rather then helps society.

Why? Because capitalism is a means to an end and not an end to itself. Capitalism is great at providing a variety of products, and using competition to drive the price of those products down, but capitalism, like many tools, is without morals. It is neither good, nor bad; it just is. Sometimes we stop capitalism from working on moral grounds.

The military is another good example. Bill Gates pays about 15 million times more taxes than the average American. Yet, he receives exactly the same level of military protection as the homeless who live nearby. That is socialism at its most basic. Yet few Americans clamor to have the US military dismantled and replaced with competing mercenary bands. We turn capitalism off and utilize the government’s monopoly of force when it seems that taking unequally from all to provide equally to all is more moral than not. In a totally capitalist economy, the rich would have the best police, the best roads, the safest airplanes, just as in our current economy they have the best cars, the best houses, and the safest neighborhoods.

Morality is the test. The poor people in a police district get the exact same protection as the rich in the same district, flying first class is just as safe as flying other classes, and the military protects us all to the same degree regardless of income, because we have decided to tax those with money, to pay for a service for all.

The government has a responsibility to protect its citizens, thus everybody pays what the government thinks they are able, to receive the exact same level of military protection. This does not mean there is a universal right to military protection, for there is no such thing as a right to a service when no contract has been made; it simply means the government has a responsibility to provide the best military the people will fund.

Health-care is no different. The government has a responsibility to protect the lives of its citizens. If 50,000 people a year die in attacks, the government acts through the military. If 50,000 a year die in traffic accidents, the government acts through the Department of Transportation. If 50,000 a year die from inaccessible health-care…well then let’s not do a fucking thing because that would be socialism?

My. God. Obviously, morality calls for the limited suspension of capitalism in this case. France has the the highest value health-care on Earth. In a few other countries, people pay less but get far less (Chad for instance). In most other countries people pay far more and get a bit less. There are three keys: (1) There is a single payer (the government) for everything; (2) The book keeping is state of the art; (3) The doctors strike regularly.

It’s that simple. In response to the will of the people, the government sets price caps as low as possible. In response to the health care providers, the government raises price caps. Between the two, the providers get the incentive they need to stay in the market, and the people get what they need to be able to afford health care.

And it will not work in the U.S. for just as simple a reason – we lack the sort of democracy that allows it. In the U.S.’s single-member-district plurality representation, it’s all or nothing; 100% or 0%. That simply will not work for government price fixing. Let us suppose the Republicans side with the doctors, and the Democrats with the “more-for-less” voice of the people.

When the regime is Republican, the doctors will do well. When the regime is Democrat, the doctors will do poorly. In a society like France’s, the doctors will always win something, but never as much as they ask for…every year. The people will always win something but never as much as they ask for..every year. In the U.S., doctors will spend 4-8 years going broke followed by 4-8 years of getting paid. Though this averages out to the same thing, the fact is after 8 lean years, doctors will be leaving the field in droves. The profession of medicine cannot survive the zero sum game (0% or 100%) method of democracy; it needs proportional representation.

If we really want health-care reform, we need to partially socialize medicine. If we want that, and we want crops of new doctors to replace the retiring ones every year, we must have proportional democracy.

Proportional democracy, however, only works for large bodies of many representatives, like the House. For things like the Senate, or the Presidency, we still need to vote for one person. No matter how democratic the House, unless the Senate and the President are elected differently, we will have made huge change with no positive effects. The two-party system would still rule the executive branch and the Senate.

For these, we need a Condorcet vote. In this system, the voter rank candidates, and the overall winner gets the seat. This breaks the back of the two-party system and puts the President and the Senate in the same democratic boat as the House.

Without these, any attempt at health-care reform is so much verbal masturbation.

September 27, 2009 Posted by | atheism, Christianity, Government, Politics, Religion, Science, skepticism, Uncategorized | , , , , , , , , | Leave a comment

Health Care Debate VI

So, one of the things I thought about as I was siting in my car seat, either watching barriers shoot (by far to close) or stuck in traffic, was the American health care system.

In post five, I said health care is a real problem in the US and needs a solution. A gave a solution, but it was so cursory as to be nearly comic. (Like a three step process to getting the moon: 1. Build rocket, 2. Load up and launch. 3. Land on moon.) I wanted to go into detail, but I simply don’t have the time it would take to write a book about it. Here is my less summarized than before, but still highly summarized problem. (The solution in the next blog.)

I’ve come to think, after much reflection, that problem is not health care. The problem is Americans. We have the 2nd most expensive socialized health-care per capita GDP on earth, yet it covers only a 1/3 of our citizens. We have the 1st most expensive private care per capita GDP on earth, yet have the lowest age of mortality and highest infant mortality in the western world. We have highest medical costs, bar none, on earth, yet the leading cause of death cancer caused by tobacco and heart disease due to diet and inactivity. We have all of this…and yet at least half of Americans don’t think there isn’t a problem.

Most Americans are stupid. We have only two possible causes for any undesirable behavior: internal and external. I find the idea that Americans are genetically inferior to people of other nations ridiculous, so that just leaves external. What could be acting from the outside in of whole nation to make Americans so politically stupid?

Let me pause for a moment, to say that I love my country. It’s not a perfect place, but I love it worts and all. I’m not so naive to believe that the election of single black man to the highest office in the land eliminates racism. I see private, quietly expressed racism nearly everyday I am work. The fact remains however, only three generations from one of the most homicidal racial slave systems on earth, a black man as president is a good step. It doesn’t solve inner city poverty. It doesn’t change the fact that schools with mostly black kids get a fraction the funding as schools with mostly white kids, but you will not see an outcast on the Diet of Japan, or Jew as the president of Egypt in three generations. America, ultimately, does many thing better then any other nation on earth.

But in the American democracy, there is a corrosive element that eats away at the will of the people constantly. It’s called the two party system.. In turn, the two party system is what causes this uniquely American stupidity.

I could go on about how two party systems prevent any real change (which they do), or why the left and right of the Communist party in China represent more choice of ideals then the Democrat and Republican party (which they do) but thats not the important part. No matter how bad the collusion between our politically parties, or between those in power and those with money is, democracy has an amazing power to right such wrongs, and in a way the people support. While the US does have systemic problems, the existing system has the capacity for self correction…but it’s only as good as the people voting.

The two party system putrefies the minds of the people. It reduces every discussion of shade and color of meaning into single binary choice of black or white. It turns every attempt at discussion into a cosmic battle of good and evil, characterized by a double false dichotomy. “False dichotomy” in argument refers to painting a bleak picture of you opponent’s viewpoint to make yours look better by comparison. In the two party system, both the viewpoints provided are absurd. One side is the bastion of all freedom, happiness, and light, the other a hotbed of evil, conspiratorial lies, and ill will. One side is God, the other side is Satan. 100% or 0%, with no in betweens.

In that environment, there can be no discussion, no debate, only people screaming slogans. The two party system is often defended with the statement “Well, it’s a good system, because it tells both sides of the story.” That single statement shows the mental atrophy that a two party system exacerbates: the idea that all meaningful thoughts on a subject can reduced to two viewpoints. Obviously it’s better then a single party system, but thats damning with faint praise. (Two steps removed from anarchy! Go team!)

Such simplicity is seductive. You don’t need to worry about how or why. You don’t need to think. You just need to know which of a pathetic two options you choose. This brain rot affects other things besides politics. Auto accident policy is the same. Pretend you are going down a road and the person in front of you slams on the breaks to turn right. You hit their car. It is 100% your fault. Why? Yes you were following to close, but couldn’t it be even a few per cent the other drivers fault breaking irresponsibly? (Which is how most traffic law is set up in Europe.)

The first step in my little “How to fix health-care” post was “Tort reform”. The 0%/100% fault system rears it’s ugly head hear as well. If you have a pool in your back yard, it must have fence of certain opacity and height, because it is an “attractive nuisance”. You must do this, because if someone gets into your pool without it, you are 100% at fault and they are 0%. That’s stupid. At the same time, the law was put into place to right the wrong of people putting things very dangerous to children in their yards with no protection whatsoever, an environment where the pool owner had 0% fault and small child was 100% at fault.

The real answer to tort reform is a society that recognizes partial fault. I think a two party system trains peoples minds to be incapable of functioning in the gray areas that make up real life. The real cause of the American health-care failure, is Americans incapacity for rational thought, followed by an inability to turn rational thought into rational policy.

September 27, 2009 Posted by | atheism, Christianity, Government, Politics, Religion, skepticism, Uncategorized | , , , , , , | 2 Comments

The Health Care Debate II

Ok, so last blog, I looked at the insurance companies.  Basically, there is large room for improvement, but I didn’t find the huge smoking gun of “THE WHOLE THING SUCKS BECAUSE OF THE INSURANCE COMPANIES” I thought I would.  In fact, ultimately, premiums are high because hospital care (which premiums insure) are high.

A hospital is a business, even when it is a non-profit.  If cash out exceeds cash in, like all other businesses, it fails.   Right now, hospital costs are higher then they have ever been, so we would think that hospitals are making money hand over fist.  Actually, not at all.

Over the last 10 years the average profit margin (the amount of economic surplus) has increased. It’s gone from (ready for this)… 4.9 to 5.2%.  An oft quoted stat is that many of the most profitable hospitals are making a 20.1% profit margin.  It’s true.  Some of the most profitable hospitals are putting a 20% mark up on certain procedures.  It’s to cover the 15% loss they take on the other ones, leaving an end of the year balance of…5%.

Why are they taking a 15% loss?  Well, because Medicare, Medicaid, SCHPs, (all the gov-care) doesn’t pay the full cost.  Note, this isn’t saying gov-care doesn’t pay the full charge.  Think of it this way. A procedure costs the hospital $100.  They bill $120 for a twenty percent markup.  Private insurance pays $120.  Gov-care pays whatever it can afford, usually around $85.  A 15% loss means 15% below cost, but about 43% below the price.

The reason for this is the program is never given enough money to pay all the expenses it incurs.  If the program was supposed to pay for 100 procedures at $1 each, and there are 140 procedures, then all the hospitals get $0.71 instead of a dollar.

Further, remember that gov-care is only about 1/3 of the number of patients, 2/3rds are private insurance, so how does the hospital not make a killing, taking 15% loss on 1/3 and getting 20% gain on 2/3rds?  Because the 1/3 of people on gov-care are the most expensive patients.  Despite the fact they make up only 33% of the hospital population, they make up 50% of the expenses.

Hospitals can refuse gov-care patients so why don’t they? If taking a patient on medicare meant you were going to loss 15% of the cost of care, why would hospitals take them in?  Because of the Emergency Medical Treatment Act of 1986, which means, “regardless of citizenship, legal status or ability to pay” any patient who needs emergency care must receive it.

Hospitals loss on average, about $84 per emergency room patient.  Emergency rooms account for about 20% of the total cost of running a hospital.  So, why have one? Because 1/7 patients who visits the ER will have a highly profitable inpatient transfer.  The best way hospitals can get the profitable 2/3rds of insurance payers into inpatient surgery is through the ER doors.

What about people who don’t have insurance, and don’t qualify for gov-care and simply refuse to pay? They are very small part of hospital losses, about 3% on average.

So if, 97% of the hospital customers are paying, and half the cost is at a 15% loss, and half is at 20% profit, that doesn’t really explain why health care is so expensive.  I mean, yes all the responsible people are effectively paying a 20% sales tax to the hospital to cover the portion of socialized medicine that the their income tax didn’t pay.  But, 20% sales tax does not 200% overcharging make. (The cost US health care exceeds the cost of better health in many other industrialized democracies.) So what gives?

The most expensive thing in the hospital is labor.  If we are serious about reducing the cost of health care, we have two very basic options. One is make labor cheaper, the other is use less of it.

What about cheaper labor? The most expensive section of hospital is ICU and 80% of the cost of ICU is labor.  ICU nurses make about 46k a year.   I’ve often mentioned France in this study.  Nurses in France make half of what American ones do, and health care is cheaper.

As to reducing the number of hours nurses have to spend with patients, let me rip this long section from this article.

For example, if you are a Medicare recipient and you have a heart attack in a region where doctors practice less aggressive care, like Salt Lake City, your care will cost Medicare about $23,500 over the course of a year. But if you have your heart attack in a place like Los Angeles, the bill will be closer to $30,000.

The wide gulf in spending between the two cities is not because of different prices. Sure, everything costs a bit more in Los Angeles, including nurses’ salaries and the laundering of hospital linens, but not enough to account for the extra amount Medicare pays for a heart attack. The reason the same patient’s care costs more there than in Salt Lake City is that doctors and hospitals in Los Angeles tend to give their patients more tests, procedures, and surgeries, and their patients tend to spend more days in the hospital.

But here’s the important part. All that extra care in L.A. doesn’t lead to better outcomes. As it turns out, heart attack patients who receive the most care actually die at slightly higher rates than those who receive less care.

So, um, why are we doing this to our selves? Again, same article:

Why? Because doctors believe patients will be less likely to go to a lawyer if they think the doctor did everything possible—even when doing so doesn’t help the patient or causes harm…

The article puts forward the idea 50% of medical procedures are basically done to make people feel better rather than be better.  That is to say, nearly half of all procedures done have no backing in reality which suggest they are necessary.  At least one large portion of the problem is that lack of skepticism and respect for the scientific method exhibited by American medical consumers.

Tune in next time, when I tie the this blog and the last one together to create a cohesive solution.


August 24, 2009 Posted by | Pharmacology, Politics, Science, skepticism, Uncategorized | , , , , , , , , | 2 Comments

The Health Care debate.

Health care as I see it.

I started this blog just writing down as many facts as I could about the health care system, trying to make sense of it all. The first assumption is that health insurance is the right way to pay for health care, and this leads to two problems. One, that insurance is too expensive, and two since it’s so expensive, to few people have it.

Well, I’ll begin by saying there could be serious improvement to health insurance. First off, insurance is a method of sharing risk. Everybody pays a foreseeable and affordable loss (premium) to the company, who in exchange pays unforeseeable and un-affordable loss affecting a small minority of policy holders.

I’m not sure insurance is a totally appropriate method of paying for health care in this day and age for three reasons. One, modern diagnostics, predictive methods, and techniques mean the unfordable loss is no longer unforeseeable. Two, the big three killers: hypertension, smoking, and high cholesterol, are all preventable and highly dependent upon lifestyle choices. Again, this does not meet the criterion “unforeseeable”. In fact, we could even say high treatment costs for chronic illness are so foreseeable as to be statistically unavoidable. Three, the rate of premium depends upon how expensive the policy holders un-affordable loss is to the company, and the number of policy holders who need it. In an age of 32% obesity rates (obesity exacerbates almost every chronic health condition.) that are likely to be approaching 40% in the next ten years, health care expenses don’t meet the final criterion of only a small minority experiencing an un-affordable loss.

Is insurance too expensive? Probably. Everything I mentioned above can only go one place: premium increases. Are insurance companies pushing the boundaries of ethical behavior? Probably. Is that failure of the insurance companies? Well, not exactly. People and groups have the ethics they can afford. The average health care insurance company runs a 5.5% profit margin. In a free market economy you get what you pay for. The higher the premium the better the service. The lower the premium the worse the service.

The answer to improving the insurance industry is pretty simple. Consumers need better info, with less dead weight losses to changing companies. The insurance companies need to write their contracts at a 6th grade level (Average US reading comprehension), and switching insurance providers needs to be a single sheet of paper or a phone call. However, other then codes requiring simplicity, transparency, and interchangeable standards, the industry needs to be heavily deregulated. This encourages the sort of cut-throat capitalism that makes America a land of opportunity. Also, medical saving accounts are an option. Between private capital in medical savings accounts, credit union style insurance companies, and D-regged private insurers, competition would make companies leaner.

But ultimately, we are talking about companies fighting for tenths of a percent. The cost of premiums is decided by the frequency and cost of care. Insurance companies can profitably only reduce unnecessary visits. Visits which prevent costly claims increase profitability, so a huge reduction is frequency of care is unlikely. The real cost of health care rests not on insurance companies, but upon care providers.

This case is further born out by the fact that about 1/3 of the cost of health care in the US is paid for by the Medicaid, Medicare, SCHP, and VA government plans. If the problem of cost was one of insurance alone, one would expect that there would be a significant saving to socialized health care, but analysis of the cost of gov-care versus private care show no significant reduction in price for identical procedures. The additional 5% private insurers make as profit disappears into the significantly more expert administration of the private insurers, so gov-care is not 5% cheaper.

So insurance is just a middleman, the real cost in the health care providers. Why is American medicine so expense? Supply and demand says, consumers demand will use up the supply, raising costs until producers can create more. The producers will make so much it will lower the price. The tension of supply and demand drives the price down to market equilibrium, where the consumer is paying as little as he can, and the producer is charging as much as he can. That’s the miracle of free market economy. It pushes the price to where it the lowest possible, ensuring the greatest number have access to the good. Yet in the US 100 million people are on some kind of gov-care. That’s a third of the population!

Every body needs health care, the demand is universal, so it should be decreasing supply, increasing the price, raising the incentive to enter the field which would result in increased competition. This competition would result in innovations which would increase the supply and lower the cost. For some reason, this isn’t happening. In fact, the American medical system is running so badly, that planned economies are achieving greater results with less spending, both in raw dollars and as portion of GDP. The US spends more on gov-care (Medicaid, Medicare, SCHP, VAB, etc.) than countries with fully socialized health care spend on it, to get lower rates of health for a 1/3 the per capital population. Then the 60% of Americans pay again! American private health care costs more then any other industrialized nation. France in particular stands out (!) with the average American paying over 200% more for private health care, and 75% more for gov-care, while having maintaining statistically worse health.

When planned economies are running better then capitalism, we know something is rotten in Denmark.  I’ll address what later.

August 23, 2009 Posted by | Government, Pharmacology, Self discovery, skepticism, Uncategorized | , , , , , , , , | 5 Comments