Ronin of the Spirit

Because reality is beautiful.

Health Care Debate IV

The purpose of market is to provide a place for the producer and consumer to form voluntary contracts. The market has no intrinsic morals and only one rule: the best deal. The producer makes supply, the consumer makes demand. Between them, and the competition of various producers to provide for various consumers, this constant desire for the best deal drives price ever downward. It rewards the most efficient producer and the most efficient consumer alike. It’s almost a kind of magic.

Market failure doesn’t refer to a total break down of the buying and selling but a break down of the magic, of the automatic best deal for everyone. It’s not discrete point, but direction the market can go. The opposite direction leads to the perfect market. It too is not a destination but a direction, the ideal by which markets are judged.

A perfect market consists of a few key principals, describing the market as a game it looks like this: (1.) Rationality of all players in the game. (2.) No hidden costs to any move. (3.) Enough players that no single one can steer the game by their behavior. (4.) something all the players want to play with [demand] (5.) Freedom to play or not play at any point (6.) No barriers to entering or leaving the game (7.) No barriers to any player about information on any other player.

How does the medical industry fail these criteria?

Rationality of all players in the game

(1.)Well, first of all, the medical consumers are highly irrational. Short term fun at the expense of long term health is not rational, yet 80% of heat disease alone is preventable. Throw in smoking, obesity, diabetes, etc, and the single greatest killer is short sightedness. In a perfect world, doctors would serve as check on this irrationality, but the fact is, doctors are over-treating (which gets people killed) because of their fear of litigation.  The consumer is crazy and so is the producer.

No hidden costs to any move

(2.)The whole field is full of hidden costs. From regulations you never heard of to taxes you can’t imagine, the medical field is a minefield of hidden costs.

Enough players that no single one can steer the game by their behavior

(3.) Well, about half of the cost is payed for by one player (gov-care), and up to 70% of the remaining half is payed for by one company per area.  Normally, this would be called oligopoly, but honestly, its worse than that.  Because the first half is the government, its more like a oligopoly on the second half and monopoly on the first.  Under normal circumstances, even if a player owns 50% of the total market, that player can rarely take away your organization’s legal right to exist, or place members of your organization under arrest. The government has what is known as a monopoly on force. Monopoly represents a market distortion. Force, on the other hand, represents the nonexistence of market.  The foundation of market is people forming contracts of their free will, ie, without threat of force.

Something all the players want to play with [demand]

(4.) Demand, we’ve got. Sort of. The fact is, while doctors may not be the paragons of reason we hope, the producer side (as is typical in other industries) is better at being rational then the consumer side. If nothing else, it’s better organized. The consumer demand is health, not care. But doctors have no economic incentive to pursue health. They have need to produce care. So there is break down between the needs of the consumer and the ability of the producer to meet that need. Note, I am not saying there is a conspiracy by doctors to keep people sick. Doctors are like most people: there’s a few true saints, a few evil bastards, and lot of pretty ethical folk.  But the fact is, we must relay on doctors’ moral incentive and not their economic incentive to provide us with health. Systems work better when the two incentives are the same.

Freedom to play or not play at any point

(5.) This one absolutely does not apply. Playing in this case means the freedom to form or not form voluntary contracts. If the consumer doesn’t enter the market he suffers or dies. At the same time, if the producers do not enter the market many suffer or die. Further, hospitals must provide emergency care to everyone, regardless of ability to pay.  On the insurance side, insurers must provide insurance to at a loss to certain high risk people. They must by law.

No barriers to entering or leaving the game

(6.) Well, the barriers to entering the game are enormous. Lets say we want to start a tiny private practice, with very limited services. First, the price of becoming a MD is between $175K and $200K. Then, the first year cost for 1600 square foot commercial space, a receptionist and tech who makes no benefits is about $250K­. So, minimum startup cost is right around half a million dollars. Nor can hospitals simply exit the market, they provide a community service and without them people will suffer and die. Insurance is the most heavily regulated industry in the US, so even if cash on hand was not a problem the regulations would be, but in any case, and insurance company must have the cash on hand to pay out all claims if they were all called at once. The startup costs for an insurance company are in the tens of millions.

No barriers to any player about information on any other player

(7.) This is the worst. Insurance companies use hundred page contracts written legalese on purpose, to hide the information the consumer needs to know. At the same time, insurance fraud is a huge expense, because people aren’t honest with the companies either. If people are totally honest with doctors, their premium could go up. Conversely, if doctors are honest about risks with patients, the patients will simply go to another doctor who paints a rosier picture.  Again, the moral incentive is diametrically opposed to the economic one.

All in all, it’s a wonder health care is as cheap as it is. Again, I’ve hit over 1000 words, so I will post my solution(?) later. Thanks for reading all, feel free to weigh in on any of this.

August 30, 2009 Posted by | atheism, Government, Pharmacology, Politics, Religion, Science, Self discovery, skepticism, Uncategorized | , , , , , , , , | Leave a comment

Press bias, shesh bias

So, I continue to attempt to hammer out a constitution based on skeptical reasoning.  It’s insanely difficult.  The constitution is not the law of our land, thats the US Code.  Cornel has a searchable version of it on their website.  The Constitution is the spirit of the law.  Now, you might assume that because I am not a rightwing christian, that I could use the UN charter.  I read the UN’s documents again tonight. What a load of hooie that rag is.  The writers of the UN declaration of human rights seemed to missed the verbally subtle but methodologically mammoth difference between a right to pursue happiness and a right to happiness. First, they decide on what, ideally, a government should do if it has the money, then they say all governments worldwide must provide this service, and then they say that the provision of this service is a right.  Let me be very blunt…

Government….services….aren’t….rights.  Yeah, it’s just that simple.

In the United States you do have right to Social Security, because the government is a service provider who has entered a contractual agreement with the people to provide the service of social security insurance.  But your right is as a contract holder, not a citizen. Your parents got it because you paid.  When it comes your turn, you will get it because your kids paid.  That’s how insurance works.  It’s crappy retirement plan because it isn’t a retirement plan, it’s retirement plan insurance.  If your nest egg goes belly up when the market tanks, you sill have a bare sustenance to fall back on. And no, you don’t get anything if you manage to put away a ton of cash.  You don’t get a fire insurance payoff after 50 years of your house failing to catch on fire either.

If the government would let you stop paying for SSI, and you wouldn’t have the option of getting it anymore, then it would go away.  Free speech does not go away when you quite paying to hear government officials talk. One of the many differences between a service and a right.

But you do not, contrary to the UN declaration of human rights, have fundamental human right, on equal ground with the freedom to practice the manner of worship of your choice, to… not have to keep a job when you get too old too work.  Sorry.  Just because you want something, doesn’t mean the government must get it for you, and it sure as hell doesn’t mean that you have a right to it. Reading through the Declaration of Human Rights is like reading a constitution written by a 13 year old.  “Uh, I’ve got freedom of speech, and..uh, freedom of worship…and…uh, I’ve got a right to all the pizza I can eat….um, hey yeah! I’ve got a right to honk girls’ boobies!  That’s a good one!…Right to…uh…trial by jury…”

But, as I laughed to myself at those silly Frenchmen, I realized something evil.  Americans do something worse, about something more important.

The US Constitution lists the right of “freedom of press”.  I hear all these people complaining about conservative domination of the radio and liberal domination of the TV networks.  Someone I talked to recently bashed the lies he’d heard on the “liberal media”.   Liberals I know would like to see the “Fairness doctrine” enacted to make radio less conservatively bias.  

That’s when it all came together for me,  (1.) all this swirling crap storm about bias, and (2.) the purposed solutions of mandated balance.

One, about bias.  You do not have a right to truth without effort! Of course the news is biased!  You think that some of the wealthiest companies on earth got that way by carefully reporting the unvarnished truth?  Of course not!  They are businesses, and they are in the business of telling the news that sells the most ads.  They always have been.  “But what about government supported news,” someone snivels.  They are a business, and their bottom line is funding too, it just comes from a different source.  Most information is biased! If you want the truth you are going to have to work for it.  I say again You do not have a right to truth without effort.

Ok, the whole “we-have-a-right-to-free-press-but-there-is-a-bias-so-it’s-not-really-free” argument.  First of all, it’s all going to be biased. The right to a free press does not mean free of bias; It means you are free to print your own bias.  You don’t have right to find any viewpoint you wish in print, you have a right to print any viewpoint you wish.  Freedom of the press means you are free to buy a press and go at it, not that you can sit on your ass and have prechewed ideas spoon fed to you.  

The world is market place of ideas.  These bias/not-really-free presses chants are the pathetic, infantile prattle of people who think their ideas are a lot more important than everyone else does.  If no one is listening to you, it’s gotta be that the media is too biased, and the free speech isn’t really free, and a homosexual/privileged white male/post patriarchy/Zionist/fundamentalist agenda is keeping you back.  In short, it’s just gotta be anything except the idea that no one is listening because they don’t care about your stupid viewpoint, because in the marketplace of ideas you are selling a rusty Yugo. 

November 19, 2008 Posted by | Government, Politics, skepticism, Uncategorized | , , , , , | Leave a comment