Tuesday, September 15, 2009

Thomas Sowell's "Single Payer Plan": HIMSELF!

What did we do, back during the years when most Americans had no medical insurance? I did what most people did. I depended on a "single payer"-- myself. When I didn't have the money, I paid off my medical bills in installments. The birth of my first child was not covered by medical insurance. I paid off the bill, month by month, until the time finally came when I could tell my wife that the baby was now ours, free and clear.

In a country where everything imaginable is bought and paid for on credit, why is it suddenly a national crisis if some people cannot pay cash up front for medical treatment? That is not the best way to do things for all people and all medical treatments, which is why most Americans today choose to have medical insurance. But millions of other people choose not to-- often young and healthy people, sometimes deadbeats who use emergency rooms and don't pay at all.

Is this ideal? No. But if every deviation from the ideal is a reason to be panicked and stampeded into putting dangerous arbitrary powers into the hands of government, then go directly to totalitarianism, do not pass "Go", do not collect $200.

~Thomas Sowell

24 Comments:

At 9/15/2009 9:30 AM, Blogger 1 said...

Note the following from Dr. Sowell: "What is equally childish is the notion that the great majority of Americans who have medical insurance, and who say they are satisfied with it, should be panicked and stampeded into supporting vast increases in the arbitrary power of Washington bureaucrats to take medical decisions out of the hands of their doctors-- all ostensibly because a minority of Americans do not have medical insurance"...

This begs the question, 'just how many children of adult age do we have in this country?'...

The arithmetic of ObamaCare looks truly ugly...

 
At 9/15/2009 10:58 AM, Blogger Steve said...

Could someone please explain, if you have and will keep private insurance, how the government will "take medical decisions out of the hands of their doctors"?

How will the up-to-now satisfactory private plan change as a result of the proposed health care reform?

 
At 9/15/2009 11:32 AM, Anonymous Benny The Free Man said...

Still, I am required to have car insurance in the State of California, and no one waas-waas about that. But it is okay I do not have health insuance?
Also, individual buyers have little leverage to negotiate better prices, as they would in groups.
Really, I don't understand the right-wing hysteria about health care. They never comnplain about the $100 billion a year in rural subsidies the feds pay out.

 
At 9/15/2009 12:05 PM, Blogger QT said...

I agree that the vast majority can afford to pay for basic coverage but how does one compare a central government committee to "totalitarianism"? Routine basic care is not the area that is driving costs. Dogs & bones? Give me a break.

Wouldn't it be more helpful to try to get a handle on the nature of the problems (ie. what is driving costs, how did the present system evolve, etc.) and possible public policy solutions?

Jeffrey Flier, Dean, Harvard Medical School

Nobel prize winning economist, Robert Fogel

 
At 9/15/2009 12:12 PM, Blogger QT said...

Benny,

Most of us do not support ag or ethanol subsidies but in the context of a 1.6 trillion dollar deficit, is 100 billion even material?

The subject is health care not agricultural subsidies...ever heard the expression "beating a dead horse"?

 
At 9/15/2009 1:07 PM, Blogger 1 said...

benny the pseudo freebie says: "Still, I am required to have car insurance in the State of California, and no one waas-waas about that. But it is okay I do not have health insuance?"...

LMAO!

Way to go benny! You don't know the difference between what auto insurance is for and what health insurance is all about...

"Really, I don't understand the right-wing hysteria about health care"...

ROFLMAO!

I guess you've never heard of the Constitution, right benny the pseudo freebie?

Let the Volokh Conspiracy school you in the finer points of the civics you should've learned in school: Is ObamaCare Unconstitutional?

 
At 9/15/2009 1:18 PM, Blogger Walt G. said...

QT,

I remember my elementary school teacher in 1961 complaining that a student stepped on her foot and she had to pay $5.00 for an x-ray, which is $36.01 in 2009 dollars. (and that was full price!). Back then that was about the extent of medical diagnostic tests.

Do you think that maybe current technology has advanced too quickly for the average person to pay for it, or the problem is a lack of competition in the medical field? Maybe both? I had a $1600 MRI and a $1700 prescription last month, but I have a feeling that a $36 x-ray and a few dollars worth of aspirin would have handled the job just like it would have had to 48 years ago. It’s good thing I had insurance—or is it?

 
At 9/15/2009 1:46 PM, Anonymous Anonymous said...

Walt,
You addressed the problem: people consume lots of health care because they only pay for a very small amount of it (private plans, government plans, dumping it on the rest through ER care, etc). It's therefore perfectly reasonable to have expensive tests and there is no incentive for the patient to understand the care (so they can opt for something less extreme).If you think an X-ray and an aspirin was all you needed and then you had a $1600 MRI and $1700 prescription.

Tort reform would help. Those tests are also given to cover physicians from a potential malpractice claim. It isn't addressed in the 'health reform' bill because lawyers are major donors to the democrats. The savings from tort reform would be massive.

 
At 9/15/2009 1:57 PM, Blogger Walt G. said...

I don't know if I needed it or not. I pay doctors for their expertise. If I had not followed orders and that resulted in hospitalization, it would have been much more expensive.

You're damned if you do, and you're damned if you don't. Who makes the call?

 
At 9/15/2009 1:58 PM, Anonymous Anonymous said...

Only Sowell could say that.

Reminds me of a Ph.D U Chicago finance guy I have as a client who switched to a high deduction plan so he could fit it in a HSA. His wife then had an anuerism (sp), and could you here him yell about drug costs and medical costs. Since his hedge fund is small, he is a backer of health care reform. Just depends where you sit at what time.

On that subject, you might want to look up Shiller's course on financial economics at Yale (free finance course on the internet, YEAH). Then go to the lecture on social insurance. You can find the course here: oyc.yale.edu His point is that if, before you were born and before your parents new your health condition, both you and they would choose, for efficiency alone, social health insurance. He explains why using some math, but basically the law of large numbers, and how if everyone is in the pool, and there are no pre-existing exclusions, writing health insurance would be like writing fire insurance, and there would be more competition. Go to it and see for yourself and think about it.

And, then go back and laugh at Sowell.

 
At 9/15/2009 2:16 PM, Anonymous Steve said...

I agree slightly but one issue is the ever increasing costs of medial care. Many need to file bankruptcy due to the high costs of an uncovered medical emergency. We don't want additional families falling into this group.

 
At 9/15/2009 2:28 PM, Blogger 1 said...

Interesting question Walt G...

Then again how much of what it cost your insurance company to cover the cost of your medical situation was driven by the fear of being sued?

Diana Furchtgott-Roth of the Manhattan Institute writing in Real Clear Markets last month claimed the following: What it won't tell you is that about ten cents of every dollar paid for health care goes to the malpractice insurance doctors must have to protect themselves in case patients sue them...

Dr. Thomas Morrow writting an opinion piece in the Atlanta Journal Constitution (last week) noted the following: The cost of medical care can be calculated by adding up the cost of each unit of care, multiplied by the cost per unit. If an appendectomy costs $8,000 and you need to perform 100 appendectomies a year, the total cost would be $800,000. To add up the total costs of all care you have to calculate this for each procedure, office visit, X-ray, drug, etc., and add them together.

Once you understand this concept, it’s easy to figure out how to cut the total cost. You reduce the payment for each service, or you reduce the number of (unnecessary) services used in a given year, or both. But how many readers have had an unnecessary service in the past year?
...

The problem of guessitmating healthcare as we see has many, many facets and each facets varies a bit for each and every person needing medical care...

 
At 9/15/2009 2:35 PM, Anonymous Anonymous said...

Part of what is driving medical costs is that demand is increasing but we are driving people away from the medical profession due to the long hours and lousy pay. At the same time, we are subsidizing lawyers who sue doctors and add to their costs. Why not subsidize health care providers and kill the attorneys? Increase supply to meet demand. Obama will only increase the shortage of health care providers with prrice controls and rationing.

The alternative is and will be importing doctors and other health care workers from abroad.

I have noteced that MRIs have increased about 25% in the last couple of years. Is that unusual? Dedorant has increased 33%. Small York mints have increased 26%. Wrigley gum has increased 20%. Foamy shaving cream is up 25%. Only automobiles and oil is cheaper. Is this all due to increased demand? How much is that is due to tax increases? Cost of living? Government spending crowding out private? Imagine what will happen when Obama care is passed. I hope incomes go up too.

 
At 9/15/2009 2:51 PM, Blogger QT said...

Walt,

Isn't it also possible that your teacher in 1961 was complaining about paying for an X-ray that she realized afterward that she didn't really need? I am guessing that you were in primary school in 1961 so aren't we talking about a child stepping on the teacher's foot?

I believe that an x-ray is still be the standard diagnostic used to detect bone breakage. An MRI is used to image soft tissue damage such as a torn ligament, rotator cuff tear, or a herniated disc etc. I don't believe any doctor would order an MRI for this. He/she might not even bother with an x-ray. Probably just tape it and give the patient some pain killers.

It is impossible to assess whether a $1700 MRI & $1600 in meds were necessary without knowing the condition that was being treated. I believe that it would be taking a liberty to ask for more details.

I agree that diagnostic technology is certainly one factor which elevates cost. Perhaps, I was unclear on this point. I was really taking about routine treatment ie. a sprain, the flu, food poisoning, a chest cold, flu shots, annual physical, routine blood work, etc.

An MRI or a CT scan is not generally routine unless there is a more complicated problem ie. severe chronic pain, impairment of function, etc. Most doctors do not recommend diagnostics for asymptomatic patients ie. full body scans.

 
At 9/15/2009 3:45 PM, Blogger OA said...

Benny The Free Man said...
Still, I am required to have car insurance in the State of California..


The insurance you are required to have covers damage or injury to others. If you own your car outright, you don't need any insurance on damage to it.

Anonymous said...
Reminds me of a Ph.D U Chicago finance guy ... who switched to a high deduction plan so he could fit it in a HSA. His wife then had an anuerism (sp), and could you here him yell about drug costs and medical costs...


Or course he complained. One of the best things about HSAs (in terms of economic incentives) is people now see how much things cost. But I find it hard to believe the total cost up to his deductible plus the premiums is much more than just the premiums for a regular plan.

Every time I quote an HSA relative to regular plans the premium difference covers most of the deductible. The older people are, the more so. So people continuously maxing out will pay more overall. But not that much since regular plans have co-pays as well. Start in your 20's and most people will build up big savings accounts versus the insurers using the money for other people's treatment. Or they'll just pay cheaper premiums.

I'm in my 40's and have over $11,000 in my HSA savings in just 4 years. I talked a self employed colleague into an HSA as well and he complains all the time about how much he pays for his or his family's treatments, but he won't change because overall he saves money.

 
At 9/15/2009 5:47 PM, Anonymous Benny The Unfree Man said...

QT-
I am beating a dead horse, because his is what I see: Right-wingers are against subsidies and government market intrusion, unless they are for subsidies and market intrusions.
The rural population of the US tends to vote R-Party. They also heartily support the completely subsidized lifestyle they enjoy, from subsidized roads, phone service, electricity, water, even medical services. Farm subsidies add to the loot.
Rural areas in the US suck capital out of urban areas, thanks to subsidies.
It is never a topic of conversation, but it is a fact.
Anyway, I hardly mention rural subsidies as often as the right-wing mentions health care, which has become a right-wing obsession.
BTW, in general, I support free-market solutions to everything.
Free markets don't work sometimes; pollution is one example.
Health care? Squishy.
There is a clash between for-profit motivations and what a civilized society wants in medicine.
"Death panels" are in fact necessary, and yet we cannot bring ourselves to face the issue.
The R-Party wants to keep Terri Schiavo alive forever, yet keep health insurance private, and limited to states, not national. That means I have to pay tons for coverage.
And waht happene to Robert Miller? He used to bark around here like an alpha dog.

 
At 9/15/2009 5:49 PM, Anonymous Six Ounces said...

"Single payer" is the uneducated and less sophisticated way to describe MONOPSONY which is Monopoly's equally evil twin brother. Both result in inefficient allocation of resources and/or underproduction.

Anyone who thinks monopsony is going to make things more efficient is an uneducated dullard. Resources currently going into health care have alternative uses. Reduce the prices they receive and they'll go elsewhere.

 
At 9/15/2009 10:11 PM, Anonymous nmg said...

Anonymous - Shiller's overlooks the fact that one's children are usually covered on their private plan. The pre-existing condition argument is a straw man that conveniently forgets this. No way would I choose "social insurance" (govt rationing) for my child when I can just buy a good plan for them before they are born.

 
At 9/16/2009 10:09 AM, Blogger QT said...

Benny,

I will agree that conservatives have recently departed from their principles, most notably, embracing Keynesian economics.

"Rural areas in the US suck capital out of urban areas"?

...ever heard of public transit or Amtrak, public housing, public parks, recreation centres..then there are all of those wonderful publicly subsidized museums, opera theatres, concert halls, art galleries and of course the endless public buildings all subsidized by the taxpayer. These little frills are never paid by the residential/business tax base but come out of general state & federal taxes. Urban areas have been absorbing gargantuan amounts of capital and misdirecting it for years. Only in a city like Toronto do you get schools with swimming pools.

Subsidies are given to large farm operations growing commodity crops like wheat and corn. Small farms do not get subsidies. According to Stats Canada, off-farm income is increasingly subsidizing farm operations in Canada. The average farmer is now in his/her fifties and farm income has continued to decline for the last several decades.

With regard to roads, the transportation is required to get raw materials as well as food to where it is needed (ie. factories, cities). The U.S. has a transportation system not for a handful of people who live on the prairies but for millions who do not.

Water? Visited a farm lately? The farms in my community are all on private wells and have irrigation ponds. Where is the subsidy in providing for your own irrigation needs?

Medical services? Not here in Canada. Hospitals are all located in areas that have a sufficient base of population ie. a town or city. Farmers have to travel to the nearest large community to get medical care. Specialty care is administered at larger regional hospitals. Most people are going to drive to the hospital rather than wait 40 or more minutes for an ambulence.

Phone service? Telephones networks are provided by private companies. The cost of my local service is about double what my mom is paying in an urban community. I am not aware of any government subsidies to private companies to provide telephone services. Again, where is the subsidy?

Just to review our definitions:
A subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry.

If you wish to talk subsidies, then back up your argument with some data. I don't mind discussing this topic in a data driven, fact based way.

A good way to start is to learn how to use HTML to post a link. When you make a point, you can show me what it is that leads you to that conclusion. The point of argumentation is to persuade. In order to do that, one needs to create a compelling argument through the presentation of evidence (they don't teach this in university).

Up to this point, I have not seen you present any data to support your claims and when I test it against my own experiences and knowledge of agriculture, I am not convinced.

Lessons on HTML

 
At 9/16/2009 11:42 AM, Blogger QT said...

Benny,

Looks like you're right & I'm wrong about phone subsidies.

FCC doles out about 1/4 billion each year on phone subsidies

 
At 9/16/2009 1:53 PM, Anonymous Benny The Real Truth Man said...

QT-
That is a valid criticism--I should try to provide some links.
It is actually a difficult topic. Many subsidies are spread across different federal departments--Transporyation, Agriculture, Energy etc.
The US has had whole agensies devoted to subsidizing rural life, such as the Rural Electrifiction Adminidtration. The US Army Corps of Engineers has built rural water systems for generations.
Federal spending may be higher per capita in urban areas--but taxation even higher.
I wil try to reaerch this topic more.
One quick note: The heavily urbanized state of Califonia pays $1 to the feds for every 80 cents spent here by the feds.
This link pretty clearly shows rural states fare like bandits.
When I have time, I will try to compile these figs in a way that supports my "$100 billion a year" statement.

PS I prefer your pleasant photo to that crummy drawing.

http://www.nemw.org/images/taxburd.pdf

 
At 9/16/2009 5:35 PM, Blogger QT said...

Is that better?

Thanks for the link. Interesting report. Look forward to exploring this topic further.

 
At 9/16/2009 7:30 PM, Anonymous Benny The Repentant said...

Yes, the phtoto is better. You are an attractive blonde. Probably a femme fatle. Show this to your husband.

 
At 9/16/2009 10:31 PM, Blogger QT said...

Thank you but I still want those links. There are a great many differences between the U.S. and Canada in these areas. I make no claims about my understanding of the extent of government interventions in the U.S.; it is difficult enough to understand the extent of mendacity in my own country.

BTW - The colour is stress formula 1..grey. I am perhaps, too honest.

Fun talking with you :)

 

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