Sunday, March 27, 2011

"Healthcare Marketization" Could End the Crisis

Some key paragraphs from the editorial "Private enterprise fix could save healthcare":

"Does America have a “grocery system”? An “automobile system?” A “tourism system”? The nation does, of course, have a “healthcare system” and the fact that the medical-services sector can’t be described as a market… well, it’s the prime cause of the “healthcare crisis.” 

Consumers make choices about employment, food, housing, clothing, transportation, investment, and leisure peddled by an uncountable — and ever-changing — number of vendors. Price, convenience, and quality vary. Transparency is standard. Accountability is enforced, at times rapidly and ruthlessly, by both sellers and buyers. Yet satisfying the nation’s healthcare needs involves an appalling supply of waste, waiting, bureaucracy, and buck-passing. 

Consumer-driven medical services, if fused with health savings accounts that insure against catastrophic conditions, would revolutionize the way physicians and hospitals — gulp — “do business.” Savings would be substantial. The “crisis” would quickly end."

53 Comments:

At 3/27/2011 11:03 PM, Blogger Benjamin said...

If you like the American farm system, and if you like the American defense system, then you are going to love Obamacare.

 
At 3/28/2011 1:51 AM, Blogger PeakTrader said...

U.S. health care with over 130,000 pages of government regulations helps explain the following:

"More money per person is spent on health care in the USA than in any other nation in the world."

Brain drain to brain waste:

'Brain Waste' Thwarts Immigrants' Career Dreams
03/26/11

After finishing medical school in Bogota, Colombia, Maria Anjelica Montenegro did it all – obstetrics, pediatrics, emergency medicine, even surgery. By her estimate, she worked with thousands of patients.

None of that prepared her for the jobs she's had since she moved to the United States: Sales clerk. Babysitter. Medical assistant.

That last one definitely rubbed raw at times.

"I know I was working in my field," the 34-year-old New York resident said. "But that is medical assistant. I'm a doctor."

There's a series of exams, the first of which cost $1,000 alone, Montenegro said. She also has to complete a residency, a requirement for all graduates of American medical schools. There are a limited number of residency slots overall which makes it a very competitive process for everyone, but even more so for foreign medical school graduates.

Montenegro has one more exam to pass before she can apply for a residency, a process that will take at least a year or two. There's no guarantee that she'll be accepted for a residency; At times, she fears she may never work as a doctor here.

"So many times I want to get my things and my passport and go back to my country," Montenegro said. Over the years, she heard stories about the lifestyles her doctor friends in Colombia were able to afford as she worked at various low-wage jobs.

While Montenegro agrees that her credentials and her ability to provide good health care should be vetted before she's allowed to work in this country, she thinks having to train as a general practitioner all over again when she already has experience is a waste – especially for the U.S., she said, because she speaks fluent Spanish and could be an asset in any Spanish-speaking community in need of a doctor.

"I'm ready to do that and help people," she said.

 
At 3/28/2011 3:50 AM, Blogger juandos said...

Hey PT, thanks for that nugget of information: This information is, unfortunately, very complex because of decades of healthcare legislation which has made healthcare the most regulated industry in our country. Over 130,000 pages of federal regulation govern everything hospitals and doctors do. In addition to this, there are over 1500 state mandates regulating the health benefits products (aka health insurance) that we have available to us...

 
At 3/28/2011 8:31 AM, Blogger Hydra said...

Price, convenience, and quality vary. Transparency is standard.

================================

Transparency is standard? You have got to be kidding me. The only places it is remotely standard is when it is enforced by law.

 
At 3/28/2011 8:32 AM, Blogger Hydra said...

U.S. health care with over 130,000 pages of government regulations helps explain the following:

"More money per person is spent on health care in the USA than in any other nation in the world."

=================================

How is that statement explained unless we know how many pages of regulation govern the other systems?

 
At 3/28/2011 8:36 AM, Blogger Hydra said...

This comment has been removed by the author.

 
At 3/28/2011 8:37 AM, Blogger Hydra said...

Construction and operation of aircraft are highly regulated, too.

A light plane that could be built for $100,000 easily sells for a million, due to regulation and legal risk.

 
At 3/28/2011 9:51 AM, Blogger Che is dead said...

The left has done everything in their power to undermine the private healthcare market. They've imposed needless and expensive regulation. They've fought against small businesses being allowed to join together in order to get better group rates on insurance. They've opposed allowing interstate competition between health insurance companies. They were against the establishment of health savings accounts. They've used their control of state governments to impose expensive mandates and restrict intrastate competition and choice. They've reduced Medicaid and Medicare reimbursement rates in order to shift costs onto private insurers in order to make private insurance more expensive. The list could go on and on. All of this they have done with one goal in mind - a government takeover of the health care system. They understand that government control of medicine is they keystone of socialism. To accomplish their goal they must first discredit the existing system in the eyes of the public. That is why they were willing to ignore public sentiment and pass Obamacare. And that is why so many unions and left-wing groups, who are now seeking temporary waivers from the effects of the law, were so willing to support it's passage.

 
At 3/28/2011 10:34 AM, Blogger Paul said...

Che,

"They've reduced Medicaid and Medicare reimbursement rates in order to shift costs onto private insurers in order to make private insurance more expensive."

And then the left actually brags about how "efficient" is Medicare.

 
At 3/28/2011 10:52 AM, Blogger Ron H. said...

"A light plane that could be built for $100,000 easily sells for a million, due to regulation and legal risk.

Please cite references. Links preferred.

 
At 3/28/2011 1:51 PM, Blogger Hydra said...

They've fought against small businesses being allowed to join together in order to get better group rates on insurance.


I see no reason that coops should not be able to contract for health insurance policies

 
At 3/28/2011 3:09 PM, Blogger juandos said...

"How is that statement explained unless we know how many pages of regulation govern the other systems"...

You're a big boy hydra do your own homework but I'm guessing you can bet the farm that 'NO' other country has but such a load on their medical market place...

A Brief History of the Result of Government Intervention in Healthcare

Government Increasing the Cost of Medicine Again

 
At 3/28/2011 3:37 PM, Blogger Hydra said...

I don't see that interstate competition buys you very much. Besides, if you think regulation is the problem, why would you want 50 sets of regulations?

Unless you think that companies will all gravitate to the state with the least restrictive regs. And if that is the case, what happened to the argument about more competition?

All i can tell you is that while my state was letting my insurance compay run roughshod over me, the neighboring state was suing the same company (although chartered in another state) for treating its citizens to the same practices.

Looks like a sure fire way to increase costs to me, like equireing special pollution control standards for engines sold in California, or the Japanese system of 50 cycle electricity in the west and 60 cycle in the east. or lighter truck weights in Arkansas.

 
At 3/28/2011 3:47 PM, Blogger Hydra said...

Government Increasing the Cost of Medicine Again

===============================

Ok so a blog is a good source of data. I did not see anywhere in that article that the government did anything to increase the cost of that drug.

I'm pretty sure the cost is still the same as before that regulation.

What is did see was the the company took advantage of the regulation to raise the PRICE.

How is that the governments fault?

But your example is besides the point. The French have a complicated health care system, and with their penchant for bureaucracy, I'd be willing to bet that their system has tons of regulation.

OK, I get it, regulations increase costs, like sprinkler systems for new homes in california.


But your example does explain why we have so many regulations: they are good for (some) businesses.

 
At 3/28/2011 3:47 PM, Blogger juandos said...

"Besides, if you think regulation is the problem, why would you want 50 sets of regulations?"...

What makes you think I want even one let alone 50?

 
At 3/28/2011 3:53 PM, Blogger Hydra said...

The list could go on and on. All of this they have done with one goal in mind - a government takeover of the health care system.

==================================

You must think the left is well organized and dedicated if they can pull off a multi decade conspiracy like that.

 
At 3/28/2011 4:14 PM, Blogger juandos said...

"You must think the left is well organized and dedicated if they can pull off a multi decade conspiracy like that"...

Ever heard of Woodrow Wilson and FDR?

 
At 3/28/2011 4:38 PM, Blogger PeakTrader said...

Hydra, maybe Wikipedia will convince you:

Health care in the United States

"Health care is the most heavily regulated industry in the United States."

Rather choosing a Rolls Royce or nothing (the overregulated system), or a Ford Pinto (universal health care), allow them to choose something much better than a Pinto at a much lower price than a Rolls.

 
At 3/28/2011 4:48 PM, Blogger Hydra said...

I'm not arguing right or wrong here.

I'm just suggesting that the argument that says the Left has been succssful in getinng all these things accomplished in furtherance of their long term conspiracy to take over the world, and been doing it for decades, while the Right has een unable to stop them is a particularly strong argument for why I should invest in the Right.

If you tell me more money was spent on the Beatles than any other four piece band, then of course I'm thinking boy, they must be really wasteful, and that is caused by all the regulations they had to bear.

?????

A lot of countries out there have some form of national health insurance, and the results and kind of plans are all over the map. If there is a correlation between pages of regulations, costs, and results, then I have not seen it.

 
At 3/28/2011 5:10 PM, Blogger Hydra said...

"conservative think tank Cato Institute published a study which concluded that regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.a that health care is the most heavily regulated industry in the United States"


The neutrality of this article is disputed.

================================

It is a claim with out support.

How would you begin to evaluate how many pages of regulation affect one industry or another, or the same industry in different nations?


Regulations raise costs. I get it. But your argument still doesn't follow. Either that we must have more reuglation than other countries with lower costs, or that health care is more heavily regulated than, say, manufacturing explosives.

 
At 3/28/2011 6:07 PM, Blogger Ron H. said...

"I'm pretty sure the cost is still the same as before that regulation.

What is did see was the the company took advantage of the regulation to raise the PRICE.

How is that the governments fault?
"

That's a cute play on words. You should be pleased with yourself. Surely even you realizes that the article is addressing the cost to the consumer.

Are you so obtuse that you aren't aware that granting a monopoly allows a company to charge whatever they please? without the "granting", there wouldn't likely be a price increase.

Learn some economics!

Learn some economics!

 
At 3/28/2011 8:53 PM, Blogger Hydra said...

Cost is what something costs, price is what it sells for, value is what it returns to its owner.

Learn some accounting.

 
At 3/28/2011 8:58 PM, Blogger Hydra said...

A monopoly allows a company to charge more but does not require it to. Such behavior will be an incentive for competitors to find a cheaper way, just as unions are an incentive for businesses to eliminate labor.

 
At 3/28/2011 11:24 PM, Blogger Ron H. said...

"Cost is what something costs..."

Oh! That clears it up. Did you actually read that before you published? I think not.

"price is what it sells for..."

That's pretty close. Although cost and price are largely interchangeable, cost often refers to an amount already spent, whereas price commonly refers to a hoped for amount, a transaction not yet completed.

If you are a producer, what you pay for an input may be referred to as a cost, while what you hope to get in exchange for the product you have added value to, is often called the price.

"...value is what it returns to its owner."

...in exchange for something else. You were on the right track, you just didn't finish.

Value may be the subjective worth of something. Obviously, all value is subjective.

The three words are sometimes used interchangeably, with only minor shades of difference in meaning.

In my previous comment, in which I corrected your frame of reference after you used some clever wordplay, the cost discussed in the article juandos linked to, was from the consumer's viewpoint, not the drug company's.

That cost did indeed go up.

While you are checking definitions, you might want to include "monopoly", as your next comment indicates that you have no idea what the word means.

"A monopoly allows a company to charge more but does not require it to. Such behavior will be an incentive for competitors to find a cheaper way, just as unions are an incentive for businesses to eliminate labor."

Monopoly precludes competition, so there is no one to find a cheaper way. Get it?

That's why a monopoly is only really possible when created by government force.

 
At 3/28/2011 11:59 PM, Blogger Ron H. said...

"conservative think tank Cato Institute published a study which concluded that regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.a that health care is the most heavily regulated industry in the United States"


The neutrality of this article is disputed.

================================

It is a claim with out support.
"

I see that you aren't familiar with using Wikipedia, so let me try to help.

I am assuming, (dangerous) that you believe the comment about neutrality refers to the Cato study, but it really refers only to the wikipedia article itself.

Here's another thing: Have you noticed those little blue numbers in brackets scattered throuout the Wiki article? Those direct you to references at the end of the article which point to the source material used to support the Wiki article. Pretty clever idea, don't you think? Try it out. I think you will be pleasantly surprised.

In this case, the 32 page Cato study which is well written and thoughtful. It in turn, includes 5 1/2 pages of notes and references as support.

So, when you say "unsupported, just what do you mean?

 
At 3/29/2011 11:34 AM, Blogger Hydra said...

I understand that the warning comment on neutrality applies to the article. No such warning is necessary for the CATO institute, since its purpose is to promote their own bias.

The CATO article itself offers no credible evidence to support the statement.

 
At 3/29/2011 12:23 PM, Blogger Hydra said...

"The congressional report found that regulatory costs run $688,944 per firm in the manufacturing industry — $500,000 more than the average for other industries."

=============================
"There are hunndreds of religions in the world, each claiming to be the one, true, faith.

At most, one of them is correct."


Bertrand Russell

 
At 3/29/2011 12:47 PM, Blogger Ron H. said...

"No such warning is necessary for the CATO institute, since its purpose is to promote their own bias.

The CATO article itself offers no credible evidence to support the statement.


I'm just guessing, but you didn't read the Cato article, am I right?

Past experience with you tells me that you don't read references when they are provided. Why would you waste time reading something you believe you won't agree with, when you already know the answer?

So, when you claim the Cato study offers no credible evidence, you are pulling something out of your ass once again, Right?

Your unwillingness to consider ideas that differ from your existing narrow worldview is causing you to miss many important concepts. Try reading something new.

 
At 3/29/2011 1:49 PM, Blogger Hydra said...

I'm just guessing, but you didn't read the Cato article, am I right?

=================================

I have not finished reading the article, but I find four glaring logical fallacies, on the first page.

In a quick search, I find almost nothing that compares regulatory costs between industries, which would be required to support the CATO premise.

I find evidence that regs hurt samll firms more than large. I find evidence that industry sometimes encourages regulation on itself, knowing that weeding out the weaker firms will raise profits more than it raises cost. I find evidence that regulatory costs actually increase mortality and morbidity. I find evidence of individual industries claiming they are heavily regulated, but so far, nothing that sets out to simply show the difference in regulatory costs between industries.

 
At 3/29/2011 2:52 PM, Blogger Ron H. said...

"I have not finished reading the article, but I find four glaring logical fallacies, on the first page.

In a quick search, I find almost nothing that compares regulatory costs between industries, which would be required to support the CATO premise.
"

I am pleasantly surprised! You are actually reading a reference. Good for you. I take back my comment about your ass...for now.

What fallacies have you found?

The Cato study indicates that healthcare overall, is the most heavily regulated sector in the US economy. That may not translate directly to a comparison with costs in other sectors.

What it DOES indicate, however, is that the cost of regulation is twice the benefit. If you applied your handy little total cost formula, you would have to agree that government cost is too high, and regulation should be reduced until it costs less than the benefit.

Perhaps eliminationg the FDA would be a good place to start. No? Then where?

 
At 3/29/2011 6:08 PM, Blogger Hydra said...

....is that the cost of regulation is twice the benefit. If you applied your handy little total cost formula, you would have to agree that government cost is too high, and regulation should be reduced until it costs less than the benefit.

=================================

But if cost of regulation is always twice the benefit, then all regulation should be eliminated.


Self fulfilling prophecy or circular logic.




Try it this way. Consider the first term in my equation, Cost of Production.

Cost of Production includes as negative costs, the Benefits of Production. The Benefits are the goods themselves, and jobs produced, taxes paid, and the profit. Part of the cost of production is compliance with the regulations, along with all the other costs of inputs.

Given that the company is still in business, the benefits must outweigh the costs. If things were as bad as you claim, every business would shut down or move.

That does not happen because we know that regulations are good for the strong businesses. Yes there are costs involved with compliance, but strong businesses may increase market share by more than the costs of compliance, so it is in their interest to lobby FOR a certain amount of regulation.

 
At 3/30/2011 12:05 AM, Blogger Ron H. said...

"But if cost of regulation is always twice the benefit, then all regulation should be eliminated."

You are veering sharply off track here. You have added the word "always" to a discussion of regulations. That word hasn't appeared before.

But yes, if regulation is "always" twice the benefit, then all regulation should be eliminated, as you yourself recommend by using your lowest total cost formula. You have even used a quote from the GAO on several occasions to support this idea. You can't change your tune now.

The Cato study concludes that the cost of regulation in the healthcare sector is twice the benefit. Try to focus on that discussion.

"Cost of Production includes as negative costs, the Benefits of Production. The Benefits are the goods themselves, and jobs produced, taxes paid, and the profit."

This is nonsense. Jobs are not a benefit to a business, labor is an expense. Profit isn't a cost of production, it is the excess of the selling price of a good or service over the total cost of producing it. It is an entrepreneurs return for his investment of capital and compensation for his assumption of risk. A profit is what's left, if anything, after all expenses are paid.

It's no wonder you are confused and write nonsense if this is what you believe.

"Given that the company is still in business, the benefits must outweigh the costs."

What company? we don't know that it is still in business. What are you babbling about?

No, the benefits do NOT outweigh the costs. That's the whole point.

Firms lobby for regulation that give them advantage against competitors. They prefer regulations they can tolerate but which seriously harm their competitors, or hinders entry to the market. Think Sarbanes-Oxley.

So, what 4 glaring logical fallacies did you find on the first page of the Cato article? What disagreements do you have now that you have read the entire study?

By the way the author of the study is Christopher J. Conover, assistant research professor with the Center for Health Policy, Law and Management
in the Terry Sanford Institute of Public Policy at Duke University, not anyone at Cato.

 
At 3/30/2011 3:05 PM, Blogger Hydra said...

Ron: your statement was that regulation costs twice the benefit it supplies.

That is an unqualified statement which implies that it is always true. I didn't inject anything.

 
At 3/30/2011 3:09 PM, Blogger Hydra said...

In no way does the formula imply that lowest total cost is obtained by eliminating the government cost term. Neither do you seem to understand the gao policy statement.

 
At 3/30/2011 3:15 PM, Blogger Hydra said...

We agree that if the regulation costs more than the benefit, the regulation should not exist. As a practical matter this means that you cannot demand that I spend $200 on fence to keep my pigs from doing $100 damage to your garden.

Correct?

 
At 3/30/2011 8:59 PM, Blogger Hydra said...

The Cato study concludes that the cost of regulation in the healthcare sector is twice the benefit. Try to focus on that discussion.

===================================

They reached that conclusion, but I don't see how they reached it. I could not do it with the data provided.

Drop back to the original argument. My copmplaint was about the juxtaposition of the idea that we have highest health costs in the world with the idea that healthcare is the highest regulated business in the US.


Even if the second part is true, which is not supported by the CATO study as far as I can see, there is no way to compare our level of rugulation with thier level of regulation.

The argument that we have the highest health costs in the world because our health industry is the most regulated on our nation, simply does not follow.

That is a logical bomb whether CATO is right or wrong.

 
At 3/30/2011 9:13 PM, Blogger Hydra said...

CATO can reach any conclusion they want, but they have not sold their product until I buy it.

Cost is what something costs, Price is what it sells for, not what is hoped for. That is called an offering.

Value is not at all subjective. It is only that we are not as adept at measuring it, and onereason for that is that we do not wish to become adept. It is far too inconvenient in regards to our thoughts about free enterprise.

Ten years ago I bought two cars, roughly equal in price. Today I have driven one of them twice as far as the other, with a fraction of the repairs, and the resale price for such cars is well known.

I think I could give a pretty good accounting as to the value of one vs the value of the other. Not to the penny, as I can the price I sold one for, but more than good enough for useful comparison.

If VW wants to sell me another car, they will have to make an offering that is 3 to 4 thousand less than their competitor.

If CATO wants to sell me an idea, they need to offer better value than that article provides.

 
At 3/30/2011 9:45 PM, Blogger Hydra said...

Profit isn't a cost of production,

=============================

If you want to argue at least quote me accurately.

The first term, production costs, is all the costs of production minus allthe benefits of production. There is no flag as to whom the benefits accrue.


There exists a factory that makes soap. The direct costs are lye, lard, water, machinery, land, labor, and operating capital. The direct benefits are markets for producers of woodchips, pigs, pipe, mixers and strainers, laborers, and bankers.

And of course soap, which is not an insignificant benefit, to all of us, whether we use it or not. And finally Profit.

So the company mixes up the stuff and strains off the product. Not wnating to wast the effort, they do a good job of straining, but at some point, the cost of straining exceeds the value of product produced or recovered, and whatevver is left is waste, which they dump in the sewer or river.

Eventually, they dump enough to hurt the fishing and someone complains, haey, this is costing me money.

The result is regulation of the soap making. But, as long as soap making continues, it continues because the benefits exceed the costs, including the costs of regulation.

And that is only the benefit to the company. So as long as they are in business the "regulation costs too much" argument is moot.

Even if the company goes out of business, because they cannot afford the regs, it still doesn;t mean the regs are too stringent: the fish might be worth more than the soap.

 
At 3/31/2011 4:30 AM, Blogger Ron H. said...

"Ron: your statement was that regulation costs twice the benefit it supplies.

That is an unqualified statement which implies that it is always true. I didn't inject anything.
"

LOL

You need to be able to move from one comment to the next without losing track, and without forgetting what others have said, and even what you have said.

Here's what I said:

"What it [the Cato study] DOES indicate, however, is that the cost of regulation is twice the benefit."

Here's what you quoted from a Wikipedia entry:

"conservative think tank Cato Institute published a study which concluded that regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.a that health care is the most heavily regulated industry in the United States"

Clearer now?

"In no way does the formula imply that lowest total cost is obtained by eliminating the government cost term. Neither do you seem to understand the gao policy statement."

Your formula provides lowest total cost with all terms included, only if the dollar benefit of regulation is higher than the cost. If, as you misquoted me, the cost is ALWAYS higher than the benefit, then yes, lowest total cost is only obtained when government cost is 0.

The GAO quote is something to the effect that a regulation shouldn't exist if it costs more than the benefit it provides.

"We agree that if the regulation costs more than the benefit, the regulation should not exist."

That is correct, so the lowest cost if regulation ALWAYS costs more than the benefit, is obtained by elimination all regulation.

I said this much earlier on this thread. You also argued against it as seen in my quote of you in this very comment.

"In no way does the formula imply that lowest total cost is obtained by eliminating the government cost term."

Why do you keep going in circles with this? You don't seem to understand your own formula. You are wasting my time.

 
At 3/31/2011 5:13 AM, Blogger Ron H. said...

"My copmplaint was about the juxtaposition of the idea that we have highest health costs in the world with the idea that healthcare is the highest regulated business in the US."

Let me help you. You are having trouble reading, or nuance is just beyond your understanding.

Here"s the bit I think you are complaining about:

"U.S. health care with over 130,000 pages of government regulations helps explain the following:

"More money per person is spent on health care in the USA than in any other nation in the world.
"

Having 130,000 pages of regulation is intended to impress you with the idea that there is a lot of regulation. 130,000 is a big number.

Even you understand that there is a cost to compliance, so you should think that complying with 130,000 pages of regulation will cost a lot of money. No comparison is implied. You should only think at this point that healthcare regulations cost a lot of money.

"...helps explain.." here is the nuance. This is not an absolute. This is your bridge to the second statement.

"More money spent in US on healthcare than any other nation..."

Is that a problem? That seems straight forward.

So, there is is: No direct link of cause and effect, only the suggestion that a contributing factor in high healthcare costs is the high cost associated with a large number of regulations.

That sounds reasonable to me. While you seem to struggle with it, you appear to accept without question the extremely tenuous connection suggested between burning fossil fuel, and climate change. Why is that?

 
At 3/31/2011 5:44 AM, Blogger Ron H. said...

"CATO can reach any conclusion they want, but they have not sold their product until I buy it."

You don't seriously think that anyone at Cato cares what you think, do you?

"Cost is what something costs..."

You're going to stick with that one, are you?

"Price is what it sells for, not what is hoped for. That is called an offering."

So the sign at my local grocery store that reads "$2.39/lb" is an offering? I thought offerings were what you burned on an alter.

Can I counter the store's "offering" of $2.39/lb with some amount I prefer?

You're funny.

"Value is not at all subjective. It is only that we are not as adept at measuring it..."

You destroyed that argument in the very next sentence.

"Ten years ago I bought two cars, roughly equal in price."

Do you understand the word subjective? We each determine the value of things for ourselves. That means "subjectively".

Our value are not the same. There is no "objective" value for anything.

When you bought two cars, you valued them more than the seller did. If that weren't true, there wouldn't have been a sale.

The value of the car you sold was greater than the value the buyer placed on his money. The opposite was true for you. both of you were better off after the sale.

The "value" of the car you still have is the amount of something else you will give it up for. Think opportunity cost. What you paid for it and how much you have spent on it mean nothing at sale time. When you decide to sell it, will the sign you put in the window include a price, or an offer?

When it is sold, you can say "The price I sold it for was $60."

The new buyer can say "It cost me $60."

See the difference in common usage of those two words?

I thought you took some graduate level economics courses? It sure doesn't show.

 
At 3/31/2011 1:31 PM, Blogger Hydra said...

The new owner, in your example is using the word cost wrongly.

The price he paid is only the first element of his cost for that item.

Your argument isn;t about the meaning of the words, it is about the boundary of the system, which you must defince first.

One could argue that an item only has one cost, which accumulates throughout its lifetime: we call that th life-cycle cost.

 
At 3/31/2011 1:39 PM, Blogger Hydra said...

Let me help you. You are having trouble reading, or nuance is just beyond your understanding.

===================================

You did not help. Those two ideas are entirely disassociated. There is no logical connection between how much regulation we (might or might not have) compared to other us industries, and the fact we have the highest health costs in the world. We have no way of comparing our health regulations to other countries.

Especially since most of them have some kind of national "intrerference".

 
At 3/31/2011 1:48 PM, Blogger Hydra said...

Having 130,000 pages of regulation is intended to impress you with the idea that there is a lot of regulation. 130,000 is a big number.

=============================

A big number compared to what? The amount of regulation in other countries?

I'm not impressed with the number, however I am disaffected by the obvious intent to impress me.

If you want to impress me, don;t try to distract me with meaningless or dissociated facts.

Even if they happen to be correct.

 
At 3/31/2011 1:51 PM, Blogger Hydra said...

"conservative think tank Cato Institute published a study which concluded that regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.a that health care is the most heavily regulated industry in the United States"

Clearer now?

===========================

No, because I don't see how cato made their case.

 
At 3/31/2011 1:56 PM, Blogger Hydra said...

You destroyed that argument in the very next sentence.

"Ten years ago I bought two cars, roughly equal in price."

====================

You did not follow the argument through. I see very little subjective in how I determined the value I recieved.

The cars were roughly equivalent, it was not a subjective issue of one being a limo and the other a sports car. Each was merel transprotation.

After a period of time I could figure out pretty well which one costs me more money per mile, and therefore which one provided a better value for what I spent.

What is subjective about that?

 
At 3/31/2011 2:04 PM, Blogger Hydra said...

When you bought two cars, you valued them more than the seller did. If that weren't true, there wouldn't have been a sale.

The value of the car you sold was greater than the value the buyer placed on his money.


===============================

Listen to yourself, you sound like a parrot.

When I bought two cars, I valued them equally and paid the same money for them. Over time my costs for one increased a lot faster than my costs for the other.

The value I received from my car has nothing to do with the value the dealer received for my money or the suvbsequent buyer received from the car.

However, the subsequent buyer knew all about the service history of that model, because it has been published - by other owners, not the dealers. His value expectation is probably better informed than mine was, but it is entirely beside my point, which is that we can put prices on many things which we prefer to think of as subjective.

 
At 3/31/2011 2:13 PM, Blogger Hydra said...

"CATO can reach any conclusion they want, but they have not sold their product until I buy it."

You don't seriously think that anyone at Cato cares what you think, do you?


=================================

No, I do not, but i'm not trying to convince them of anything.


Their mission in publishing is to present ideas that will change policy. They go to a lot of trouble and expense to publish their ideas. If they convince me I may support their ideas to my representatives.

But I seriously doubt they care (very much) what I think either.


They have put an offer in the window, but I'm not buying at that price.

Go back and look at figure one, and see if you can tell me what is says.

 
At 3/31/2011 2:16 PM, Blogger Hydra said...

Developing a winning product offering


http://www.blueminegroup.com/articles/1_winning_product_offering_020810.php

============================

For just one example.

 
At 3/31/2011 2:47 PM, Blogger Hydra said...

Im not convinced that we have the most expensive healthcare in the world because healthcare is the most heavily regulated industry in the US.

Even if the second part is true, which I don't think is proven, it has no connection to the first part of the argument.


If you said we have the most heavily regulated health care in the world, and that contributes to our costs, then you might have an argument.

But then I would point out that one of the arguments against foreign style health care is that they reduce costs by REGULATING what services are available.

 
At 3/31/2011 4:28 PM, Blogger Hydra said...

Definitions of offering price on the Web:
Ask price, also called offer price, offer, asking price, or simply ask, is a price a seller of a good is willing to accept for that particular good.
en.wikipedia.org/wiki/Offering_price

Definitions of sale price on the Web:
The price at which the property sold.
www.douglas.co.us/assessor/QuickReports_Glossary.html
The actual price a property sells for, exclusive of any special financing concessions, loan fees, sales commissions, or other added on financial burdens related to the cost of sale.

Definition of product Cost on the web.
Product Cost
The product cost is the cost of all the different components which make up the product. This may either be the purchase price if the components are bought from outside suppliers, or the combined cost of materials and manufacturing processes if the component is made in-house.

product cost
Definition
Sum of all costs associated with the production of a specific quantity of a good or service.

Definition of value on the web
value of a product includes cost and a subjective part associated with cost. Value of a product can be expressed in units of currency if the subjective part of it is assessed in units of currency.
Definition of value depends on the school of economics:
In Classical Economics, though exchange value is recognized, economic value is not, in theory, dependent on the existence of a market and price and value are not seen as equal.

==============================

Notice that the definitions of value support my argument that it is not so much that values are subjective, as it is that we have not yet agreed on a procedure to reach them. (You can't put a value on human life!) Well, of course we can, we do it every day.

Once we do that, we will have answers that are consistent if not correct.

First figure out what the variation is, then adjust your shot pattern for accuracy so that you are likely to be off in one direction as much as the other, then start working on precision.

 
At 4/01/2011 2:21 AM, Blogger Ron H. said...

"You did not follow the argument through. I see very little subjective in how I determined the value I recieved."

You cannot really be this dense. This must be intentional obfuscation on your part.

When you bought cars, your subjective value of the car wasn't the same as the subjective value the seller. There's no other way I can say it. There was no objective or absolute value of the car. It was whatever you thought it was and whatever the seller thought it was. Those values weren't the same, so you mutually agreed to a trade that benefited you both. Otherwise there would have been no sale. This is very basic economics. You are either just playing games here, or you are one of the worlds stupidest human beings.

 
At 4/01/2011 2:40 AM, Blogger Ron H. said...

"If you want to impress me, don;t try to distract me with meaningless or dissociated facts.

Stay on track. I don't want to impress you, although you seem intent on impressing me with your stupidity.

"The new owner, in your example is using the word cost wrongly.

The price he paid is only the first element of his cost for that item.
"

You are playing word games. If I asked you how much that car cost you, I doubt that you would respond that you didn't know, because you weren't yet done with it.

"No, because I don't see how cato made their case."

I can't help you. Your understanding is limited. I have no further suggestions on that subject.

"No, I do not, but i'm not trying to convince them of anything."

They aren't trying to convince you, nor are they trying to sell you anything. The information is presented for people who are interested in the subject, and who understand what they are reading. That group doesn't include you.

 

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