Obama asks the question.............

[BK]

Re: Obama asks the question.....FIRE - Immigration- Healthcare

Before I start I know lots of Immigrants to this country - and they have been vital to the success of America.....but,.......anything in excess leads to chaos....

The FIRE economy boomed and the Real Estate boom led to a need for lots of manual labor. We needed people to cut the lawns of massive condo/Townhouse developments. Home values surging made everyone feel rich and No one wanted to do their own landscaping any more. The few manufacturing companies left in America found it difficult to attract workers when the FIRE economy was generating lots of Financial sales jobs and all the related supporting roles. Luckily,there were many countries to the South of USA where men are unable to provide for their families because their economies are in ruins.

Our Political leaders decided to look the other way and allow immigrants to flow illegally over our borders to fill the need for low end labor jobs (day laborers for contractors, landscapers, maids for hotels). None of these Immigrants arrive with much cash or Health Insurance. All humans are prone to disease and injury. Ultimately, many of these people looking to make a living for their family end up in the ER Room for an American Hospital. Immigrants can't go to a local doctor because they have no Insurance - Thankfully the Hospital ER must treat them and State/Federal Govts pick up the cost.

The Good News is many of these Immigrants end up going to Hospitals that really need Revenue. The Hospitals that serve neighborhoods that once housed Manufacturing towns have seen their Clients move out Inner City into newly built or upgrade Suburban housing. Many of these Hospitals would have closed up - but, Luckily the immigrants moved into these decaying Cities and provide much needed Revenue from State/Federal Government.
The Good news for Political leaders is that the Healthcare system was already challenged before the Immigrants arrived. The extra burden of providing healthcare to un-Insured immigrants was the straw that 'Broke the camels back'.

Another crisis for our enlightened Political Leaders to save us from - Thank goodness

[Ghent12]

Re: Obama asks the question.............

The underlying "why" is information asymmetry - a very common cause of market failures. In fact, the first paper to discuss information asymmetry in economic systems was directed toward health care.

In short, the patient must trust the doctor to tell them what tests they need. Doctors get paid according to the number of tests they perform. There are also market inefficiencies because of the reluctance to switch doctors. It is also difficult for people to evaluate the quality of treatment they are getting or to compare the treatment they are getting with the treatment they might be provided by a different care provider.

More info than you want here and here.

That is without merit. Information is a commodity, and so it is given or traded as a commodity. Are you saying that there is no possibility of an Eric Janszen of medicine that will tell you sane medical advice, contrary to the hype?

Again, such a conclusion that information asymmetry is to blame is short-sighted and misses the true cause. You need only ask, "Do I really need the super-expensive pill?" If not to the doctor offering it, you could ask another in a truly free market. The doctors willing to offer the less expensive generic variety of pills would have increased market share if and only if cost of healthcare were a major consideration. But I'm insured, so the cost to me is the same no matter which pill I take. And why are we insured so heavily now, when compared to the not-too-distant past?

Information asymmetry is not a cause for failure of markets in the sense you are speaking of. A general ignorance of the causality of market influences can be one of its failings, however.

[Munger]

Re: Obama asks the question.............

That is without merit. Information is a commodity, and so it is given or traded as a commodity.

This statement demonstrates ignorance of the well-studied subject.

"Information economics or the economics of information is a branch of microeconomic theory that studies how information affects an economy and economic decisions. Information has special characteristics. It is easy to create but hard to trust. It is easy to spread but hard to control. It influences many decisions. These special characteristics (as compared with other types of goods) complicate many standard economic theories."

http://en.wikipedia.org/wiki/Information_economics

Again, such a conclusion that information asymmetry is to blame is short-sighted and misses the true cause. You need only ask, "Do I really need the super-expensive pill?"

And how do you know whether you need the pill or not? You can't. That's the problem.

If not to the doctor offering it, you could ask another in a truly free market.

And how would others in the free-market know about your medical condition without taking the time and expense of examining you?

The doctors willing to offer the less expensive generic variety of pills would have increased market share if and only if cost of healthcare were a major consideration.

Because doctors are so impersonal that they are swapped like trading cards.

But I'm insured, so the cost to me is the same no matter which pill I take.

Totally neglects a little thing called a "deductible."

And why are we insured so heavily now, when compared to the not-too-distant past?

Because it's smart to spread risk.

Information asymmetry is not a cause for failure of markets in the sense you are speaking of. A general ignorance of the causality of market influences can be one of its failings, however.

You completely lack an understanding of information economics. Your response is pure uninformed free-market religion.

[Ghent12]

Re: Obama asks the question.............

You know whether you need the pill or not because you have an issue which caused you go to the doctor and were given a recommendation. Just as with legal service or other services, you can still verify the information given the vast majority of the time.

It's smart to spread risk, but that's not all that the current insurance schemes do. A routine check-up is not a risk but is covered under many policies.

I also have a high level of ignorance of astrology, but my BS detector is in working order enough to avoid it. A straw-man, to be sure, but it might get the point across. I don't subscribe to free-market religion, but I do subscribe to its logic.

[Munger]

Re: Obama asks the question.............

You know whether you need the pill or not because you have an issue which caused you go to the doctor and were given a recommendation. Just as with legal service or other services, you can still verify the information given the vast majority of the time.

As with anything, there is a cost to evaluate your various decisions. You know a symptom - your doctor tells you the issue. You were given a recommendation based on a number of factors. Health-care is complex and individualized. It is not a commodity. I could give you a second opinion on your lawsuit as well. You don't really know if what your attorney has told you is the right way to go about it. It might take me two weeks to two months to dig through (part of) the evidence that your current attorney has already evaluated. Maybe you want to pay for this; maybe not. Moreover, just as in medicine, two very good attorneys could come away with two completely different but sound strategies.

Libertarians prefer to assume everything is simple as letting people make rational choices. Complicated things like health care usually aren't that amenable to working out so neatly. Further, people aren't all that rational when it comes to things like their health.

It's smart to spread risk, but that's not all that the current insurance schemes do. A routine check-up is not a risk but is covered under many policies.

This very well may be due to the free-market; it would be wise for an insurer to incent preventative medicine, as it is much much more cost effective than waiting until something goes really wrong.

I also have a high level of ignorance of astrology, but my BS detector is in working order enough to avoid it. A straw-man, to be sure, but it might get the point across. I don't subscribe to free-market religion, but I do subscribe to its logic.

I don't dispute the logic of the free market. I dispute that it is a panacea. It works better with oversight. Always has.

[jhurt]

Re: Obama asks the question.............

As opposed to what we have now.[/quote]

Do fraud and abuse occur in current system...yes, largely secondary to government intrusions into the field. I really hope you will take a second to listen to what I am saying and not just defend the ground you've staked for sake of pride or principle. I believe in helping people less fortunate...but government isn't the way to do that. Putting a gun to another man's head and telling him to help someone else isn't charitable...it's the mob. Seriously, please respond to my comments on the VA system. If that isn't a foreshadowing of government run healthcare then what is? I still take tricare (the veterans form of medicare) not because it pays well (horrible...less than medicare) but b/c I want to serve our vets. Constantly they are complaining about the poor care they recieve at the VA...they would rather pay a copay to see me then go there for free. This is the future.

Also, regarding innovation you are dead wrong. Drug companies, equipment companies, surgeons...they are all trying to develop a better mouse trap for one simple reason...COMPETITION in the FREE MARKET. If you take that incentive away...yes, the incentive of profit...then they stop. No more new and improved drugs. Why spend millions in R&D if the government refuses to use or pay compensating costs for said drug...even if it is revolutionary. The government is rife with paying too much for everything from toliet seats to private jets...what makes you believe that things will be different when it takes over everything else? We live in the real world...the sooner people accept it the sooner we can get around to really fixing these issues as much as possible (it will never be perfect).

[Munger]

Re: Obama asks the question.............

Constantly they are complaining about the poor care they recieve at the VA...they would rather pay a copay to see me then go there for free. This is the future.

I didn't address it because it is anecdotal. I am not at all familiar with the VA system. I could list anecdotal horror stories of private care all day. chimsha posted earlier that he is very satisfied with the government run health care he's dealt with in Europe and would choose it over American style health care any day of the week. It doesn't provide any usable evidence though.

Here is some usable evidence - people are more satisfied with Medicare than with Private Insurance.

Americans "are deathly afraid that a government takeover will lower their quality of care." So writes Republican pollster Frank Luntz in a widely circulated set of talking points on how to stop a "government takeover" of health care.

Yet in summing up recent survey results, the Washington Post's Ceci Connolly and Jon Cohen write that poll questions "that equate the public option approach with the popular, patient-friendly Medicare system tend to get high approval, as do ones that emphasize the prospect of more choices."
Read more from Mark Blumenthal on Medicare polling at Pollster.com.

Indeed, the latest ABC News/Washington Post poll found 62 percent of Americans expressing support for "having the government create a new health insurance plan to compete with private health insurance plans." Other pollsters describing the public option as "government administered" and "similar to Medicare" gauged even more positive reactions: 67 percent in a Kaiser Family Foundation poll in April and 72 percent in the most recent CBS News/New York Times poll.

So if Americans live in fear of government intrusion into health care, why does likening the public option to Medicare make reform more popular?
Consider some results obtained by the same Kaiser tracking poll. When asked how much they trust various health care players "to put your interests above their own," respondents rank doctors (78 percent trust "a lot" or "some") and nurses (74 percent) at the top of the list.

Among those insured through Medicare, however, "the Medicare program" (68 percent) scores nearly as high. Among those with private insurance, "your health insurance company" earns much less trust (48 percent).

Perhaps that result is just about perceptions of corporate interests and not about patient experience?

We can test that question with data from a set of surveys known as the Consumer Assessment of Healthcare Providers and Systems. CAHPS is an initiative of the Department of Health and Human Services that developed a standardized survey questionnaire used by virtually all health insurance plans -- public and private -- to assess patient satisfaction. Most private insurers use the CAHPS questionnaire and disclose the data to the National Committee for Quality Assurance in order to receive their accreditation. So thanks to CAHPS, we have a massive collection of data comparisons of how patients experience and rate Medicare, Medicaid and private insurance.

Those comparisons show the depth of Medicare's popularity. According to a national CAHPS survey conducted by the Centers for Medicare and Medicaid Services in 2007, 56 percent of enrollees in traditional fee-for-service Medicare give their "health plan" a rating of 9 or 10 on a 0-10 scale. Similarly, 60 percent of seniors enrolled in Medicare Managed Care rated their plans a 9 or 10. But according to the CAHPS surveys compiled by HHS, only 40 percent of Americans enrolled in private health insurance gave their plans a 9 or 10 rating.



More importantly, the higher scores for Medicare are based on perceptions of better access to care. More than two thirds (70 percent) of traditional Medicare enrollees say they "always" get access to needed care (appointments with specialists or other necessary tests and treatment), compared with 63 percent in Medicare managed care plans and only 51 percent of those with private insurance.

So let's come back to recent poll results on the "public option." Both the ABC/Post and Kaiser surveys found that while Americans react favorably to the basic concept of a public option, they are easily swayed by arguments about having an unfair advantage against private plans or being the "first step toward single-payer, government-run health care." On the latter argument, the Kaiser survey moved support from a 67-to-29 percent majority favoring the public option to a 41-to-50 percent margin opposing it.

If the Medicare experience is so positive, why are people so easily talked out of expanding on it?

First, younger Americans not enrolled in Medicare do not share the enthusiasm of seniors for the program. Six years ago, the Kaiser Foundation asked a national sample of adults to rate the Medicare program. Medicare was hugely popular among those aged 65 or greater. Eighty percent rated Medicare favorably. Similarly, more than half of seniors (62 percent) considered Medicare "well run" compared to only 28 percent willing to say the same of "private health plans such as PPOs and HMOs that people get through their jobs."

Those under 65, however, had very different views. Only 45 percent rated Medicare favorably. Only 36 percent considered it well run, as compared to 47 percent who said the same about private health plans. While 73 percent of those over 65 said Medicare allowed patients to choose any doctor, only 28 percent of those under 65 agreed.

Second, the older Americans who like Medicare see little to gain from the public option since they like the coverage they have now. Democratic pollster Stanley Greenberg finds "little support among seniors" for reform. A recent survey conducted by Greenberg's Democracy Corps found a narrow plurality among all voters favoring "President Obama's plan to change the health care system" (43 percent to 38 percent), but net opposition among seniors (34 percent to 50 percent).

So, the Americans experienced with "government-run" health insurance like what they have and don't want to change it, and younger Americans enthusiastic for change don't know what they're missing.

[mcgurme]

Re: Obama asks the question.............

I'm willing to cede the points brought up by the actors in your movies, Munger, but the whole focus, as clearly demonstrated by Starving Steve's rants, is on the symptoms of the problem and not the root causes of the problem. I didn't live through the 1950's, but apparently in the time before HMO's, health insurance was only for catastrophic health events because insurance was never necessary for lesser issues. Now health insurance is ubiquitous with health care. Why?

Why: because both hospitals and insurance used to be non profit entities. Then the neocons came along and convinced everyone that "competition is good." The result is the system we have now. So much for your theories.

I work at a major medical school, with a well known teaching hospital. The hospital is going deeper and deeper into the red. They won't turn away people for emergency care, but of course none of those folks coming to the emergency room have insurance. With unemployment growing, the number without insurance is increasing. So, instead, they ask me to write more research grants, to help keep things not so in the red. Should my research work be paying for the running of a hospital? No.

But its okay. If the Republicans manage to block this, they'll reap what they sow. After a whole bunch of hospitals have gone bankrupt, then people will wake up from the Ayn Randian stupor and realize that the "free market" system didn't actually work.

[Mashuri]

Re: Obama asks the question.............

You cannot choose your insurance co. when they are a monopoly.

They are a monopoly because government intervention pushes out any hope of competition.

I posit the opposite: govt. has been bastardized by the corporations.

Here we go again with that straw man: "The government is just the poor victim of evil corporations and their greed!" Uh huh. Businesses have economic power but government has coercive and economic power. Coercive always trumps economic because people value their lives more than anything else. This means government chooses to give in to the bribes and kickbacks corporations offer them, meaning they are just as greedy as the people enticing them. Also, government is the only entity that can give these monopolies their teeth, as it requires coercive power to keep competition out.

A point of agreement: govt. should not be subsidizing health insurance. However, the insurance monopolies formed organically, as they often do, because of economies of scale. After a monopoly has thus been formed, markets will be more efficient after govt. intervenes to correct this market distortion.

Again, we have a cartel because government regulations and laws put up insurmountable barriers to entry for competition. This cartel goes beyond insurance and includes entities like the AMA (monopoly on the supply of doctors), FDA (monopoly on the drug market), etc. All this would come crashing down without a powerful government to uphold it. Why would we want to grant the biggest, baddest monopoly in the world even more power??

[c1ue]

Re: Obama asks the question.............

A SURGEON'S VIEWPOINT:

Government-run healthcare...that's what you want?

Be careful what you ask for.

It's strange to me that no one ever really considers the fact that the US does have a completely run government healthcare system already in existance. It's call the VA (Veteran's Affairs) health care system.

I'd like to point out a counter-example: The Naval Medical Center at Bethesda.

Bethesda is a military hospital and serves numerous naval as well as American governmental officials.

Yet I've never heard of Bethesday mentioned as a crappy hospital, or that Presidents and so forth prefer going to private doctors rather than this institution.

Perhaps the issue of VA hospitals has more to do with prioritization - hence funding - rather than anything else?

For that matter there is the FEBHP - the plan which Congress and much of the federal government operate under.

I don't have any experience with either Bethesda or the FEBHP - perhaps others can comment.

[Mashuri]

Re: Obama asks the question.............

I'd like to point out a counter-example: The Naval Medical Center at Bethesda.

Bethesda is a military hospital and serves numerous naval as well as American governmental officials.

Yet I've never heard of Bethesday mentioned as a crappy hospital, or that Presidents and so forth prefer going to private doctors rather than this institution.

Perhaps the issue of VA hospitals has more to do with prioritization - hence funding - rather than anything else?

For that matter there is the FEBHP - the plan which Congress and much of the federal government operate under.

I don't have any experience with either Bethesda or the FEBHP - perhaps others can comment.

Whether it's nice or not doesn't change the fact that our Veteran health care system is hugely cash-flow-negative. It's eroding capital and is unsustainable.

[Munger]

Re: Obama asks the question.............

They are a monopoly because government intervention pushes out any hope of competition.

Again, we have a cartel because government regulations and laws put up insurmountable barriers to entry for competition. This cartel goes beyond insurance and includes entities like the AMA (monopoly on the supply of doctors), FDA (monopoly on the drug market), etc. All this would come crashing down without a powerful government to uphold it. Why would we want to grant the biggest, baddest monopoly in the world even more power??

Again, way to not read the article I posted in response to this exact argument. The monopolies did not form because of "govt. intervention." There are many organic ways that monopolies form, contrary to libertarian wet-dreams. I'll repost it for you.

The reason the insurers are staying in business, though, is because barriers to entry in the health insurance industry are in practice quite high. Insurers benefit from pooling risk. The larger the pool, the better in terms of the insurer's ability to hedge its risk and build negotiating leverage with its providers. That makes it very difficult for a Five Guys or a JetBlue type of start-up to compete: they'll have trouble getting together enough customers to pool their risk adequately, and even if they do, they won't have as much negotiating leverage as the big guys. Health care providers may demand a better deal or refuse to accept them. As such, they'll never get off the ground.

Insurance, in other words, is a volume business, the main requirements for which are that (1) you have a lot of money pooled together and that (2) you've been around for awhile.

CIGNA and Aetna have a lot of money pooled together and they've been around for awhile -- but they don't have as much money, nor have they been around as long, as the federal government. It's possible, certainly, that the profit motive in the insurance industry has driven more innovation than we're giving it credit for. But that isn't my bet, and it isn't George Will's: There's no obvious reason that the government couldn't provide more for less. And if we are wrong, we would find out soon enough: if the public option can't deliver more bang for the buck than private insurers, it wouldn't gain much market share from them, and Will will have nothing to worry about.

What Will's position reflects instead is ideology: who cares that the federal government could build a better mousetrap? They're the government and that's bad. His argument is really no more sophisticated than that. If a libertarian conservative wants to make this argument, more power to them, but they absolutely should not be turning around and suggesting that a public option would raise health care costs. They're saying, rather, that they're morally opposed to the cost savings that would ensue.

If you've been reading me for a while, you'll know that, as compared with most self-described liberals, I'm unusually sympathetic toward the notion of the profit motive and private industry; I've defended Wall Street bankers and the AIG bonuses at various points during the financial crisis, among other things. It's my belief that private industry is usually able to deliver more efficient outcomes to the consumer than the government could.

But usually isn't always. And health insurance, as Will seems to admit, is one of those exceptions.

http://www.fivethirtyeight.com/2009/...tion-will.html

[Ghent12]

Re: Obama asks the question.............

Why: because both hospitals and insurance used to be non profit entities. Then the neocons came along and convinced everyone that "competition is good." The result is the system we have now. So much for your theories.

I work at a major medical school, with a well known teaching hospital. The hospital is going deeper and deeper into the red. They won't turn away people for emergency care, but of course none of those folks coming to the emergency room have insurance. With unemployment growing, the number without insurance is increasing. So, instead, they ask me to write more research grants, to help keep things not so in the red. Should my research work be paying for the running of a hospital? No.

But its okay. If the Republicans manage to block this, they'll reap what they sow. After a whole bunch of hospitals have gone bankrupt, then people will wake up from the Ayn Randian stupor and realize that the "free market" system didn't actually work.

We don't have a free market in health care right now, that's the point. How can you possibly call it one? The existence of gubment-mandated HMO's, Medicare, and Medicaid prove that.

You're also trying to tell me that hospitals were never businesses until "the neocons came in" and changed things? Right...


Munger - What is being proposed and worked on is not oversight of a free market. Not even close.

[MulaMan]

Re: Obama asks the question.............

I agree with Munger on all points.

Republicans provide socialisn for the rich, large corporations, and defense.

Demcrates provide socialism for the middle class and lawyers.

Those are your ONLY choices unless you vote for a Ron Paul and vote OUT all current senators.

Obama's plan is no more "socalist" then our current health care. The only difference is that under Obama's plan middle class America gets the benefits rather then big insurance firms.

A free market would be great, but America has not seen a free market in 80 years.

It really bothers me when people listen to TV news (CNBC, FOX, ..) and then start complaining about "Obama's Socialism" - Who do think pays for the news? Big corporate interests that fund the Republicans mostly.

[Mashuri]

Re: Obama asks the question.............

Again, way to not read the article I posted in response to this exact argument. The monopolies did not form because of "govt. intervention." There are many organic ways that monopolies form, contrary to libertarian wet-dreams. I'll repost it for you.

http://www.fivethirtyeight.com/2009/...tion-will.html

No, my post refutes that article just fine. Nate Silver (and you as well) are still focusing on symptoms instead of the root cause. There is nothing "organic" about our health "insurance" cartel. If I want to start my own insurance company to compete with Aetna, Blue Cross, etc, I am forced to conform it to the government's requirements if I want to get on their tax-subsidized employer program. I can't try anything innovative and my company is forced to be just like the guys I'm competing with. I'm limited to what kinds of insurance contracts I can offer, I have virtually no right of refusal and am prohibited from excluding any individual risk from being covered. Basically, I am forced into becoming a tool for income redistribution rather than a bona fide insurance company. This only scratches the surface of the regulatory nightmare I would be facing, especially when you get to my forced limitations with doctors, drugs, etc. There is no incentive for new entrepreneurs to jump in and compete. As a matter of fact, the opposite has been true as there are a lot less players in the game today than there were before the HMO act was passed.