Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

[Mn_Mark]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

I also note a lack of understanding of the differences in economics in different sectors. Some people here seem to think that the economics of health care is no different than producing SUVs. Either they didn't take any basic economics, or they slept through the classes. The economic drivers and market dynamics of health care, agriculture, education, transportation and basic resource extraction all differ significantly one from the other, as they each differ markedly from the economics of making cars or refrigerators.

OK, educate me, oh economics sage. Explain to me why it works quite nicely to have private insurance companies competing to sell auto insurance, but with health care we need to have the government run a giant insurance scheme instead.

Certainly there is a continuum of degree of socialism. I've never said otherwise.

I keep looking for an explanation of why the provision of health care services can't be handled in a very free market fashion just like so many other things. The answers seem to be variations of "it's just different, you idiot." If your answer is that health care is just too crucial to be left to the free market, I ask then why don't we have the government manage all the other things that are more important (food, clothing, shelter, etc)?

The thing is, it's really no different. The economics of all of those sectors you mention boil down to the same thing: people desire services and goods provided by other people, at the best price and highest quality they can bargain for. And the principles that make free markets work best apply just as much to people buying and selling refrigerators or fixing cars as they do to people selling pharmaceuticals and performing surgeries. Free markets work better than socialism because they reward people for creating what other people value and penalize people for not creating things other people value - maybe not always the things YOU value, but you shouldn't get to decide for other people how their money is spent.

So if you really think that SUVs and medical care are so different that the principles of the free market just don't apply to them in the same way, then kindly spell out the differences for me. Educate me rather than insulting me. I am genuinely willing to be convinced.

[derelict54]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Food is subsidized by the government and so is health care. Look all I am saying is that basic health services is/should be a right given to every citizen. The fact that 100k people die needlessly in America each year is wrong for the civlized leader of the world. Couple that with medical bills being the leading cause of bankruptcy and you have a system that is broken. especially when we pay 4% or more of GDP than any other civilized country in the world. Talk about not getting the bang for a buck.

The reason health care needs to be regulated is because costs are not properly disclosed to the end user/consumer and most of the time we do not have a choice. One, your doctor doesn't give you a menu, two if you are in an automobile accident you don't ask the ambulance driver what price one hospital is charging for severe head trauma & leg amputation vs. the other hosipital in the area and direct the driver where to go. Also becuase insurance has to play such a big roll in providing the detrimental costs of big ticket treatments like cancer or stroke, then everyone must pay in or the system is broken. Most of us have a choice when we go to get food, because we have time on our side and the cost is properly disclosed. I can decide whether I want to eat crab legs and ribeye, or ramen and potatoes. I really never knew why food was subsidized in this nation, but now I know its because if/when we screw over the rest of the world selling them junk bonds/mortgages that we our citizens still have food regardless how bad protectionism gets.

Look I am for paying extra insurance or even a savings account for the non-vital stuff that makes doctors want to work in America, and that's why I think we should have a basic coverage plan that everyone pays into, and leave it up to the individual if he wants to save/insure for cosmetic procedures or whatever. Free market would not win in health care for the simple fact that all good doctors would go to be doctors of the elite. They would only work in high end zip codes of the nation, and that goes against many of the great moral/ethic fabrics of those individuals which draw people to the industry. Wanting to help their fellow citizens.

Due to the sheer make-up of our society, it is very difficult for members of our society born into one calss to move up a class especially in the preferential elite corporate conglomerate shmegma we have. hence why you have paris hiltons of the world, rich passes on to rich for the most part. And while I may be born into middle class, does not mean that the bankstas will not find a way to take whatever I earn in this lifetime away from me. I might die poor, and if that is the case, does my son not deserve a decent shot at health care? I really don't know if he may or may not be a genius and be able to get a full ride at Harvard?

Nationalize physicals, doctor visits for ailments, emergencies, and serious conditions like cancer etc. If you want to pay more so you can go get your braces, tits, or the latest experimental plasma synthetic laser to shot out the colon cancer out of your ass then do. Just don't kick people onto the streets because their insurance refuses to pay any more health care coverage for what may or may not be terminal.

As for the pilots, after deregulation, salaries have been cut for profits, pensions slashed because of bankruptcies brought on by managers who do not properly hedge gas futures to try and gain a 2% gain quarterly profit because their bonus compensation is tied to the 3rrd quarter profits. What has ended up happening is that the profit margin that is increasingly small is now directly tied to the expense of your safety. Airliners travel on less reserve fuel than mandated by the FAA making the plane lighter and more fuel efficient, but dangerously close to falling out of the sky if they run into any dealys like a thunderstorm etc. Or that maintenance log is somewhat accurate, but only to pass the next next "regulated" inspection. And careful to read regulated inspection. Without the government the paperpushers under the CEO might be willing to skip a few maintenance procedures, to grab that extra 2% profit. Couple those reasons with the fact that you have a problem of not attracting highly educated minds anymore because their is no money to pay them. And people would rather become a FIRE worker than spend the outlay and dedicated time to become a pilot. The result is that we have a serious problem with safety in the future of the airlines. You don't make any money (very little) for the many years flying until you hit the majors, and even then you got your company ran by the same paper pushing finance geniuses that think someone can pay an option ARM without verifying income or assets. Willing to cut costs of safety and labor at the detriment of society so they can get their quarterly bonus, jump company and never look back at the wreckage they lay.

When it comes to safety and health, you need big brother just to make sure that people are being treated fair. Just like Wall Street needs the SEC to do its job to avoid the Madoffs in the world. Look I love free markets, but their is a balance of free market and the government, and it is there to make sure there is an even playing field. Just with health care and airlines, peoples physical health is at risk and the must be managed a little closer. If it is insurance everyone must pay into the system or else it breaks. It isn't like the business of beer, or tv's, or microsoft. People don't die without their beer and paris hilton tv shows, and they can live without it. If it breaks or goes skunky, then you switch brands and buy new stuff.

[GRG55]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

OK, educate me, oh economics sage. Explain to me why it works quite nicely to have private insurance companies competing to sell auto insurance, but with health care we need to have the government run a giant insurance scheme instead.

Certainly there is a continuum of degree of socialism. I've never said otherwise.

I keep looking for an explanation of why the provision of health care services can't be handled in a very free market fashion just like so many other things. The answers seem to be variations of "it's just different, you idiot." If your answer is that health care is just too crucial to be left to the free market, I ask then why don't we have the government manage all the other things that are more important (food, clothing, shelter, etc)?

The thing is, it's really no different. The economics of all of those sectors you mention boil down to the same thing: people desire services and goods provided by other people, at the best price and highest quality they can bargain for. And the principles that make free markets work best apply just as much to people buying and selling refrigerators or fixing cars as they do to people selling pharmaceuticals and performing surgeries. Free markets work better than socialism because they reward people for creating what other people value and penalize people for not creating things other people value - maybe not always the things YOU value, but you shouldn't get to decide for other people how their money is spent.

So if you really think that SUVs and medical care are so different that the principles of the free market just don't apply to them in the same way, then kindly spell out the differences for me. Educate me rather than insulting me. I am genuinely willing to be convinced.

My apologies if you felt insulted. However, it's a free world, so if you wish to continue believing there are no material differences in the economics of different sectors of the economy, so be it.


But before you make up your mind for good, you might want to ponder this:

• Unlike the economics of making, marketing and consuming SUVs, a portion of the demand for health care services is involuntary [accident, disease, etc.]...nobody plans to get lukemia.
• There will always be a portion of the population that does not have sufficient income to purchase any health care insurance [the working poor, unemployed, chronically unemployable people such as those perhaps with certain mental illnesses, etc.]...but unlike owning an SUV, they still need, at a minimum, the involuntary services.
• As technology has advanced both the range and the cost of available medical services has expanded dramatically, and one of the consequences is a blurring of the line between what constitutes essential baseline health care services and what is truly voluntary. For example, if a child is born with a life-threatening condition that in the past would have been fatal, but today can be corrected, but only with advanced, specialized, highly interventionist and expensive surgery, is that an involuntary procedure or not? If the former, does that mean all such children should be treated, or only those with parents whose economic circumstances permit [either because they can afford the higher level of insurance coverage, or can pay directly] ?
• No intelligent discussion of health care economics can ignore the political reality of the doctor's lobby. One may wish it away with the thought that a truly free market will flood the nation with doctors thereby driving down the cost of access. But that is certainly not the current reality, and may never be because of factors such as the practical limits of the "farm team" talent pool, the complexity and cost of the training regimen [partly driven by patient expectations and partly driven by the self-regulating nature of the profession in most jurisdictions which limits entry], and the malpractice insurance/tort system dynamics particularly in the USA, among other things. Should there be any regulations or standards regarding who can provide which forms of medical care? Should those be determined by the government? Or should it be the medical professionals themselves [say the AMA] that determine standards? Isn't having any regulation or standards an imposition on a truly free market, because by definition it restricts from whom I can seek treatment? To my knowledge there is no comparable cohort in the supply & consumption chain for SUVs that is able to exert influence and political power equivalent to the doctors cohort in most health care systems.

Once again I do not imply that any of this is "good" or "bad", simply that the economics of health care are not the same as the economics of car manufacturing, or agriculture, or secure energy supply, or transportation...all of which differ from each other in some important ways.

On another post there was a short exchange about airline pilots salaries. Let's just apply some basic economic reasoning to that as an example.

Regardless of whether one looks at pre-deregulation or post-deregulation in the USA, airline pilots have retained their relative position as the highest paid group of line-operating employees within every airline. This is in spite of the fact that labour is one of the dominant cost catagories [along with fuel] in every airline. there is no shortage of trained or trainable pilots, and there are no obvious restrictions on the ability to find and train more of them. The common belief is that their high level of skill and the responsibility they carry for the flights justifies their high pay. Certainly these are important. Who of us wouldn't want Capt. Chesley "Sully" Sullenberger in the left seat if we were on board an airplane in serious trouble. :cool:

But the fact is that pilots form a very small portion, by number, of the labour pool in an airline, and since they cannot be replaced easily or quickly [due to the FAA rules] the cost to the airline of having the pilots strike is much more significant than paying that small group on a scale that no other airline union or line-operating employee group can ever secure. It's all economics...

P.S. If you decide to look into the economics of transportation, you'll discover that many businesses, including the airlines and container ships, have characteristics very similar to green grocers...they are both selling a perishable product with a limited shelf life.

[Munger]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Mike,

There's no shortage of extremely competent people in the NHS. The problem lies in the administration (or lack thereof). Also, that was 1980! A family friend worked for the NHS in the 1960s. He said back then the NHS was probably the best healthcare system on earth. Today that would clearly not be the case.

Some years ago, I was discussing this with an American friend who's father is a radiologist in the US. My friend was living in Europe at the time. He gave me an example of a NHS radiologist who missed a 10 kilo tumour in a patient's gut. In the US, that would have been the end of his career.

Completely incorrect, actually. The boards in the US rarely censure docs. Typically after something like that they would get sued and move on to another area, just like you described. Only the insurance co would fight for years to not pay out a penny to the victim.

[bpr]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Food is grown by people who evaluate the market's demands, learn the skills required to grow food, invest in buying raw materials, do work, bring the resulting product to market to sell to interested customers who choose among various alternatives to find the option that best suits their needs. Providers must compete to attract customers, yielding a whole range of options - cheap basic quality all the way up to luxury quality. For those who can't afford food, government provides vouchers (food stamps) so they can go into the private marketplace and buy food. Government doesn't set up farms and supermarkets to produce food for those who can't afford it.

This is a textbook simplification of a system in a vacuum, not how food production atually works, as I'm sure you know. The way it really works is a few buyers (really only two, I think: ADM and Cargill) set the price and buy accordingly. A great deal of the overproduction is exported and sold at a loss to ensure dependence on US agribuisness, largely wiping out foreign local farmers in the process.
The Omnivore's Dilemma
Food Fight: A Citizen's Guide to the Famr Bill
Your Farm Subsidies Are Strangling Us

In any case, you do know healthcare, but methinks you do protest a bit much, mn_mark. Are you at UNH? They're based in Minnetonka, I believe, and your moniker got me to thinking... That would at least explain your perspective.

[cobben]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Mega, what you really want to worry about is when the French seal off the channel tunnel at their end.

All islands become traps for their inhabitants in bad times - Iceland most recently, but I recall reading about how Canary islanders would do anything to escape,this was back in the good old days before EU & tourists arrived.

So keep an eye on that tunnel . . .

[ax]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Mike, you can only use a stamp once!

http://news.moneycentral.msn.com/pro...216&id=9612137

[Mn_Mark]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

In any case, you do know healthcare, but methinks you do protest a bit much, mn_mark. Are you at UNH? They're based in Minnetonka, I believe, and your moniker got me to thinking... That would at least explain your perspective.

I don't know what UNH is. No, I have nothing to do with the health care industry. I'm just a libertarian type who believes that freedom works and is trying to understand why some people think health care is different than other goods and services and needs to be nationalized to some extent.

[Munger]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

I think I WOULD be surprised. Because if government can provide health care services better than the free market (and the U.S. has nothing like a free market in healthcare!), I see no reason not to adopt central government control/planning of all sectors of the economy.

There's nothing special about health care that somehow makes it properly the subject of government management in the way that defense is properly managed by government. The defense of a country can't be managed on a person-by-person basis. It can't be divided up. There's just defense for the whole country. So government must handle that.

And there's lots of things more important than health care. Food, for one. Without food you die in a few weeks. Why don't we have the government run all the farms and supermarkets and decide what gets grown and who gets how much? Same with other things more important than health care: clothing and shelter come to mind. Why not have government manage clothing design, production, and distribution? And housing - have government designing, building, and allocating housing.

There are other critical social functions that logically the government should be managing if they are supposedly the best way to allocate something like health care. Everyone needs love and most want a spouse. Without love and social ties people live a barren and shorter life. Why not have government manage who we marry and who our friends are? And we all need some luxuries - toys, vacations. Government should probably be decidiing who gets a vacation where and for how long, who gets the new television sets, etc.

If you think all that is ridiculous, then tell me how health care is any different. Health care is goods and services provided by people and companies who train and specialize in providing those things, just like in every other good and service that exist. There is no fundamental difference between a human being who trains to be a doctor and one who trains to be a car mechanic, yet somehow many people think doctors need to be managed by the government but mechanics don't. Health care is just a certain kind of set of goods and services sold by some people to some other people.

So yes I'd be very surprised to find any fair examination of a free-market-based health care system and a socialist system that showed the socialist system did a better job for society - holding constant the amount of social resources devoted to it, etc. Of course if you compare a system like Cuba's where they artifically devote a disproportionate amount of the society's resources to training a large number of doctors for propaganda purposes ("look how many doctors our society creates! we are so superior!) you can make a skewed argument that a socialist system works better - as long as you ignore all the other things the society has given up to produce all those doctors.

"But look how expensive health care is in the U.S.! No one can afford it. The government has to manage it." But health care became so incredibly expensive in this country AFTER the government got massively involved with regulating and subsidizing it - just like with college tuitions after student loans became available. Not long ago I found a bill my grandfather paid for an in-patient surgery in the late 1940s. He spent two days in the hospital and had no insurance. Total bill? $25. When my mother went to college in the 1950s the total tuition for a quarter was less than $100. How come health care and higher education were eminently affordable then, not requiring people to go deeply into debt, but now it's so expensive that people think the government should manage it?

And once government is managing health care the way it manages K-12 education (ugh), what will be next? I suspect it really will be housing or food or clothing. Those will be the next "entitlements" that the socialists will decide are too important to be left to the private sector.

The free market will often efficiently allocate goods and services. Often it will not. This is especially true in cases where information asymmetry and externalities exist.

Unlike what you imagine, the majority of health care decisions are not decided upon by a free market. They are dictated by a central decision maker. The decision maker in most cases is the insurance company.

You might argue that insurance is a free marketplace where the market will solve the problems. The lack of transparency within insurance companies, as well as the non-free market aspects (such as being tied into your employers insurance, insurance companies restricting the docs you can see, etc) means this market will not be efficient. Information asymmetry is epidemic in this market. The pathetic relative ranking of the US health care system evidences this.

The disparity in sophistication also has marked effects on the health care market. On one side of the bargain are the insurance companies, with their resources, army of lawyers, and experience. You may have noticed that they also write the contract. On the other side of the bargain are laymen who are maybe given a choice of insurer and handed a difficult to understand set of options from which to choose. And regardless of what they choose, if in the end the coverage will cost the insurance co. too much, they will find a loophole - or at least delay for a few years in paying out, complicating the medical condition and increasing the eventual cost.

This leads to the externalities. In this case, one externality is that, as a society, we do not like to see people, children especially, die of treatable conditions because they either lack insurance or are being denied by their insurer for any one of the myriad reasons for which insurance companies deny coverage. So the government ends up footing the bill. Just another example of privatized gains and socialized losses. So what's new.

Socialized medicine is perhaps not the best solution. Socialized insurance probably is a decent solution - wherein everyone is given at least a basic level of coverage, must pay in a premium, and any profits mostly go back into funding coverage. At a minimum there should be smart regulation. It seems a little hard to accomplish this given the lobbying efforts of the insurance companies.

[mcgurme]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Ha ha ha.
(Sarcasm alert)
Yes, those computers get smaller and faster and cheaper all by themselves. It has absolutely nothing to do with academic (college) research on semiconductors and quantum physics, paid for largely by the government (NSF, specifically). Or the US-college trained folks who go to work for Intel, AMD, etc. No, those things are completely unrelated. Let's get rid of the "inefficient" investment in our academic science in the US, and let the "free market" take over. Ha ha ha. Oh, wait, then we'd be like, well, one of the many other bastions of free-market capitalism, uninterfered with by the evil government, like .... ? Oh, wait, what was that perfect place you were referring to?

Anyway, let's follow your prescription to its end:
Bye by ipod. Bye by 64 bits. Bye by 32 bits. Bye bye terabyte hard drives. Bye bye gigabyte hard drives. Bye bye internet (read up on how the internet got started, as arpanet, a government project). In fact, bye by computer (read up on the history of how and why computers were developed, by the US government for defense purposes). Sure, free enterprise is great at taking the already existing technologies and further developing/commercializing them. I have no dispute there. But, free enterprise is lousy at developing fundamental technologies , because the payoff horizon is too long.

Master shake: nobody answered this because it is just pure baloney.

I don't think it's a coincidence that the industries with some of the greatest government involvement - health care and college and K-12 education - have some of highest costs and worst performance, while industries with the least government involvement - computer hardware and software production, or other electronics, for example, come to mind - show incredible increases in capability with continually DECREASING costs year after year. I can get a thousand times faster computer for a fifth of the cost of the one I bought in 1993. In a free market, things get better and cheaper. But we spend four times as much on government-run K-12 education in real terms as we did decades ago and have worse results.
I've yet to see anyone answer your question.

I've yet to see anyone answer your question.

[Guest]

Re: Holy Sh*T Hot "Iceland on Thames" story (Someone find FRED!)

Right on McGurme.

The notion that certain essential services to the public and certain components of long term national R&D strategic policy might even in any smallest way benefit from an actual governmental underwriting is regarded as anathema in some quarters. It "goes against the religion". You might as well be waving a vial of holy water and a silver crucifix in front of a "creature of the night". :p

Ha ha ha.
(Sarcasm alert)
Yes, those computers get smaller and faster and cheaper all by themselves. It has absolutely nothing to do with academic (college) research on semiconductors and quantum physics, paid for largely by the government (NSF, specifically). Or the US-college trained folks who go to work for Intel, AMD, etc. No, those things are completely unrelated. Let's get rid of the "inefficient" investment in our academic science in the US, and let the "free market" take over. Ha ha ha. Oh, wait, then we'd be like, well, one of the many other bastions of free-market capitalism, uninterfered with by the evil government, like .... ? Oh, wait, what was that perfect place you were referring to?

Anyway, let's follow your prescription to its end:
Bye by ipod. Bye by 64 bits. Bye by 32 bits. Bye bye terabyte hard drives. Bye bye gigabyte hard drives. Bye bye internet (read up on how the internet got started, as arpanet, a government project). In fact, bye by computer (read up on the history of how and why computers were developed, by the US government for defense purposes). Sure, free enterprise is great at taking the already existing technologies and further developing/commercializing them. I have no dispute there. But, free enterprise is lousy at developing fundamental technologies , because the payoff horizon is too long.

Master shake: nobody answered this because it is just pure baloney.

And I vote this comment from Thailandnotes as the pithiest comment on this whole thread.

Thailand is one of only a handful of lower-middle income countries to aim for universal healthcare. Without mandates from the government, a large % of the population would have little or no access.