Health Care and Free Markets, Take II
I write, then think
I did some reading thanks to some tips from friends and colleagues. In hindsight, my previous post on Health Care and Free Markets is just one more contribution to the noise.
What are blogs for, if not to bloviate? :) Moving on.
Not about Socialized Health Care
I now believe that my assumption that this is going to be a Free Market vs. Socialism debate was false, and regrettable. Nate Silver’s post Not all Socialist Countries are Alike clarified for me the difference between Single Payer and Socialist Health Care. They are not even close to the same thing.
It’s very unlikely that universal socialized medicine would even be proposed let alone enacted in the US. Congress is too scared by Angry Old White People Who Scream* to even suggest it. And structurally, it would be a major upheaval to implement government-run hospitals on the scale necessary to take care of every one. Various Veterans Administration scandals over the past few years don’t help promote the idea either.
Linking Insurance to Employment
The problem of bundling of health insurance with employment was created by a loophole in (federal ?) wage caps during WWII. Conservative and liberal friends of mine both agree about this origin. It started out as a job perk so companies saddled with wage caps could compete for talent, but persisted after the wage caps were lifted. I don’t know why that is, but I’m sure it’s complicated, juicy material for policy geeks. I’ll try to read up on that.
Lighting Candles Instead of Cursing the Darkness
Aaron asked about the existence of a “Credit Union” model for health insurance. Ivan points out some interesting free-market/collective solutions in the form of Captives – a form of insurance gaining popularity with small business and wealthy individuals that works a lot like a credit union. This sounds promising. You pool your financial resources with other individuals into a fund for paying out claims. The money is invested while it’s not being payed out, so you could actually make dividends if claims don’t put a huge dent in it.
My initial impression is to like the idea, but the fact that many Captives are created in the Bahamas and Belize makes me worry that it’s not entirely legit. Shades of Enron. More reading to do on Captives for sure.
Meta
About the spirited healthcare debate itself: Curiously for all the noise, there is currently no bill in congress to debate. The administration has basically recognized that health care is a huge problem and would like to do something about it, but no concrete proposal exist yet. Only speeches.
*All the Death Panelers are either protesting out of complete and utter ignorance of the issue, or (my gut feeling) using the issue as a cover for something much sadder/more sinister: they object to having a black president. Angry old white people want “their” America back, and conservative leadership has latched onto health care as the conduit for their rage. It’s an unfortunate situation if that’s the case, but I can’t think of a simpler explanation for their actions.
On “socialized X” - There is indeed a big difference between socialized health care, socialized funding of health care, socialized insurance, socialized funding of insurance, etc… One of the things about statism in general (contra free markets) is that there are a million different “plans” that can be implemented. Of course what emerges from the democratic political process involves massive compromise, so is rarely coherent according to any “plan”. (this is a small part of Hayek’s argument in _The Road to Serfdom_ for why government intervention tends to push us towards the slippery slope into totalitarianism).
On WW2 - the feds wanted to fund the war by printing money instead of raising taxes, but workers and companies started catching on and raising wages and prices as fast as the money was printed. So the feds said “stop that!” and froze (monetary) wages and prices. In order to pull in more (or better) workers, firms had to find some form of non-monetary compensation.
(and dude, I hope you aren’t calling me a conservative, that just makes baby jesus cry - google Hayek’s “Why I am not a conservative” for more, or alternatively:
http://en.wikipedia.org/wiki/Friedrich_Hayek#Hayek_and_conservatism
)
On Lighting Candles: I think the “Whole Foods” plan would go a very long way towards this.
On Meta: The way I see it, the political process works a certain way, and generally anything that goes into the process with the aim towards increased government control of anything will end up being really socially harmful coming out.
One aspect of this - what is likely to happen is that some bill will be passed that is full of vague mandates and broad objectives that all sound really nice. The details of implementation will fall to some bureaucracy. Members of congressional oversight committees will then hash out the details (in a way favorable to the special interest groups in their districts (+general favor trading), and harmful to society overall) behind closed doors with the bureaucrats.
Ninja Bill
15 Aug 09 at 2:10 pm
Also,
I don’t see Obama as being an ideologue - I see him as obsessed with his image - but he has staked his political capital on “doing something about health care”. So his goal is to have “something” done that at least looks good in the short-term (knowing that the media and future historians are going to gush over him anyway).
This is why the backroom meetings with the drug industry and insurance industry special interest groups lead me to a general inclination to oppose whatever he is working on. He has basically traded the granting (or protection) of some privileges in exchange for their support (and I’ve started seeing pro-Obamacare commercials paid for by these groups).
The privileges won’t be obvious to most, of course, since most of the populace doesn’t understand economics - how for example almost all ‘consumer protection’ legislation actually exploits consumers for the benefit of big business.
Ninja Bill
15 Aug 09 at 2:16 pm