Thursday, February 21, 2013

Here's an idea ...

Let's treat health insurance like any other form of consumed good, and let the market bring prices down the way it has brought down the prices of virtually 100% of the goods it has been allowed to act on.

That's so crazy, it might work!

The latest voice of reason making this "radical" suggestion is David Goldhill, the man who wrote the provocative article "How American Healthcare Killed My Father" in The Atlantic in 2009. In his recent NY Times article, Goldhill notes:
In the world of health care analysis, there are basically two schools of thought. The first is that health care is so fundamentally different from other goods and services that a normal market can’t drive down its prices. This school of thought makes a number of assumptions: health care consumers are desperate and have no leverage to avoid high pricing. An individual’s need for care depends on luck and genes, so that social fairness requires pooling risk.

An aging population needs ever more care. New technologies offer beneficial advances but only at great expense. For-profit motivations conflict with fundamental human needs, requiring extensive regulatory oversight. Managing the insurance system requires costly and complex administration (with direct annual administrative costs now running at roughly $1,900 per household).

AN alternative to the conventional wisdom is that consumer ignorance is what differentiates health care from other industries. This results in a lack of discipline that allows for pervasive excess care and exorbitant prices. If people understood how much they were paying for health care, they would insist on greater control of these resources, creating incentives for the kind of competition in price and quality we have seen develop in other industries — even those that were once assumed to be too complex for the average consumer to readily understand, such as personal computing.
Every time people who don't understand or don't trust the free market (a category that encompasses most Liberals) claim that some innovation or technology is too complex for the hoi polloi to understand (or, the market "doesn't work with X"), the great unwashed masses inevitably surprise their would-be masters with their ingenuity and grasp of the fundamental value of the innovation or technology at issue. The market, which is really nothing more than the aggregation of each individual's preference for a given item (as expressed in the price s/he is willing to pay for it), inevitably works magnificently to bring the price of said item down to a reasonable and affordable level.

It does this, that is, when it is allowed to. When regulations or laws forbid the market from working, that's when you get all kinds of perverse incentives and dysfunction. Capitalism is based on the fundamental truth that humans are greedy and self-interested, and the free market works when everybody's individual greed and self-interest leads them to openly and transparently offer goods for exchange in a way that all parties feel is beneficial enough to justify paying for/parting with their goods or resources. But when you have artificial barriers -- price controls, laws forbidding selling across state lines, mandates on the bundle of goods a company must sell, etc. -- that's when the greed on which capitalism is based can overwhelm the system.

In healthcare, this is exactly what has happened. Insurance companies game the system by overcharging. Governments get wealthy off of insurance companies, pharmaceutical companies, and specialist associations (like the AMA) lobbying them to pass all kinds of legislation and regulation favoring them. That just doesn't happen in a free market, but the average health care consumer is insulated from this reality because they don't pay directly for their healthcare.  That fact is the straw that stirs the drink of American health care dysfunction. No other part of this broken system would be sustainable or possible if people paid for most of their care directly.

Again, here's Goldhill with a great analogy explaining why:
Try to imagine what homeowners’ insurance would look like if we expected everyone’s house to burn down and then added coverage for each homeowner’s utility bills and furniture wear-and-tear. This would be insanely expensive without meaningfully reducing anyone’s risk. That, in short, is how health insurance works.
The article really is worth a read.  Check it out.

"How stupid do you think we are?"

The incredulous tone of the French tire worker unions and the French government to the reality of a businessman walking away from their country is truly remarkable to behold.

This Wall Street Journal editorial lays out more of the background from the letter from Morrie Taylor, CEO of Titan International, to the French "Minister of Industrial Renewal". (That France, a major world economy, feels the need to appoint a cabinet-level position for renewing industry -- instead of, say, lowering taxes and fees to make doing business there more profitable and attractive -- says much about the state of the country.)

The French union imperiously refused to increase productivity at the Goodyear factory in North Amiens, and instead issued the ridiculous ultimatum that unless Taylor agreed to their demands, they wouldn't let him purchase the factory. The unstated assumption obviously in the back of the union members' minds is that Taylor wouldn't -- nay, couldn't -- refuse to buy the factory, so the leverage was all on their end. They thought this even though Titan was the only company bidding on the Goodyear factory.

When Taylor, quite reasonably, walked away, the union and the French government were flabbergasted. Messr. Ministry of Industrial Renewal begged him to reconsider. Taylor's priceless response really sums up the contempt every good businessman has for Liberal anti-business policies promulgated by economically ignorant policymakers.

"How stupid do you think we are?"

That question is the unstated subtext of every wealthy French citizen or business that is moving to Belgium, or the UK, or the US, or anywhere else. It's the unstated subtext of every business or wealthy individual that's moved away from Michigan, or Illinois, or California, or New York.

"You must think we know as little about business and economics as you do. We don't. Buh-bye."

Wednesday, February 20, 2013

Tuesday, February 19, 2013

Amateurs in WA-WA Land

Woah, woah, woah, Washington State. Too much honesty, too fast.

You can't show people your real intentions THAT quickly. You need to sound reasonable first so they don't notice how much you want to violate their rights until they're already totally violated.

See? Now you have to bleat all kinds of nonsense about how that provision requiring gun owners to let cops inspect their homes annually was really a mistake, that you didn't intend to put it in the bill. That of course you would never condone a naked abuse of power like that.

You need to engage in more foreplay to deaden the awareness of your citizens -- laws that nibble away at the margins of their liberty repeatedly to numb them to how much they're becoming serfs instead of citizens. They won't bend over and take the violation you want to give them without that. Now you might never get to give it to them.

Amateurs.

Friday, February 15, 2013

Treating promiscuity like we treat obesity ...

People who sleep around cost the US taxpayers $16 billion a year in medical bills. That's pretty outrageous. Sounds like a health crisis to me.

I wonder what would happen if the Nanny Staters like Mike Bloomberg applied their reasoning for combating obesity (by limiting people's freedom to eat whatever they please) to our promiscuity epidemic. It would be like the Massachusetts Bay Colony all over again, except with better technology and (if possible) more smugly satisfied self-righteousness.

Of course, that would never happen. After the sexual revolution, the modern West tends to treat sex like a religion -- and to defend it the way we used to defend religious liberty. (The limited way the Obama administration defends religious liberty today? That was more how we treated sexual liberty before the 60s.)

It's interesting to envision what that would look like, though, just to point out the absurdity of both the Food Nazi Nanny Staters and the sexual libertines. An even better exercise for doing this, though, is to imagine what society would look like if we treated our habits and actions related to food the way we treated our sexual habits and activities.
  • For starters, it would be taboo to tell people what to eat or how much to eat. Doing so wouldn't just be considered bad manners; it would be evidence of hatefulness and intolerance.
  • Eating Big Macs, Whoppers, and other kinds of delicious fast food would be seen as an inalienable right, and any attempt to raise the prices would be decried as "denying access" to those who couldn't afford them. This would lead to calls for Congress to subsidize the cost of such food.
  • In the face of people's bodies blowing up due to obesity, there would be zero calls for people to eat healthier. In fact, studies would be produced proving that eating healthier and avoiding fattening or calorie-rich foods was an ineffective way to manage one's weight. 
  • Popular opinion would make it clear that expecting people to eat healthy was just unrealistic. The evidence would be clear that people would eat what they wanted to eat. Outdated or authoritarian rules regarding eating habits couldn't do anything to change that fact. People who went out of their way to eat healthy would generally be looked at as old-fashioned and weird.
  • Diets would be completely ignored for losing weight, as they would limit people's freedom and autonomy. Instead, the emphasis would be completely on drugs that would allow people to eat whatever they wanted while gaining as little weight as possible.
  • People with extreme food fetishes and perverse eating habits -- such as only taking in nutrition through enemas -- would not be shunned; they would be celebrated. Disapproving of such fetishes or habits would be proof of one's own intolerance and moral shortcomings.
  • The emphasis of all public health programs would threefold: maximizing people's access to restaurants and supermarkets, maximizing people's access to drugs that ensure they'll gain as little weight as possible, and lobbying for government subsidies to make the first two goals as low-cost as possible.
  • The resulting obesity epidemic would be taken as proof that the government had failed both to make access to food widespread enough and to provide enough "gain no weight" drugs.