From: Colin
Sent: Saturday, September 05, 2009 6:45 PM
To: John
Subject: Healthcare

John, you might find this perspective interesting.
http://www.nytimes.com/2009/09/03/opinion/03kristof.html?_r=2

Colin

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From: John
Sent: Saturday, September 05, 2009 10:55 PM
To: Colin
Re: Healthcare


Colin, The article is interesting, but very flawed.

The main flaw is that he is comparing what we have today against a single-payer system, as if what we have today is the *only* alternative. There are literally hundreds of health care insurance companies in the nation, yet only 7 are licensed to sell in California. This is the same across the country. Why? The insurance companies have their cozy deal with the politicians – you protect us in our market, and we will donate to your re-election campaigns. There is NO free market competition in health care insurance, much less health care providers. What we have today is a very dirty business, not the free market.
Compare insurance (all kinds) with the computer industry which is largely not regulated, extremely competitive, and extremely innovative. Where big profits exist it is only where true innovations have been relatively new, and they are generally not long-lasting. Companies come and go.

Computer execs have not yet learned to be like insurance execs and pay off the government for a cartel protection racket. The answer is to make the insurance industry more like the computer industry. But politicians will lose their re-election resources, so they won’t hear of it.

I just read in this week’s Economist about Andy Grove’s point of view comparing the computer industry with autos, health care, insurance, etc. He asks where we would be today if in the 1970s, the giant mainframe computer companies demanded a bailout because they were too large to fail? His point, of course, is that the process of “creative destruction” (businesses failing and new ones rising from the ashes) is essential and should be encouraged by the government, not discouraged.

Back to government handling of health care… Consider the one group in the U.S. whose health care is a 100% government system – American Indians. Their health is atrocious.
All the polls this author cites are comparisons of government services to the existing cartel in health insurance, which is a political creation (and monstrosity).

Try a comparison of customers of the U.S. Postal Service against customers of FedEx, UPS, DHL, and all the other private delivery providers, and you will see a very different customer satisfaction pattern from a very competitive marketplace.

Back to firefighting and police, there are *plenty* of competitive models offered and in practice. Just as private adjudication (offered competitively) is a larger percentage of dispute resolution than the government court system, private security options (rent-a-cops, security guards, private patrols) do a larger job of crime prevention than the public government-run monopoly systems. No reason to claim that government-run firefighting is an open and shut case, either. I would suspect that the truth of the formation of those monopolies lies in empire-building by politicians, justifying their existence, more than the efficiencies of firefighting, but I have no ready evidence of that. Again, there are large bodies of studies on this, and I am sure I could find them. This guy from the NY Times talks like the answers are obvious, but they are not at all. Very disputed.

- John