Should the US have Universal Healthcare

[Epee_Pox]

Is "nonrival" a typo for "nontrivial" (if not, I'm not sure what you mean).

"Nonrival" is a term of art in Economics, referring to something that, once you've provided it to some people, costs nothing to provide to others.

So a class-action suit is nonrival in that a few class members get together to bring a lawsuit, but the ultimate award (if any) goes to all identifiable class members at no additional cost to those additional class members.

[Epee_Pox]

As an intellectual exercise, let's suppose that Inq is wrong, and that national healthcare is as much a public good as national defense (using the Economics definition of a "public good" as something that is nonrival and nonexclusive).

Given that premise, the decision to be made is how much to spend on it.

There are several here who seem to be making the claim that the government (i.e., all taxpayers) should bear the cost of meeting all demand for health care.

Others, I get the feeling, would require that there be some limit on how much demand is actually met by the taxpayers, and that therefore tax dollars be spent on a bureaucracy to evaluate whether a given demand should be met, either categorically or on a case-by-case basis.

What's the proper public expenditure? Do we cover everyone for everything, or do we set limits? And if we set limits, how do we set them and how do we enforce them?

[keith]

What's the proper public expenditure? Do we cover everyone for everything, or do we set limits? And if we set limits, how do we set them and how do we enforce them?

well I suppose if we are limiting it by public good then that would be vaccination, screening for treatable conditions (breast/prostate/cervival cancer spring to mind), and possibly accident and emergency.

[jeff]

Sorry, I've been too busy with work to do lengthy replies on any thread... In any case, my previous post was not meant to be partisan. Briefly, while I listen with one ear to a conference call:

Funny you should mention those particular disciplines. They are the only areas where actual cost has gone down as level of service has gone up. Currently those practices are considered elective and not covered by insurance or Medic-Aid. Totally elective and subject to market forces... How could they cost LESS???

a) Technology for those two practices have dramatically improved in the past few years since they've moved from 'early adopter' to 'pretty darn mature' status. Competition is a Good Thing(tm). Perhaps you were under the impression I was a Communist? However, other services that are more mature (have reached the stable points of their technology adoption have not had this effect. Cosmetic rhinoplasty is a decades-old cash business whose price has not dropped despite competition.

b) Healthcare pricing in the US is not an open market. I don't know if they should be categorized as cartel or oligopoly or whatever, but HMOs dictate prices to providers, and their staffs are rewarded based on "productivity" based on denying service rather than providing it, which turns the normal capitalist business model on its head. Plus, the tort system distorts and increases costs. It's complicated and messy and expensive here.

c) Perhaps I didn't make this clear, but I wouldn't mind a 2-tier system. It appeals to my sense of moral decency that everyone in society get fundamental healthcare, while people wanting "premium services" (the cosmetic surgery, the optional vision improvement surgery) pays for it out of their own pocket.

So that you could then bash the emotional argument on economic grounds???

No, not at all. I don't think it's foolish for people to fear unfeeling, nameless, bureaucrats making health care decisions for them - I think that's a very legitemate fear - and we already have that situation. My point is that a national health system need not involve the government being involved at all, or at least, no more than HMOs already do today.

[Philistine]

"Nonrival" is a term of art in Economics, referring to something that, once you've provided it to some people, costs nothing to provide to others.

Ah. Thanks. Learn something new every day.

So a class-action suit is nonrival in that a few class members get together to bring a lawsuit, but the ultimate award (if any) goes to all identifiable class members at no additional cost to those additional class members.

More or less--though there is a nontrivial () cost of publication and, in many cases, adjudication (you have to have owned or bought something during a certain period, etc.) which reduces the payout to other class members--but it's usually not that large at least in relation to the total award.

--Philistine

[Have At You]

If we call it a public good, then the demand curve is pretty much a constant quantity, regardless of price -- regardless of whether it costs the taxpayers $1 per patient or $10000000 per patient, that won't affect the number of patients. It's a vertical line.

So an ordinary supply-demand is not going to find us an equilibrium price, because every price is an equilibrium price that way.

The better practice is to measure marginal social benefit against marginal social cost (rather than demand against supply), to find an equilibrium point where those two curves intersect. At some point, spending that extra dollar on healthcare (or defense or whatever) isn't going to get you any more social benefit.

(Interesting. I'd like to see actual quantified data on social benefits of public spending on health care. I'm sure they're out there, but Google's not cooperating.)

The major difficulty lies in ensuring that dollars spent are actually spent properly. Don't want to waste tax dollars on some old f@rts using ambulances like their own personal taxi service, or on other abuses of the health care system. This requires some level of paperwork and bureaucracy.

That necessary bureaucracy, to ensure proper expenditure by some method of triage, is least efficiently handled by government. It is most efficiently handled by private competing enterprises, who have an incentive to minimize their costs of oversight as well as minimizing their expenditures.

So private, competing health insurers appear to be the most efficient means.

So how do we get national health insurance for everyone, but maintain a healthy competition among providers?

Why not give everyone a tax voucher, to spend towards health care, payable to any qualified health insurance company. That would keep the market competition honest, to keep costs as low as possible, while minimizing the externalities of uninsured people.

Of course, then you'd have to give everyone an incentive to spend their vouchers as if they were their own money, otherwise, price wouldn't matter. How about letting them apply what's left over to their income taxes as an exclusion or deduction. And apply any credit directly to their bank account. (But they'd have to purchase insurance first).

Yeah, that'd work.

[grotto]

interesting that those most against national healthcare seem to have very good private insurance.... many many working americans have to choose between being able to afford the $300+ a month for mediocre insurance, and groceries, that is if their companies can even afford to offer insurance in the first place. I know of countless stories of people who have been seriously financially stressed from just one hospital visit. lets take a young couple going to college, working etc. their jobs do not offer health care. they get pregnant. BAM 17k for the miracle of life. OK economists and free marketeers
Lets here your solution so that every american can go to the hospital and not become instantly destitute. and don't give me pro-bono work that hospitals do etc. Put out an actual plan that every citizen could "afford" and keep it private.

[Philistine]

{snip}
Others, I get the feeling, would require that there be some limit on how much demand is actually met by the taxpayers, and that therefore tax dollars be spent on a bureaucracy to evaluate whether a given demand should be met, either categorically or on a case-by-case basis.

Don't we already do this to a large extent? Medicare, Medicaid, various state programs, Emergency Medical Treatment and Active Labor Act, for instance.

What's the proper public expenditure? Do we cover everyone for everything, or do we set limits? And if we set limits, how do we set them and how do we enforce them?

That is the trillion-dollar question.

--Philistine

[Have At You]

Lets here your solution so that every american can go to the hospital and not become instantly destitute. and don't give me pro-bono work that hospitals do etc. Put out an actual plan that every citizen could "afford" and keep it private.

I just did.

[jeff]

Again in brief while my call drones on...

It's worth recalling that the USA is the exception among first world countries, and even if our economists feel that public health is not a "public good" via technical definition, it seems that this opinion is not shared in UK, Canada, Australia, New Zealand, France, Germany, Italy, Japan. Switzerland, Denmark, Sweden, Belgium, etc, etc. So, it's not just "the experts say so" - there is difference of opinion there.

While I know that this board represents the acme of political and economic thought on the Internet, it might be interesting for people to read the following essays:

http://www.newyorker.com/fact/conten.../050829fa_fact (from the New Yorker)
http://www-cpr.maxwell.syr.edu/pbriefs/pb6.pdf (CEO of Kaiser Permanente) "public good or private enterprise"
http://www.cdc.gov/ncidod/eid/vol7no2/scott.htm (Center for Disease Control) "applying economic principles to health care"

Oh, I just remembered: somebody (Inq?) said that a possible limit on the number of doctors was the doctor organizations closing the gates in order to restrict supply and keep prices high. The contrary is happening: students are turning away from the medical profession because it has become far less lucrative, more litigation-infected, and more unpleasant. Surgical residencies are going begging for good candidates to fill their programs. There are articles about how we face risks in future healthcare because there are specialties that are going to be understaffed because the pipeline of new doctors is dry

[prototoast]

Again in brief while my call drones on...

It's worth recalling that the USA is the exception among first world countries, and even if our economists feel that public health is not a "public good" via technical definition, it seems that this opinion is not shared in UK, Canada, Australia, New Zealand, France, Germany, Italy, Japan. Switzerland, Denmark, Sweden, Belgium, etc, etc. So, it's not just "the experts say so" - there is difference of opinion there.

Yeah, we're the only first world country that doesn't offer it, and we're also the wealthiest and most powerful country. I'd say a lot of where we are today is because of our less-socialist government.

Oh, I just remembered: somebody (Inq?) said that a possible limit on the number of doctors was the doctor organizations closing the gates in order to restrict supply and keep prices high. The contrary is happening: students are turning away from the medical profession because it has become far less lucrative, more litigation-infected, and more unpleasant. Surgical residencies are going begging for good candidates to fill their programs. There are articles about how we face risks in future healthcare because there are specialties that are going to be understaffed because the pipeline of new doctors is dry

Knowing a lot of students who are applying to medical school (and all of them worrying about getting in), I can tell you that there is not a shortage future doctors out there.

[Inquartata]

I just think the discussion was getting hung up over something being a public good, in the economic sense, vs. being in the public good, in a more policy sense.

Possibly, possibly. But IMO the latter gets into normative quicksand very quickly. I mean, who gets to decide what is or is not "in the public good" ( or to put it another way, "it's for your own good" )? To some, prayer in the schools would qualify. To others, communizing all private property would. Is the right to carry a concealed weapon "in the public good"? Opinions vary sharply depending on who you ask.

I think the best we can do is to make such decisions based on some sort of rational, testable scientific basis, such as economic ones. Thus the public good in the economic sense, as opposed to the wide-open free-for-all subjective one of "what's good for people".

Not so much at the trial level, in the vast majority of cases.

Unless the decision is not appealed....

--giving medical care for a communicable disease is providing the rest of the population a service for which they need not pay.

For this we have the CDC and other emergency health-care agencies. The vast bulk of goods and services produced and distributed under the rubric of "the health care system" do not yield such spillover benefits. They are very much "I am sick, make me better" things. We don't argue that the oil industry should be nationalized because there are spillover benefits to society from having the military well supplied with fuel at public expense...

Is "nonrival" a typo for "nontrivial"

See Epee Pox's explanation of the term.

[Inquartata]

interesting that those most against national healthcare seem to have very good private insurance....

I do now...but up until two and a half years ago I had none at all. Had none since I left the military, in fact. But my opinion regarding national health care has not changed. It was just as adverse when I had no insurance as it is not.

N.B. I could have afforded a private policy, something along the lines of Blue Cross/Blue Shield. In fact I considered it. The market-clearing price was too high for me, though. So I went without. Someone else might have bought the policy. This is just how the rational individual is supposed to behave in a market system: making decisions on the amount and mix of goods and services he consumes based on his preferences and on market prices...

many many working americans have to choose between being able to afford the $300+ a month for mediocre insurance, and groceries, that is if their companies can even afford to offer insurance in the first place.

The market does not and cannot guarantee that any good or service is "affordable" to all. This is the system we have, the best thus far developed by humanity. The usually recommended alternative has been tried a few times, without notable success.

lets take a young couple going to college, working etc. their jobs do not offer health care. they get pregnant. BAM 17k for the miracle of life.

1) Condoms are cheap

2) I'll bet a lot of people would be surprised by that figure of yours. Children were being born for a long time before obstetrics was even a specialty...

Put out an actual plan that every citizen could "afford" and keep it private.

It's called "forethought". Don't get pregnant, Miss. Until you can afford whatever level of care you choose...

Let me offer a counterexample.

Lets take a young couple going to college, working etc. They do not make enough to afford auto insurance. Someone steals their only car. Should the government give them a car at taxpayer expense? Or do they live in the real world, where s**t happens and we deal with it as best we can?

[Inquartata]

It's worth recalling that the USA is the exception among first world countries, and even if our economists feel that public health is not a "public good" via technical definition, it seems that this opinion is not shared in UK, Canada, Australia, New Zealand, France, Germany, Italy, Japan. Switzerland, Denmark, Sweden, Belgium, etc, etc. So, it's not just "the experts say so" - there is difference of opinion there.

Their politicians may define health care as a public good. I very much doubt that their economists, qua economists, do.

In the end, a society makes choices on many grounds. Economics is only one of them, and alas, often a minor one...

a possible limit on the number of doctors was the doctor organizations closing the gates in order to restrict supply and keep prices high.

This is what unions and professional "gatekeeper" organizations do: they act as labor monopolies. Monopolies always produce less and charge more for it than would a comparable competitive market. The AMA acts in this way by controlling entry to medical schools. The states exacerbate the effect with their licensing procedures.

I am not arguing that medicine ought to be unregulated or uncontrolled, but the economic impact of such practices are clear...

The contrary is happening: students are turning away from the medical profession because it has become far less lucrative, more litigation-infected, and more unpleasant.

That's not a contrary effect; it's an exacerbative one. It is indeed a problem, but it does not show that the quantity-restricting tendencies of labor cartels do not exist.

[jeff]

Yeah, we're the only first world country that doesn't offer it, and we're also the wealthiest and most powerful country. I'd say a lot of where we are today is because of our less-socialist government.

Wealthier than Switzerland or Japan? Maybe not. If wealthier, because of our healhcare system? Unlikely. Much more likely wealthier due to the tremendous industrial and technology leadership advantage we enjoyed for 60 years and are now frittering away,

Knowing a lot of students who are applying to medical school (and all of them worrying about getting in), I can tell you that there is not a shortage future doctors out there.

And somehow you know that your circle of friends is proof that applications are as high as 20 or 30 years ago? Never mind applying to med school anyway - that's still at the open end of the funnel. How many are coming out the other side of med school and are going into vascular surgery fellowships? And if you want to see staff shortages right now, try to find an OB/GYN. Go to almost any hospital in this country and see how critical the situation is for skilled nursing care. They're begging retired nurses to come out and work again.

I was responding to the suggestion that medical associations are restricting the number of doctors entering the profession in order to keep their rates and power high. Not only is that not supported by evidence, but it's not even supported by your "evidence".

[prototoast]

Wealthier than Switzerland or Japan? Maybe not. If wealthier, because of our healhcare system? Unlikely. Much more likely wealthier due to the tremendous industrial and technology leadership advantage we enjoyed for 60 years and are now frittering away

Definitely wealthier than Switzerland and Japan.
http://www.cia.gov/cia/publications/.../2004rank.html

Our tremendous industrial and technology advantage was be directly attributed to our free-er markets. It's not just healthcare, but that's one of the things.

[Slim]

How many are coming out the other side of med school and are going into vascular surgery fellowships? And if you want to see staff shortages right now, try to find an OB/GYN.

Malpractice lawsuits (for OB/GYN, many thanks to lawyers like John Edwards) and the resulting insurance premiums are what turns people away from most "high-risk" specialties.

[jeff]

Their politicians may define health care as a public good. I very much doubt that their economists, qua economists, do.

You're merely speculating without evidence.

I've been reading fairly conservative UK periodicals (you've seen me cite The Economist and The Spectator many times) for the last 20 years and cannot recall any instance in which they argued against public healthcare or the NHS as economists. Thatcher's changes to healthcare are controversial and equivocal at best (my understanding, perhaps wrong, is that her partial privatisation drove costs up substantially - I've spent the last 15 minutes surveying to refresh my memory without seeing anything to the contrary). The Conservative party, and the other right-of-centre parties would surely seize upon this and they don't. They have economists on their payrolls, and they don't argue against public heathcare.

In the end, a society makes choices on many grounds. Economics is only one of them, and alas, often a minor one...

Frankly, it should be a secondary consideration. Societies choose based on values and secondarily on economics - as evidenced by the expensive but necessary wars on Fascism and Communism.

It's even worse when people reject decisions based on a poor understanding of economics (coupled with their ideology), and without paying any attention to the actual data. For example, OECD statistics show total US expenditure on healthcare in 2000 at 13% of GDP, while Australia was 8.3%, Canada 9.1%, France 9.5%, Germany 10.6%, United Kingdon 7.3%. The chart I'm looking at covers 1991-2000 and it's always the same: we spend more while they live longer. That's not an indication of a best-of-breed policy. FWIW, we spend about as much on public health care as those other countries!

This is what unions and professional "gatekeeper" organizations do: they act as labor monopolies. Monopolies always produce less and charge more for it than would a comparable competitive market. The AMA acts in this way by controlling entry to medical schools. The states exacerbate the effect with their licensing procedures.

I am not arguing that medicine ought to be unregulated or uncontrolled, but the economic impact of such practices are clear...

Again you speculate without evidence that the AMA is restricting the number of doctors by controlling entry to medical schools. You claim a quota with "clear" economic impact when there is no such thing. As I said previously, there are substantial problems with the pipeline for future doctors, especially in critical care specialties.

That's not a contrary effect; it's an exacerbative one. It is indeed a problem, but it does not show that the quantity-restricting tendencies of labor cartels do not exist.

You've occasionally taken me to task for demanding that somebody "prove a negative"; I think our positions are reversed in this instance and that the burden now falls upon you to prove that there is such a labor cartel reducing the number of physicians and nurses. Journals I've read show the contrary, and include stories of families with multiple generations of doctors turning away from medicine.

[jeff]

Definitely wealthier than Switzerland and Japan.
http://www.cia.gov/cia/publications/.../2004rank.html

Our tremendous industrial and technology advantage was be directly attributed to our free-er markets. It's not just healthcare, but that's one of the things.

Interesting cite, thanks.

I see we're bracketed by countries with higher incomes and almost-the-same (eg: we beat Norway by $100/year). They have public healthcare, yet manage to be quite competitve anyway, eh?

Interesting as this is, it doesn't factor in the more-skewed distribution of incomes on the USA compared to the other nations (a small number of households with very high incomes raises the mean, while the median household income is essentially unchanged). nor does it factor in the costs USA individuals have to pay out of pocket that those in the other countries don't. In that case you would have to say "income after healthcosts were subtracted" to accomodate the costs that don't show up against individual's expenditures

[Philistine]

{snip}
And somehow you know that your circle of friends is proof that applications are as high as 20 or 30 years ago? Never mind applying to med school anyway - that's still at the open end of the funnel. {snip}

Actually--applications are higher than 20 years ago (27,000 in 1988--vs. 33,000 in 2002 (which is the most recent I could find on a quick search)). But have been steadily falling since 1996, when they were 47,000.

Of course, the # of acceptances and places in medical school has remained more or less constant--at 17,000.

Link1
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I now return you to your regularly scheduled thread....

--Philistine