POLLIWOG (Tadpole): the early stage of an animal that will eventually become a frog, hoping to be kissed by a princess, turning into a prince! POLIBLOG (Political Blog): the early stage of a center-right political blog that may eventually become a full blown blog of the center-right. Join in if you find any merit in the comments. If you are on the left and disagree, feel free to straighten me out! Who knows, with effort from all of us this blog may turn into a prince!

Location: San Diego, California, United States

Wednesday, July 18, 2007

"Where Michael Moore is Wrong"

John Stossel interviewed Michael Moore and reacts to "Sicko". The following three paragraphs caught my eye:

"Moore told me, "Government can do things right. ...My Dad gets his Social Security check every month. Comes not only every month, it comes on the same day through the so-called 'dilapidated' U.S. mail. ...[A]sk your grandparents what they think of Medicare. Although it has its flaws, although it may be underfunded, it's a much better program than the HMO that somebody has."

Underfunded? Medicare has a 75-year $34 trillion unfunded liability! Its costs are growing faster than inflation. Social Security has a 75-year $5 trillion unfunded liability. These are Ponzi schemes that will be bankrupt before Moore reaches retirement age. The U.S. mail manages to deliver his dad's checks, but compare its performance to FedEx or UPS. The Post Office said it wasn't possible to deliver packages overnight.

I want FedEx health care: innovation, new cancer treatments, hip replacements and pain reief. We get that from private-sector competition, not government lethargy." (my emphasis)

FedEx Health Care - sounds like good policy to me! Read the whole thing here.



Blogger Curt said...

I think we need to keep an eye on the costs and benefits.

Fedex - an innovator, pioneered the model of overnight delivery. However, it costs about 20 times as much as a first class letter, which admittedly takes a few days to deliver. So when you need speed, you go with Fedex and pay the price.

I think we need both kinds of services - innovations that (most likely) not everyone can initially afford, and standardized services that do the job in most cases.

9:12 PM  
Blogger Jim said...

We agree! Today we have both kinds of services. Innovative Doctors and pharmaceutical companies along with Medicare, Medicaid, etc., to supply standardized services to those who cannot take individual responsibility.

Problem is Michael Moore, Hillary, et al, want to take this system away from us!

I knew you were a righty all along!

2:15 PM  
Blogger Curt said...

We may have both today, but we also have some 40 million uninsured folks in America, so there is without doubt much room for improvement! And I've had personal experience that indicates that the private insurance companies are looking for literally ANY reason to deny coverage.

I think the health area is a very difficult field to deal with, and I think it's a mistake to think that free market principles could solve it, for a few reasons: essentially there's nearly unlimited willingness to pay when it comes to a life-or-death situation, and probably for this reason the new technology tends to drive costs up, not down, and there's a tough fairness issue involved with who gets access to the best treatment.

PS. You can label me as you like, but I expect we'll still find things to disagree on! :)

10:26 AM  
Blogger Jim said...

Much of your quoted number of uninsured are either the "float" of uninsured people - I don't know what this percentage is, but you will never have all insured - or people who do not want insurance because they have better things to do with their money and are young.

Insurance companies are in existence to maximize profits (this may be dastardly to you, but I like it) and therefore they may appear to be looking for any reason to deny coverage, but I doubt it is as prevalent as you indicate. Why would they want to deny coverage? This is what raises their "sales" and increases their profits. Isn't monitoring these "denials" part of what government regulation is supposed to do? And if they can't do that, do you really believe they can run the entire health care system?

The reason new technology drives costs up is because government is involved, which does not allow the market to work. If the market worked, do you not believe that technology would lower the costs with true competition on the supply side? It does in literally all other fields!

And finally, life is not supposed to be "fair" - and the sooner our society realizes this, the better off we will all be!

So - you're not a righty after all! We'll continue to disagree and work towards an understanding of this complex world!

10:56 AM  
Blogger Curt said...

No, I don't find the idea that insurance companies are in existence to maximize profits to be dastardly, I understand their motivations.

I tend to think that health care is a different kind of marketplace than say, selling widgets. Of course it shares some characteristics of other markets. But I don't think that looking at profits of health insurance companies is a good way of measuring whether we have a good health care system (unlike, say, profits of car companies indicating that we have a healthy car industry). There are other statistics that I would use, such as infant mortality, average life span, low numbers of people going bankrupt due to medical problems, etc.

Part of the problem, I think, is that many people are in the business of sickness, not the business of health. As long as profits are tied to sickness, there will be some interesting problems in healthcare.

9:46 AM  
Blogger Jim said...

This is turning into a very interesting conversation!

You are as cynical about markets as I am about government. Maybe this is the root cause of much of the left/right disconnect.

Let's analyze your theory "...that many people are in the business of sickness, not the business of health." How will these people stay in business if everyone remains sick? It is my opinion that all aspects of healthcare in a free market would only be interested in making people well to generate business. If you went to a doctor, hospital, insurance company, etc, and they did not fix your problem, would you not go elsewhere? This is one of the great aspects of a market versus government.

There is always anecdotal evidence of abuses, but overall the open market system has to work to improve peoples health.

One other reaction to your comment on people going broke because of health problems: again I suggest this is the case because government is already so heavily invested in healthcare that costs are out of control. If they were not involved, costs would be more reasonable and so many people would not be going broke, and those that were would be taken care of through private channels.

11:11 AM  
Blogger Curt said...

I agree there are interesting points here. I don't believe I'm so cynical about markets in general; but I do think I'm willing to look critically at what the profit motive can create. It's a powerful force, on that I'm sure we can agree.

Different players in healthcare can have different motives. Clearly the insurance companies would profit if everyone were very healthy and rarely used medical services. How about pharmaceutical companies? I'm less convinced that the profit motive always lines up with the goal of making everyone healthy. It does line up with selling everyone drugs, which may or may not improve people's health.

Think of the ads that were on TV promoting drugs, where the ad didn't even tell you what the drug did, instead simply told you to "Ask your doctor about nnnn", their latest drug. It is in their interest to 'medicalize' conditions that formerly were thought to be fairly natural (shyness is a recent example I've seen), and then sell a solution to that condition.

One can argue, of course, that if a drug is successful, then the market has spoken, and that it is a net benefit to society. I find that argument almost tautological, and not very persuasive, as it seems to deny that there can ever be undesired side effects from market success.

On the topic of costs, however, I think the issue is a bit more complicated than simply government involvement. Economist Arnold Kling makes some persuasive arguments in saying that due to insurance most healthcare consumers are completely insulated from costs, and therefore consume too much healthcare. For example, if it doesn't cost you anything, you might as well have the latest and most expensive tests; which drives up costs across the board.

Here's a recent post by Kling linking doctor salaries to the same issue: over-reliance on specialists leading to poor allocation of doctors.

So I do indeed think it's worth looking at incentive structures in an economic way to help analyze what's going on in the world!

11:22 AM  
Blogger Jim said...

You continue to be cynical about markets. I will continue to be cynical about government.

Health insurance dominates the health care industry due to government. This does not mean they are the insurers - although they undoubtedly are the largest insurer - but they drive the "not so free" market to supply all with insurance as a right. Insurance is not a "right'. Listen to you - and your cohorts - commenting on the "uninsured".

If insurance were eliminated, trust me, costs would drop drastically! Individual responsibility! At the cost of a small percentage of the population "falling through the cracks" of our healthcare system, and being picked up by the private sector.

It would be well worth it.

3:44 PM  
Blogger Curt said...

Okay, I'm cynical - but I really do try to understand what's going on. I understand your point on the insurance companies, and actually tend to agree. (However, I think there are some public health aspects - such as immunizations - that may be better handled by government programs). But are the insurance companies going to go away any time soon? Not likely! A theoretical solution that will not be implemented is not too much use.

But I would like to hear your reaction to my comments on the incentive structures driving pharmaceutical companies.

My sense is that markets drive innovation, not only of solutions but also of 'problems' - some solutions create new problems as side effects, some problems are 'invented' by clever entrepreneurs who create a new niche. The playing field is always moving due to competition. I'm definitely not trying to be cynical here; I'm trying to understand the dynamic that is at work.

And so I'd argue that even our definition of 'health' is a moving target. Kids who used to be called rambunctious are now diagnosed with ADD, and so on. I'm not judging this as a good or bad thing, I'm exploring the ideas.

11:10 PM  
Blogger Jim said...

Several reactions to your last comment:

1. There are exceptions to all rules, and immunization by government or at their direction is one of them for public safety - i.e., stopping epidemics.

2. Don't misunderstand: I don't want to get rid of insurance companies, I want to get rid of government involvement in the insurance business - including social security, medicare, etc. Insurance against all downside situations should exist as a MOTIVATION for citizens to succeed and be able to afford their own. Then the insurance companies and the healthcare would operate in a free market, like car insurance, and costs would not falsely escalate.

3. My response to your third paragraph: "A sucker is born every minute." This old adage is certainly true and I don't know what to do about that in healthcare or any other area of life. Therefore, there will always be a percentage of people taken advantage of by "clever entrepreneurs", but letting the government stabalize the "playing field" directly is not the right fix! Developing a knowledgeable citizenry is a much better fix.

4. Your example of the moving definition of health is a good one. I believe if you got government and teachers unions - which I consider under the all inclusive term government - out of the health business, ADD would not exist - or I should say would have existed as it always has and parents and teachers would deal with it, instead of teachers pushing pills on our kids so they don't have to have such difficulty in their classroom.

Talk about cynicism - I really have it regarding teachers!!!

Side bar: I capitalized MOTIVATION purposely, to comment that many of the "good" government does for the citizenry DE-MOTIVATES that citizenry from being successful!

Now that is a subject to spend some time on.

11:17 AM  
Blogger Curt said...

Good points. Just a few additional comments.

On point 2: On insurance, as you say it should be there to cover downside risk. It seems like it should not be used to cover normal operating costs (in healthcare, this would seem to include checkups but also things like having a baby - a predictable situation). As far as medical costs in old age, this seems harder to say whether it's a normal cost or a unanticipated cost (some folks age with few problems, some surely don't).

On point 3: While I think there are some situations that fit the 'suckers' category, I think the many innovations (the successful ones anyway) really are providing a solution to a real problem. Before phones there was obviously no need for answering machines and voicemail. Google solved a searching problem for a vast internet haystack, and is making lots of money by delivering targeted ads. And so on. The failed innovations usually fail for good reason - they don't provide much real value.

In the health field, the scientific breakthroughs in things like DNA research could really continue to shake things up. Should insurance companies price your coverage based on all your various risk factors in your DNA?

10:20 AM  
Blogger Curt said...

A couple more things...

On ADD: while I imagine the teachers have something to do with it, one can't ignore doctors, parents, and pharmaceutical companies... and I also imagine that this is a genuine problem for some kids and that the drugs can be a big help... but in any case, it's just one situation out of many that continue to shape modern healthcare.

On 'clever' entrepreneurs: I saw a full page ad today in the New Yorker, for a device called the Audéo, which appears to be a hearing aid being pitched to young people.

From their website: "Audéo is a breakthrough for living life to the fullest, bringing back the speech understanding we can start to lose as early as in our twenties. Sleek, stylish and discreet, it is the ultimate high-tech accessory."

Is this a real problem? I have no idea... maybe all the young people listening to loud music with their iPods are ruining their hearing at a young age. Is this hi-tech for suckers, or a health issue that needed a solution? Some people with money seem to think the latter, and we'll see if they succeed.

7:01 PM  

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