More Raging Health Care Debate

February 21, 2007

There’s a long and remarkably informed and civil debate on the merits of universal health care going on over at Brad Warthen’s Blog. I’ve added This Idiot’s input a couple of times, and my comments have been singled out by an uber-mensch going by “Lee”. Here’s an excerpt of our exchange:


You’re mighty quick to brand any system with a government component as evil “socialism,” but I bet you don’t have a problem with the government taxing you to provide national defense. Why not eliminate that evil socialist program and hire your own army? Every man for himself. Hoo Ahh!

Contrary to your assessment, I am a strong believer in the capitalist system. No better way to deliver bushels of corn and iPods to the masses and let the power of individualized decision making do its magic. But a pure market model wouldn’t work for national defense, and it’s not working for private health care insurance. The incentives are all wrong.

To address a couple of your comments directly:

Medicare has never come close to controlling its costs, so I don’t know that any administrator is worth what they are being paid.

Are you suggesting that the private insurance system is controlling costs? Is that why my private insurance premiums go up 15-25% every year, though they’ve never paid me a penny in 11 years? Boy, I feel so much better paying the private insurance CEO 84 times more that of a government functionary, since he’s doing such a good job of keeping my premiums down.

The only way socialist medical care can reduce costs is by cheating the caregivers, stealing from those who pay their own way, and denying care to those in critical need.

Wrong. We could cut over $50 billion annually from by-passing the private insurance industry, (read the McKinsey report) who have totally dropped the ball by transferring much of the risk that they are paid to carry back to patients, providers, and taxpayers.  UHC would eliminate the private bureaucracy for claims denial and weeding out of people likely to need care, among other private-specific costs, like advertising, campaign contributions, and plush lobbying junkets.

“Negotiating drug prices” is a deceptive euphemism for government dictating to drug companies to hand over their intellectual property for much less than it is worth.

I’m not opposed to drug patents or other intellectual property rights, but you fail to explain how it makes any sense to grant monopoly rights to life saving drugs on the one hand and not exercise some restraint on monopoly prices on the other. I can live without a copyrighted book or a patent-protected iPod, but I might not be able to live without a patent-protected drug. When you’re dealing with life and death, the whole cost/benefit judgement breaks down because your life is basically worth every penny you’ve got. Therefore, it makes no sense to allow unrestrained monopoly drug pricing.

My local government granted Duke Energy monopoly control over the electrical grid. But they weren’t so naive as to let Duke charge whatever they feel like or believe the market can bear.  Prices are regulated and every increase must be justified and approved. Under the arrangement, Duke manages to provide pretty good service and provide private shareholders with a reasonable return on their investment. The arrangement would seem to fit your definition of “socialist”, but most folks around here are pretty happy with the private-public system as is.

The whole patent/copyright system is a legal construct entirely of our own making. What law of nature or markets divined that designs or formulas should be protected for 17 years? Why not 2 years or 10,000 years? Interested parties got together and decided that 17 years struck a good balance between rewarding the inventors’ individual effort and allowing society to benefit from the new technologies (which build upon previous public-domain technology). Imagine if innovations like the boat hull or the wheel or the antibiotic were patent-protected in perpetuity. Such a social/legal construct would radically distort the progress of innovation and direct vast wealth towards people or companies who had little or nothing to do with the original innovation. So, we pick a number – 17 years. Who’s to say that that number shouldn’t be shorter for cancer drugs and longer for iPods? Society decides. I’m sorry if the S-word scares you.

Lee, if the private health insurance system worked in the open market the way iPods and bushels of corn do, we wouldn’t be having this discussion. Come to think of it, bushels of corn are subsidized, ostensibly to protect producers from the rigors of the free market. Go figure.

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