Robin Hood and his Merry Men

[Alfonso Jones]

Essential fact [THE ESSENTIAL FACT]: Government involvement directly and indirectly and government money makes health care so expensive. This is also true of education and all such boondoggles. Prices expand to sop up the money. Government involvement also makes medicine comparatively primitive to what it would otherwise be.

--Brant

Exactly: Government interference with the market for health care drives costs up and quality down. As it does in general when the government enters the economy.

Bill P

[merjet]

I am trying to draw a distinction between figuring out the facts relevant to the ethical implications of one's actions, versus accepting things as they are at face value.

So am I and you did not answer my questions in post #21 at all.

With the advent of the modern nation-state, these grants came to be granted by duly constituted civil authorities, and are protected by the force of the state, moreso than are individuals or truly private associations. I am not advocating for this, merely stating facts.

Yes, while omitting other facts that weigh against you. Robert Hessen's In Defense of the Corporation has a far more complete history.

If a sole proprietor or a partner in a directly-owned business encounters the lawsuit you mentioned above, what happens? The owners lose their shirts.

Is the liability of creditors unlimited? No. Should they be?

Note your comment about Lloyd's membership is not really relevant. It didn't stop them from going broke in the 90's, and the individual members lost their shirts!

Was the liability of creditors and shareholders unlimited? No.

An insurance company is just another specie of bank.

False. An insurance company cannot inflate the money supply like a bank can. Banks don't insure risks.

So either start calling 'em all what they are, or fire the whole lot of them & abolish the insurance corporations!

This is not a free market philosophy, but the method of a dictator.

Medical malpractice is a concern, but it is a very small fraction, like 1%, of all medical expenses.

[Steve Gagne]

Merlin --

Let me apologize to you for taking so long to respond. I can't get a straight answer out of the newsmedia as to where the vote on this healthcare thing stands tonight. I agree with you that the new proposed law is a travesty. I just see it from a different angle than you do. So I can understand your consternation at my pigheadedness when it ***appears*** that we are arguing at cross purposes.

You see the health care bill as a disaster waiting to happen.

So do I.

You think the health care bill will destroy medicine.

So do I.

You want a free market solution.

So do I.

You believe we have a free market NOW, which the health care bill will destroy.

This is where we differ.

So, picky, picky, picky.

There is such a thing as a conspiracy in restraint of trade, and the largest one has historically been the government, in collusion with the organizations and corporations of one industry or another. (Think doctors, lawyers, electric utilities, telephones, railroads, trucking, etc.)

In response to the abuses in these areas, government has generally been only too willing to step in & regulate someone else, typically, those hurt by the abuses, in the name of "protecting the public interest".

Doctors prospered during the 1800's both under the AMA (formed in 1859) & under the state licensing boards. These organizations originally claimed to be enforcing higher education standards to protect the public, but were actually used to prevent the formation of medical schools, and to limit the number of doctors.

Because these organizations were recognized as the "experts" by government, their member's opinions bore the force of law, legitimizing allopathic medicine (including bloodletting and deliberate mercury poioning) while effectively outlawing homeopathic medicine (who, while not necessarily more effective, followed Hippocrates more closely, i.e., "First, do no harm."). This situation has eased a little in recent years, with some branches of homeopathic medicine being recognized as legitimate treatment, but allopathic medicine is still touted as the only "real" medicine.

Shortly after the War between the States, there was also a federal court ruling that, to paraphrase, insurance companies were not a business, not interstate commerce, and thus free to do whatever they damned well pleased. Which worked well as business model. No special protections, no special governmental favors. Just freedom, privacy, profitability. The private insurance industry grew and prospered to a "natural level" (for lack of a better term; c.f. Adam Smith's "invisible hand").

The industry went on to finance private testing labs for product testing, to insure products worked and did not endanger peoples' safety. These labs, called "Underwriters' Laboratories" (UL) are some of the finest research labs that ever existed, and are a perfect example of private industrial self-regulation. (Their standards later became the foundation for the present-day ISO quality standards.)

But insurance coverage was by no means universal, least of all in the area of health care. So the medical field was not dependent on insurance for its solvency. Although the doctors earned more than most within their communities (with good reason), medical care remained affordable. Even during the depression, doctors many times lived by barter, an affordable alternative to all patients dying of sickness and all doctors dying of starvation. But I digress.

We come upon WW II; there was a shortage of qualified help, and employers started using the tax-free benefits of health insurance, as an incentive to workers to accept and stay at their jobs. As this situation grew, the coverage that had been sought by organized labor for over a generation became commonplace, either with or without organized representation. And due to the war effort, the government, as the largest source of employment, became the single largest subsidizer of the health insurance companies.

Meanwhile, in an unrelated development, the Justice Department came to the conclusion that fire insurance companies were colluding to fix insurance premiums, etc. etc. etc. An action was taken by the antitrust enforcers against the insurance companies; the SCOTUS ruling in US vs. South Eastern Underwriters' Association as summarized below:

U.S. Supreme Court

United States v. South-Eastern Underwriters, 322 U.S. 533 (1944)

United States v. South-Eastern Underwriters Association

No. 354

Argued January 11, 1944

Decided June 5, 1944

322 U.S. 533

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF GEORGIA

1. A fire insurance company which conducts a substantial part of its business transactions across state lines is engaged in "commerce among the several States," and subject to regulation by Congress under the Commerce Clause. P. 322 U. S. 539.

2. A conspiracy to restrain interstate trade and commerce by fixing and maintaining arbitrary and noncompetitive premium rates on fire and allied lines of insurance, and a conspiracy to monopolize interstate trade and commerce in such lines of insurance, held violations of the Sherman Antitrust Act. P. 322 U. S. 553.

3. Congress did not intend that the business of insurance should be exempt from the operation of the Sherman Act. Pp. 322 U. S. 553, 322 U. S. 560.

Suddenly, all these "non-business" insurance businesses found themselves turned upside-down: the coffers of the health insurance companies, overflowing with government money, had all kinds of new strings attached, and they were going to have to start competing in a newly-hostile environment.

The insurance company lobbyists appealed to Congress to reverse the effects of the activist SCOTUS justices who had thrown precedent out the window. In 1945, Congress responded with the McCarran-Ferguson Act, which was supposed to restore the previous standing of the insurance companies, but in fact did no such thing. What it did was, rather than restore the previous equilibrium, it had the unintended consequence of turning the existing insurance companies into a protected oligopoly. Locked together with a legally protected profession. This is the position the health insurance industry has held ever since. This is not a free-market system; it has not gotten better but worse in the last 64 years.

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Now, I believe your criticism is made in good faith, so to your specific complaints:

I am trying to draw a distinction between figuring out the facts relevant to the ethical implications of one's actions, versus accepting things as they are at face value.

So am I and you did not answer my questions in post #21 at all.

I am not really sure what you are looking for that I did not address.

You asked about investors, then asked me to make it personal, putting myself in shoes of the investors. I responded that, were I in the priviliged position of owning stock in a business corporation, I would be shielded by law from bearing that responsibility, which I would be forced to bear by that same law, were I a general partner or sole proprietor of the business instead. As I stated earlier, this is a statement of fact, law, and social policy.

You also asked, "Since when does this sort of government intervention mean 'free market'?" What I had said was that government coersion is already inherent in the system, in the protection of the medical field, in the protections of insurance companies, and in the protection of corporations in general. This is where we differ. You are misled by the illusion of a free market that just isn't there.

Note that I did not say this is a delusion on your part. Rather, it is an illusion that is being foisted on you (as well as the rest of the American public), by people who want the defeat of socialized medicine, but see nothing wrong in the expediency of using the Big Lie to effect it.

With the advent of the modern nation-state, these grants came to be granted by duly constituted civil authorities, and are protected by the force of the state, moreso than are individuals or truly private associations. I am not advocating for this, merely stating facts.

Yes, while omitting other facts that weigh against you. Robert Hessen's In Defense of the Corporation has a far more complete history.

What I omitted was a lot of irrelevant data. I didn't realize you needed me to write you a book. Even if you did need it, I'm not going to do it. It just wouldn't be prudent, at this particular juncture (j/k)....But thank you for a new resource.

If a sole proprietor or a partner in a directly-owned business encounters the lawsuit you mentioned above, what happens? The owners lose their shirts.

Is the liability of creditors unlimited? No. Should they be?

Ummm...I don't understand this comment. I'm not sure how the term "creditors" got in here....did you mean to use a different term, or perhaps you're using it in a manner that I would not. But as I said, I don't understand what you're asking me.

Note your comment about Lloyd's membership is not really relevant. It didn't stop them from going broke in the 90's, and the individual members lost their shirts!

Was the liability of creditors and shareholders unlimited? No.

Ditto the comment about creditors.

As far as the shareholders, the role of an insurance underwriter (e.g., Lloyds') is to absorb a defined amount of monetizable risk for someone else, for a price. I do not question the legitimacy of this as a business proposition. It was not an unlimited liability that caused Lloyds' to go broke, but actuarial errors that caused payouts far in excess of their collectable premiums. And the "shareholders" of Lloyds' that were not incorporated were not protected by law from paying the debts, whereas the incorporated members were protected.

An insurance company is just another specie of bank.

False. An insurance company cannot inflate the money supply like a bank can. Banks don't insure risks.

Actually, the description as I originally wrote it was true. You just left out half of it. As far as inflating the money supply, a loan from an insurance company follows the same multiplier effect as a loan from a bank, so yes, insurance companies do inflate the money supply, just as a bank does. And as far as "insuring" risks, both insurance companies and banks ABSORB risk, for a price: insurance companies call it a "premium", banks call it "interest". The name is different but the song remains the same.....it's called "Let's play games with YOUR money."

So either start calling 'em all what they are, or fire the whole lot of them & abolish the insurance corporations!

This is not a free market philosophy, but the method of a dictator.

Do you mean to state that it would be dictatorial to dismantle a current system that is based on government coersion (to which I have already alluded), but perfectly okay to let that system continue, when it could well result in the destruction of any future productivity that this country could have? Would it be dictatorial to eliminate the Fed? Would it be dictatorial to eliminate the IRS? The Education Department? Health and Human Services Department? The Agriculture Department? The Department of the Interior? No? Then why, pray tell, is it dictatorial to eliminate the legal and economic privileges granted to a group of companies, that act as a government-enforced oligopoly, financing a government-protected profession, especially when THEIR "entitlements" stand to bankrupt all of us?

Medical malpractice is a concern, but it is a very small fraction, like 1%, of all medical expenses.

I am not familiar with your sources, so if that is what your own research has led you to believe, I have no basis for challenging it.

What I do know of it is that I live in an area that has an average age 17 years older than the national average. Because of this, there is an extraordinary number of doctors, hospitals, surgery centers, rehab centers, etc. etc. etc. here. The typical doctor around here makes $800k to $1.25m per annum. (There are some who make more, but it's typically because of investments rather than direct fees-for-services.) Of that amount, that typical doctor is paying $450k to $800k per annum in professional liability (malpractice) insurance premiums. Hard to guess where that money is coming from. Because of the excess expenses, many of the doctors have taken matters into their own hands: they go "bare", i.e., operate WITHOUT malpractice insurance, and they won't accept patients who won't sign a waiver concerning malpractice lawsuits and binding arbitration. (That's why we have independent surgery centers here -- the hospitals won't let these doctors in.) The doctors are more careful, they make fewer mistakes, and they charge less.

Now who can argue with that?

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I just got the news...the bill passed. Damnation.

House passes health care bill on close vote (AP)

[Steve Gagne]

Jeff --

You phrase your post as if you're expecting an argument. Although I was not advocating for any of your points, neither was I denying them.

There are a number of errors in your post--you seem to totally misunderstand the nature of corporations and insurance companies, for one thing--but I want to focus on the part that's immediately relevant to health care.

(I don't see the basis for your opening comment. Insurance is money manipulation. Corporations are welfare. Period.)

The idea that malpractice premiums and malpractice suits and lawyers are important factors in the cost of health care is totally wrong. They do have an impact, but not that much of an impact.

See my answer to Merlin above. Give me better numbers than my anecdotal reports.

And to blame "defensive medicine" is laughable. The correct term for "defensive medicine" is "the doctor doing what the doctor should be doing even if he wasn't concerned with malpractice".

I don't recall discussing this subject.

The essential component of malpractice is after all, malpractice--the doctor not doing things that should be reasonably done--negligence, in legalese.

See my last point to Merlin above. Doctors without malpractice coverage are better doctors and cost less.

What is driving health care up is a combination of technology (in particular, the high costs related thereto) and the impossibility to compare pricing in any rational way.

I agree, these are also factors, but they are not under our control. The things I discussed can be.

For instance, a basic colonoscopy--which every person over a certain age should have every so many years to screen for cancer--costs, once the various lab and doctor bills are totalled in, about $3000 or more (at least in my area); but it's not possible to find out what the costs are, or how much a patient would actually be billed if he or she lacked insurance, until after the procedure. Sometimes well after. (My most recent colonoscopy was almost a year ago, and I still am waiting for a couple of bills to come in for it.) How many people have that amount of money handy every few years, if they don't have access to insurance? And how practicable is it to shop around for the best price if you are paying on your own--if your doctor even lets you pick the facility (mine doesn't)? And that's for things which you can plan for well in advance. Emergencies, of course, you are almost totally at the whim of whatever hospital the ambulance delivers you to.

The vagaries of modern life.

Essential fact: because of technology, standard medicine is now too expensive for most people to afford on their own.

Essential fact: most people in our society don't accept that it's moral to give people "second-best" medicine simply because they can't afford it, and to give other people "first-rate" medicine simply because they can afford it.

Therefore, any health care "reform" has to include the capability of giving everyone "first rate" medicine (including the expensive technologies) if it is to be politically viable.

First "essential fact", yes, advanced technology is definitely in the mix, but I don't see it as the primary cost driver.

Second "essential fact", I would need to see the data on that one.

As far as your conclusion, it follows from your unproven premises, but looks a little wobbly on its face due to its supposed dependence upon those premises. But though your premises could be (but may not be) fully supported by reality, your conclusion definitely is real. Part of the problem is that few people recognize that this country has all the material resources it needs to satisfy virtually every whim of every citizen for the next 600-800 years. We have the capacity for universal feeding, universal housing, universal education, universal health care, universal productivity and creativity. We have the capacity to become the head of OPEC, buy all the "carbon credits" the world has to give, and still have plenty to left to spend. This is only visible who those who utilize the "abundance model" of resource management; those who base their understandings on the "scarcity model" common to socialistic systems will find these comments obtuse if not believing them to be outright lies.

[Steve Gagne]

A propos to my earlier comments about doctors "going bare", CNN had this story:

http://money.cnn.com/2013/06/11/news/economy/cash-only-doctors/index.html