Announcing that 50 million Americans are uninsured means nothing. It could be our government’s involvement that has led to the current situation. FULL ARTICLE by Charlie Virgo
Source link: http://archive.mises.org/15711/the-healthcare-herring/
The Healthcare Herring
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>>Shouldn’t we, as a society, make sure that when people are in pain, that they are able to seek treatment without the fear of eternal debt and foreclosure and anything else medicals bills of impressive size would cause?
Good points, but the author misses this red herring.
A common tactic that many use is to cite a societal problem, and have the government solve it. In their worldview: Society = Government. Whereas the correct equation is: Society = Government – Force.
Their counterparts in India try the same tactic when trying to solve societal problems like caste.
Whenever I hear the word “Society” in public discourse, I cringe, since I know what’s coming next.
Kalki
Government = force, therefore society doesn’t exist.
God = force, therefore religion doesn’t exist.
Force = ma, therefore mass and acceleration do not exist.
What we need to do is call out the elderly for using going to the doctor’s office as a social event, and doing so on future generation’s dime.
A visit to a primary care doctor is a cheap, cost effective form of health care. It’s the specialists and the tests they order that are bleeding us dry.
Which is driven by a combined “Medicare will pay it” and “I’ll sue you for being wrong” environment.
The problem I have with the article is no solution is offered,so it amounts to just more bitching.
How about this which I have sent to several congressmen.
Simply make it illegal to offer group rates on insurance,then insurance companies will have to offer some reasonable package to individuals.
The solution is to eliminate government from health care, it is right there in the article.
“Simply make it illegal to offer group rates on insurance,then insurance companies will have to offer some reasonable package to individuals.”
Not exactly sure how this will solve anything given insurance companies are government protected monopolies that we are soon going to be forced to patron whether we like it or not.
Thanks for the feedback. When I wrote it, I was concerned that too many people would think the same thing. In the end, however, I felt that it was important that we learned to look past the simple statistics that are thrown about and actually figured out what is the solution. In other words, the article was meant to point out that in order to find a solution, we have to focus on the right things (which we currently aren’t).
Charlie,
Go horizontal.
Well I guess what I was saying was INSTEAD of Obamacare ,Rather than in addition to. Force them to meet the individual at the market level. Also they should be able to compete across state lines.
Force is unnecessary, an unregulated market is more than sufficient to put the bad actors out of business.
Yeeaaa I don’t really buy into that no regulation line. Markets do regulate them selves, the result is “too little too late”. We just experienced the result of financial market de-regulation. I wasn’t fond of the result. Just like if there were no driving regulations bad drivers would eventually kill themselves. The problem is it’s always too late,and they’ve harmed too many in their path of destruction.
What financial deregulation? I keep asking for people to show me the laws passed and the reduced regulatory spending to back up this claim, yet all I see are tripling of the budget of the SEC and passing of Sarbanes-Oxley. Do you have anything beyond party politic rhetoric to back up the claim that deregulation caused the financial mess? What bill was signed? And no, Glass-Steagal isn’t proof as the entities that Glass-Steagal dealt with didn’t fail. A hint – companies like Washington Mutual Bank were not covered under Glass-Steagal, so that repeal had no impact on them.
Ever hear of a gal named Brooksly born ? Yea she wanted to “regulate” derivatives.
she wasn’t around long for holding that position. I’m not going to cut and paste info or post links you may see as biased,but I would encourage you to do some reading on her and the subject. I guess the point is that glass steagle was part of the problem,but not the only factor. Not regulating derivatives is another step in that direction.
What are you rambling about? What does some random person claiming to want to regulate derivatives, a creation of the FEDERAL GOVERNMENT (more specifically, Fannie Mae), have to do with your claims of phantom deregulation? Don’t change the subject, show me deregulation that wasn’t Glass-Steagal (already established to have nothing to do with the meltdown) to support your claim, or shut up.
Competition across state lines encourages competition amongst state regulation (As opposed to competition amongst insurers). States compete to entice insurance with lax regulation. I would expect something similar to credit card deregulation from ’86.
All in all, I believe you still end up with an insurance monopoly. Does economy of scale apply when discussing “affordable” health insurance? Maybe monopoly isn’t such a bad thing.
An Indiana company wouldn’t sell you a policy based on Indiana medical costs if you are paying for healthcare in a state with higher than Indiana medical costs. Premiums are going to be based on YOUR location and costs, rather than that of the insurer’s location.
Insurance by nature is pretty much a something for nothing proposition. What incentive is there for lower healthcare cost when you only have to sell a policy that is less than cash and carry? I imagine that a physician would rather be a part of the higher paying networks.
This discussion always seems to revolve around the role of government. What about the fact that a multi-billion dollar corporation is negotiating the cost of healthcare for 50K per year customers? Insurance became a popular idea before any state intervention.
Why should we need insurance to pay for health care ?
When you buy a house, do you pay for the house with insurance claims ?
When you buy a car, do you pay for the car with insurance claims ?
When you make an oil change or buy food at the grocery store, do you call your insurance company to pay for your purchases ?
I don’t see why, in free market capitalism, health care should require insurance to pay for it.
I want to pay for my health care and medications out of my own pockets, that way, doctors will need to be competitive, offer the best value for my money and be polite and respectful if they want my business.
Both the house and the car are likely insured against disasters. You can pay for routine healthcare out of pocket, but try that with a major health problem, and you’ll quickly discover why medical bills are the second leading cause of personal bankruptcy in America.
They are insured against catastrophic random disasters. They are not insured against oil change, tire change, paint change, car radio change, they are not insured against running out of gas etc.
And also, they are insured mostly because the government mandates it.
Insurance against routine medical care is what’s jacking up the price of health care and what’s causing catastrophic health problems to cost a lot of money.
Health care should follow free market capitalism.
Insurance is meant as a hedge against catastrophic and unusual future events. It’s a bet. The insurer puts down a wager that you won’t ever need to use the service and you determine that the cost times the percentage ratio of you needing to use the service is greater than the premiums paid. For example, if you decide you only have a 2% chance of needing a $10,000 medical procedure over the next 10 years, you won’t pay more than $200 for this insurance. The insurer also makes a determination and if they decide there’s a 5% chance of that happening, they’ll charge you $500. It’s then up to you to decide if the $500 determination by the insurer is worth it or if you’ll pass because you trust your $200 assessment.
Additionally, nothing is stopping you from becoming self-insured. You don’t have to dump money into an insurance premium when you can take that premium and invest it for that purpose. This is what I do right now. By the time I would reasonably need it, I’ll be sitting on approximately $780k (I’ve been setting aside would-be premiums since 18 and figure that I won’t need it for 50 years, or $100/month at my average return over the past 14 years of 8%), something well above and beyond what insurance companies are willing to cover. Basically, if the medical procedure is going to cost over $780k, insurance wouldn’t do me much good because it wouldn’t pay it.
Of course, if I don’t need to use it, that’s another $780k I’m drawing interest income from for retirement. That’s something people silly enough to dump cash into insurance they don’t need for years to come won’t come home with.
If you’re going to make a logical fallacy the linchpin of your argument, learn what it means. Alluding to the uninsured when arguing for a program to get them insurance is not a red herring. That there may be other ways to accomplish the same goal does not make stating a problem you are trying to solve a red herring in any sense. If the author has an idea about a better way to insure access to healthcare, his time would be better spent in outlining, not this lame “You think we don’t have an answer, but we really do!” Fine. Lay it out for us.
Thank you for your feedback. I still believe that there is a fallacy in the arguments presented. The red herring is the fact that instead of giving real reasons why the government should be in charge of our healthcare, its proponents simply state that 50 million Americans are uninsured. That’s fine and dandy, but what does it do to prove that government is the answer? The same thing applies in reverse. I believe that our healthcare is in its current shape due to meddling by the state. However, I cannot simply state that insurance costs are rising and therefore we have to go to a free market to solve it; I have to explain why it would be better. Knowing that many of the readers/visitors on Mises.org are being bombarded by logical fallacies and don’t realize it, I thought it pertinent to bring it to their attention. That way, when they are discussing the issue with someone who can only bring up statistics, they will see past it. I’m well aware that no specific outline was provided to solve the issue, but that simply wasn’t the point of the article.
As noted above, Robert, I’m uninsured yet I’m in no way in any kind of medical straights. I was used as some ridiculous argument behind ObamaCare. I’m self-insured, and thus in the government’s eyes, uninsured. It is a red herring because it grossly overstates, and may even outright create, a problem that may not exist.
Very well written! It is a good reminder that just because a “solution” is presented doesn’t make it the only solution, or even the best solution. I like that! I like the lasagna example, too–it’s so easy to get off on tangents, forgetting or even neglecting the actual issue. Good Job, Charlie!
Well First, J. “We” haven’t established that Glass-Steagal had no part in the melt down, you have asserted that. Secondly some of us feel that removing the separation between investment banks and depository banks lead to misplaced risk and mal-investment Third the discussion is about un-regulated vs regulated markets I feel at liberty to use any information I deem relevant to the discussion. And fourth no need to get all capital letters, just because I hit a sore spot.
http://www.scribd.com/doc/29150973/Text-of-the-Glass-Steagall-Act
Here’s your challenge. That is the 54 page text of the actual law. Seeing as you support the law, you probably never read it. Show me the page and paragraphs that created the problem that caused entities like Countrywide and WAMU to fail. Remember, passing a bad mortgage to comply with CRA requirements is NOT speculation. And list me the investment banks that failed because of the repeal, not commercial banks.
You’ll need to read all of these sections.
Sec. 16. particularly this. “The business of
dealing in investment securities by the association shall be limited to
purchasing and selling such securities without recourse, solely upon the
order, and for the account of, customers, and in no case for its own account”
Sec. 20. After one year from the date of the enactment of this Act, no member
bank shall be affiliated in any manner described in section 2 (b) hereof with
any corporation, association, business trust, or other similar organization
engaged principally in the issue, flotation, underwriting, public sale, or
distribution at wholesale or retail or through syndicate participation of
stocks, bonds, debentures, notes, or other securities.
Sec. 32. From and after January 1, 1934, no officer or director of any member
bank shall be an officer, director, or manager of any corporation,
partnership, or unincorporated association engaged primarily in the business
of purchasing, selling, or negotiating securities, and no member bank shall
perform the functions of a correspondent bank on behalf of any such
individual, partnership, corporation, or unincorporated association and no
such individual, partnership, corporation, or unincorporated association
shall perform the functions or a correspondent for any member bank or hold on
deposit any funds on behalf of any member bank, unless in any such case there
is a permit therefor issued by the Federal Reserve
Board;
Here’s a question for you J.
Why shouldn’t high risk investment banks be able to use deposits by “Joe public” to make risky high leverage investments?
haha
here a hint
you cant have a free market with government money
They shouldn’t, and that’s the entire point of being 100% against fractional reserve banking.
Just to clarify, you make the mistake of putting words into my mouth. I don’t support anything. If the customer decides to allow the agency to engage in purchasing of securities with his deposit, that’s fine. However, there will be no expectation that the resources will be there when requested and any money tied up in a security will not be available for immediate withdrawl.
You’re thinking in terms of government permission. Stop that. Government is not authorized to give permission to anyone, be it for or against a practice. It’s permission of the owner that’s all that matters. If I wish to allow an institution, whether they call themselves a “bank” or “hedge fund” or even “Jim”, it doesn’t matter. If the agreement is that the money will sit there and be available whenever I ask for it, the bank cannot use it for anything. If the agreement is I put the money into an account, can’t touch it for 5 years, and get out of it whatever happens to be there (investment), that’s my decision.
CitiBank wasn’t bailed out because of Sec. 16, they made bad loans. At no point did they sell securities to customers nor purchase any with deposit accounts.
Countrywide didn’t bankrupt because of Sec. 20, they made bad loans. They were never in the business of floating bonds.
WAMU didn’t bankrupt because of Sec. 32, they made bad loans. I don’t even see how being on the board of directors is even relevant to business failure. Not that it matters, the provision gives the Federal Reserve full option to make exceptions whenever it decides, which is arbitrary.
Just randomly pulling parts of the law and not linking it with an actual failure isn’t proof of anything.
An even big red herring is not the question of why they are uninsured, but to ask if it is even a problem for them that they are uninsured.
A typical conflation of statistics in order to claim that America needs fully-socialized health care is this: someone points out that America is “behind the rest of the developed world” in some health care measurements, such as weight of babies at birth, or whatever. Then they drop in the “50 million are uninsured”. They are implying that the 50 million uninsured people have poor health but that is pure baloney – the unhealthy people who “bring down” the averages for health care outcomes are mostly already on medicare and medicaid. If the USA’s poor health statistics demonstrate anything, it’s that government health care is worse for your health than if you have no health insurance at all.
You should have also addressed the assumptiveness of the argument in regarding the issue as a political problem or duty of “society as a whole” in the first place: “Shouldn’t we, as a society, make sure that when people are in pain, that they are able to seek treatment without the fear of eternal debt and foreclosure and anything else medicals bills of impressive size would cause?”
This assumes a collectivized ethics, that a man’s life belongs to “we” “as a society,” and it is “our” (or his) job to decide to set “our” goals, to dispose of and distribute “our” lives and work. This necessarily assumes an individual’s life is nothing more than the means to the ends of others, and that some may be sacrificed to whatever the needs of others are said to be.
In other words the answer to the question “shouldn’t ‘we’ as a society should make sure . . .” be “no”?
We, as a society, should ensure that a man can freely trade his labor for possessions, which he can store or trade for medical care should he need it, and that he can freely decide to not do this and face the consequences of his actions (otherwise he will have no reason to save).
ROBERT (the troll) said: “You can pay for routine healthcare out of pocket, but try that with a major health problem, and you’ll quickly discover why medical bills are the second leading cause of personal bankruptcy in America.” Robert, that is another red herring!
If it is a fact that medical bills are the second leading cause of personal bankruptcy in America, so what? That has nothing to do with the question of whether or not to adopt Obamacare. Even if Obamacare could reduce personal bankruptcies, which it wont (see below), you are assuming without proof or reason that reducing personal bankruptcy by transferring personal liabilities to the government, which is the best that Obamacare can hope to do in this regard, is a good thing. As a matter of fact, I am confident that the majority of Americans, and undoubtedly a majority of taxpaying Americans, would rather you go bankrupt because of your personal medical bills than have the federal government go bankrupt, an event to which Obamacare will in due course have contributed mightily. (Note: inflating–viz., depreciating the value of the dollar– its way out of literal bankruptcy, which is the equivalent to government bankruptcy, doesn’t count.)
It is plainly wrong to assume that Obamacare will reduce rather than increase personal bankruptcies. Government involvement in the health care industry since World War II is the major factor contributing to the exorbitant cost of health care in America, which causes medical expenses to lead to personal bankruptcies. The best solution to the exorbitant-cost problem is to remove government involvement in health care. Adding Obamacare can only further increase costs. Robert, try to use a little common sense: The cost of American’s health care must ultimately be paid for by Americans. Adding a huge government bureaucracy, burdening regulations, along with the attendant waste, corruption and fraud that invariably accompany government programs, must add substantially to the total cost of health care in America. What with the already huge federal-budget deficit, the federal government eventually will not be able to pay for Obamacare and will have no choice but to shift those bloated costs, by hook, or crook, by tax or by mandates, or slight of hand, back on to individuals–causing more personal bankruptcies.
As government keeps adding to the cost of health care with such boondoggles as Obamacare and Busnmedication, the entire health-care industry is likely to suffer a crack-up collapse not unlike that of the late and forthcoming busts in the housing industry. The federal government’s stated desire to make housing affordable for everyone, accomplished by means of its Fannies and Freddies and Ginnies, its FHAs, VHAs, FMHAs, etc., has had the opposite effect. Victims throughout American are being evicted from their homes, and empty foreclosed homes are everywhere depreciating housing values aggravating the bust. The problem facing government programs in both housing and health care today were anticipated and succintly explicated long ago by Maggie Thatcher when she pointed out that “”The problem with socialism is that eventually you run out of other people’s money .”
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