Thursday, November 19, 2009

Clearly the answer is more free market health care

CIGNA denies hearing implant to child who will never be able to hear if she doesn't get it within the next few months.

Isn’t it wonderful that in the right wing's wonderful free market world this child doesn’t have to worry about the evil government getting between her doctors and her health care? And the magical Free Market Fairy smiles because that's $20,000 higher bonus that CIGNA's CEO can get next year. Why do you want to make the Free Market Fairy frown by, well, saying that this girl should be receiving the health care that her parents paid insurance money for? Heresy!

So why are we bothering with protecting these bastards, again?

-- Badtux the Snarky Penguin


  1. Two faulty premises. First, you talk as if we have free market conditions in the first place. Absolutely incorrect. (a la this article)

    Second, you talk as if free-marketeers give a whip about insurance companies. Totally false. In a free-market scenario health outcomes are not measured by whether you have an insurance policy. In fact, free market plans that I advocate would definitely break the insurer monopoly on health finance.

    Finally, it is inside-the-box thinking that says that this procedure must cost $20,000. I have seen one surgeon testify that there is no reason for the exorbitant surgery prices except for the market distortions that are heaped on. I wouldn't be surprised if the price of this procedure in a real free market would be 10,000 or less. What parent, if they had to, wouldn't go out and get a loan for 10k to ensure their child has hearing?

  2. I'll leave it to BT to address your first two points. Except to say that the arguments against Govt sponsored health care are from free market enthusiasts, so BT's comment is relevant and valid.

    But you need to understand that "a real free market" is a myth. There have never been and will never be any. Your homework assignment is to figure out why.

    The rationality of the cost of the procedure, or lack thereof, is not particularly relevant to the discussion. It costs what it costs, and this girl's parents have no bargaining power.

    So the loan would be for $20K, not $10K. Let's not distort.

    I didn't see anything about the family's financial condition. So, I'll put forth a hypothetical. It might not specifically apply to this case, but it will some another, just as sad. In case you haven't noticed, we're in the biggest credit contraction since the 30's. What if mom and dad are out of work and behind on their mortgage payments? What if they've already maxed out their credit cards on Dr. bills and other necessities, because they could never get ahead on their minimum wage jobs, anyway? Visualize their credit report. I just got mine today, and though my credit history is impeccable, it is loaded with nasty editorial commentary.

    So - where in your free market are they going to find a lender for their $20,000 loan?

    This is the sort of hare-brained non-thinking that makes me WANT to be rude.

    JzB the gentleman trombonist

  3. I would have trouble getting a $20K loan right now, and I happen to already have $20K in the bank and a six figure salary. Banks are not lending.

    Regarding mystical beliefs in Free Market Fairies, I will simply point out that it has never worked like that for health care in the history of this planet, and stamping your feet and insisting "It works! It really is!" is about as ridiculous as stamping your feet and whining "Santa Claus is real!" A free market requires a commodity that can be bought and sold in a market. You cannot go down to a market and sell your hearing to someone else. It simply does not work like that. Your hearing is not apricots or fruit roll-ups, it cannot be bought and sold like bags of rice, and stamping your feet and insisting otherwise makes you simply look ridiculous.

    I do agree that surgeries and such are overpriced. But they are overpriced because your health is literally of infinite value -- once you do not have it, you'll never have it again. If you go deaf because you do not have ear surgery when you need it, if you go blind because you do not have eye surgery when you need it, you will never hear or see again. Surgeons have literally infinite market power to set price on a "take it or leave it" basis, and no amount of hand waving and shouting "The Free Market Fairy is real! She is! Waaaah!" will change that.

    - Badtux the Healthcare Penguin

  4. Oh yeah, what WOULD change that? Socialized medicine, since then society could tell surgeons, "you will perform the surgery for this price, or else you get to live under a bridge and beg for alms for your living." But socialized medicine makes the Free Market Fairy cry, so you're against it.

    - Badtux the Economics Penguin

  5. I probably launched too many strands of debate at once. I mostly just wanted to point out the faulty premise that we don't live under a free market in health care.

    When I read the original post the thesis put forth came across as:
    Free markets have created the current conditions whereby insurance companies deny coverage for important treatments.

    For this to be true, you'd have to show that at some point a free market in health care existed, and second, that it created the conditions where people are routinely denied coverage they thought they had.

    I can show that free markets in health care haven't existed for about 50 years. That article I linked to earlier explains it. As Jazz would say, do some homework. It is in the section Health Insurance Isn't Health Care half way down.

    So since insurance companies have had an employer based monopoly pretty much the duration of their existences, we simply don't know what free market insurance would look like based on historical evidence.

    I think a better thesis statement would be:
    The employer based funding model has led Americans into a dependency on comprehensive health plans provided by insurers who have an employer granted monopoly. The monopoly together with comprehensive low deductible plans combine to place insurers at the center of almost all health transactions. These middlemen are less in a position to understand the true value of services to either providers or consumers but they make a lot of money doing it and have no interest in restoring free market discipline.

    I guess that is kind of wordy. Maybe getting back to the point more precisely: government tax incentives unintentionally created the current mess including the insurance paradigm itself.

  6. "So why are we bothering with protecting these bastards, again?"

    Who? The greedy insurance companies or their congresswhores?

  7. Nathan -

    You have a truly uncanny talent for missing the point.

    JzB the pointed trombonist

  8. i wonder if the CEO'd daughter had to get permission for her surgery?

    yea free market! USA is great!

    everyone is a capitalist until their kid needs medical care or they drive on a paved street or their house is destroyed by a hurricane - or until they turn 65 when they get the infamous "dont touch my medicare!"

    badtux, as usual spot on

  9. Jazz,
    So what is the point?

    I'd politely suggest that it is you who is missing the point. My point is that insurance isn't the only way to provide health care. You're socialized medicine approaches are a prime example. They are cost sharing systems, not insurance. Risk sharing isn't the same as cost sharing.

    Don't you see that we are both advocating to knock insurance companies off the top of the hill? You want to knock them off by co-opting them as partners with the government in controlling health care. I want to knock them off by making them irrelevant to 90% of health care.

    The fact that insurance companies might team up with free marketers to oppose obamacare does *not* mean that insurance companies care about free markets or that free marketers care about insurance companies. Big insurance loves the status quo, and you can bet that under Obamacare they'll still figure out how to bilk the public. It is much easier to lobby legislators for special protections and loopholes then it is to do the hard work of pleasing consumers.

    You need to understand that Republicans are not free marketeers in general. They talk a good game, but have failed time and again. So when Republicans oppose Obamacare and some perhaps want to protect insurance companies, it does not mean they represent the free market position. You and Tux condemned free markets by association.

    We don't have a free market in healthcare, so our nation's current problems cannot be chalked up to free market forces no matter how much you stamp your feet and say it is so. Did you even read David Goldhill's article? In what ways do suppose Obamacare even begins to address these problems?

    Finally, you have some homework with regard to knowing what a free market is. No free marketeer will ever say that we don't need government. Government is essential to a free market. My personal stance is that I don't even care if we get close to a free market ideal because I see the value of a mixed economy and how it satisfies certain psychological and emotional needs.

    Free markets have been defined very carefully by the Freedom Index. They begin with a quote by Friedman "The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the “rules of the game” and as an umpire to interpret and enforce the rules decided on. What the market does is to reduce greatly the
    range of issues that must be decided through political means, and thereby to minimize the extent to which government need participate directly in the game."
    Read the whole thing here

    Thus, never assume that a free marketeer wants cute little girls to go without hearing surgery. It is a flat out lie. We simply advocate conditions whereby they very necessity of government intervention is reduced (but never eliminated).

    For a better idea of my ideal vision of how health care should work, see this You'll see that I clearly advocate a role for government as the "health provider of last resort".

  10. Nathan, you're *still* missing the point. The point is that the "free market" would never provide surgery for this girl at a reasonable cost. The free market only works for things that can be bought and sold like commodities or which at least competes with things that can be bought and sold like commodities. Refractive vision correction, for example, can be bought and sold like a commodity -- you can buy eyeglasses or sell eyeglasses, you can buy contacts or sell contacts, and if you buy something and don't like it you can sell it to somebody else and buy something different. Even LASIK surgery can be treated as a commodity in this case, since it competes with eyeglasses and contacts, two things that can be bought and sold like commodities. But hearing cannot be bought and sold like a commodity. You have it, or you don't.

    In short, my point was that the free market does not solve every problem, not that the free market is useless for all problems. In this case, the free market would not give this girl the surgery she needs in order to hear, because there is literally no value that can be placed upon hearing. You can't sell your hearing on the free market to someone else. It's not a commodity that you can exchange for some other commodity. It is something inherent to you, and aside from being ridiculous on its face, claiming that a child's hearing is a free market commodity is as offensive as claiming that children sold into slavery are a free market commodity. It is offensive to fundamental human values.

    Unfortunately, there are people who would state that the free market can never be wrong, and thus that this child's parents should be allowed to sell her into slavery. After all, it's the free market, which means it cannot be wrong or immoral, correct? I know that you aren't one of these people. I am just pointing out the logical consequences of the attitude that the free market is the solution to all problems (in this case, the problem of parents who cannot afford ear surgery for their child). Selling their child to a rich man would probably get this girl the surgery she needs, but people who believe that would be a moral thing to do have something wrong with them -- we have a name for them, "sociopath." At which point I give in and admit that there is such a thing as evil...

    - Badtux the "Markets are a tool, not a religion" Penguin


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