On "Their" Being Something Missing From An Idiot Blogger's Healthcare Free Market Magic Argument

Thirty-two of the thirty-three developed nations have universal health care, with the United States being the lone exception ~ quote from True Cost, a blog on American policy, economics, and social issues, as examined through the concept of "true cost".

rAtional nAtion, an individual I frequently disagree with recently made a comment on the blog of Willis Hart which I believe has some merit to it.

rAtional nAtion: I'm wondering if their is something missing here. I recall seeing an actual bill for childbirth back in the day. Total cost just over 300 dollars. Ever shopped for health insurance on the private market? It's interesting that prices for comparable plans Don't vary much and prices never seem to come down. (6/10/2014 AT 7:42pm).

This is in response to a Willis Hart Libertarian-bullplop "the free market can solve all our problems" screed, as follows...

Willis Hart: On the Idiotic Assertion that Competition Won't Bring Down the Cost of Healthcare Because Healthcare is a Necessity... This is an easy one to refute, folks. All that you have to do is compare healthcare spending as percentage of GDP prior to Medicare and Medicaid with that of what it's been since these programs. And here's the evidence. For the first 180 years or so of the republic, healthcare spending as a percentage of GDP was consistently in the low to middle single-digits, and it wasn't until government got massively involved (in the 1960s) that the numbers started skyrocketing. And the reasons for this are obvious. Whenever government gets into the business of subsiding something, the cost of that something invariably escalates. That, and the third-party payment system acts as a disincentive for folks to shop around and be better consumers, take better care of themselves, etc. I mean, I know that the phrase, "getting rid of the middle man", has gotten a little clicheish over the years but in this instance I gotta go along with it. (6/10/2014 AT 7:23pm).

Like the Word Salad Man I am also wondering if "their" is something missing. Scratch that... I'm positive THERE is something missing... because I know what it is. Missing from Hart's analysis of the healthcare market is the fact that other industrialized nations have Single Payer insurance. And THEIR subsidization is very high. However, their costs are much lower. But Willis foolishly overlooks this fact to make his magical "free market" argument.

Turns out it is Willis Hart's nonsense that is easy to refute. We really SHOULD get rid of the "middle man" and costs really would come down. Except we should replace the middle man who greedily desires huge profits (the private HC insurance companies) and replace them with a middle man that will do the job for no profit. That would be Single payer, a middle man insurance setup (and we do need to do this via insurance) where everything is under the control of We The People.

So, REALLY, why did health care costs being skyrocketing in the 60s? Willis blames government subsidization, and foolishly says it's "obvious" that "whenever government gets into the business of subsiding something, the cost of that something invariably escalates".

Sorry, but no, that was NOT the reason. As Forbes points out, in an article titled the "capitalist case for nonprofit health insurance", the reason for the costs going up was because we switched from a nonprofit to a profit model.

financial writer John Girouard: If you want to know what went wrong with our healthcare system and the best way to fix it, all you have to do is look back a few decades to a time when health care was a community concern, considered as essential as any public utility. ... Blue Cross, the most recognizable name, began in 1929 as a tax-exempt insurer covering a community of teachers in Dallas. Blue Shield was started as a tax-exempt insurer to cover employees of mining and lumber companies in the Pacific Northwest, with a group of local doctors providing care through a service bureau. We lost the positive aspects of affiliation health insurance starting in the 1960s and through the 1980s when Wall Street discovered there was money to be made turning nonprofit health insurers, hospitals and nursing homes into investor-owned companies. (Link to the 10/12/2009 article).

The greed of Wall Street is why the United States did not go the route of the other 32 developed nations. By the way, the "True Cost" blog says "the US will have universal health care in 2014 using an insurance mandate system" but this is not true given the SCOTUS decision that individual states could refuse the Medicaid expansion. Those too poor to afford HCI in those states still are without access. As a result 5.7 million Americans in 24 states that could otherwise qualify for Medicaid have been left behind - that is according to the White House website.

In addition, a transition to Single Payer is at least feasible, unlike the foolish Hartster's idea of getting rid of HCI altogether (except for catastrophic coverage). I guess he thinks Congress will be able (and willing) to pass a law getting rid of insurance companies... then what? Some people die during the transition period as people "shopping around" begins to drive down prices.

More likely quite a few people would die before the HC providers realized they had to make due with less profit. Although I imagine a lot of hospitals would close their doors. Yeah, I think a LOT of people would be onboard for this brilliant plan of action... NOT.

And I guess he thinks that when everyone is "shopping around" for the lowest prices, the HC insurers won't gouge for that catastrophic coverage because... who the f*ck knows?

A better idea? Transition to Single Payer by allowing people to buy into Medicare. Slowly the HC insurers would go not for profit or go out of business.

Finally, the assertion that competition won't bring down costs because healthcare is a necessity is not "idiotic", it is TRUE.

Joe Flower, author of Healthcare Beyond Reform: Doing It Right for Half the Cost: For the most part, people do not access health care for fun. Recreational colonoscopies are not big drivers of health care costs. In some cases, such as cosmetic surgery or laser eye corrections, the decision is clearly one the buyer can make. It's a classic economic decision: "Do I like this enough to pay for it?" But for the most part, people only access healthcare because they feel they have to. [Also] Risk has no relation to ability to pay. A poor person does not suddenly discover an absolute need to buy a new Jaguar, but may well suddenly discover an absolute need for the services of a neurosurgeon, an oncologist, a cancer center, and everything that goes with it. And the need is truly absolute. The demand is literally, "You obtain this or you die".

A person can shop around for the lowest price, but for a market to be "free" a person must be able to decide NOT to buy at all. Supply and demand drives a free market, and, obviously, when the demand is such that people must buy your product or die, the supplier can charge more. The only thing idiotic here is that someone would be deluded enough (by Libertarian free market fantasies) to believe this is not the case.

SWTD #261, wDel #66. See also OST #19.