Eddie Spaghetti is a man of means. Looking to multiply those means he looks around for a good investment. Upon doing so he discovers Jose Conseco's Steroids and Bats Emporium. Jose, wanting to expand into the baseball business as well, is in need of some fresh investment capital. They talk, they sign contracts, and shortly Jose Conseco's Steroids and Bats Emporium becomes JC's Steroids, Bats, and Balls Super Center. The very first day Joe, Mo, and Flo all arrive in need of steroids, bats, and balls respectively. They collect their products, pay the cashier, and the transactions are completed. Everyone is happy; it's a fine business. It is not from kindness that Jose sells Joe, Mo, and Flo their goods, however, nor the charity of Eddie which leads him to lend money to Jose, but rather because what they all hope to obtain from the deal: profit. It is the profit motive which compels them to act, and it is the profit motive which makes them good people.
Eddie Spaghetti, now enriched, looks for another business opportunity. He finds Darryl Strawberry and his Baseball Glove and Medical Insurance Warehouse. Looking to expand, they talk, they sign contracts, and shortly D. Strawberry's Baseball Glove and Medical Insurance Warehouse expands into four neighboring territories. The very first day Joe, Mo, and Flo arrive at the store all coincidentally in need of health insurance. They peruse the options, discuss with the agent, and the transactions are completed. Joe and Mo leave with insurance, but Flo does not. Flo, it seems, is from San Antonio and her diabetes, polycystic ovarian syndrome, hairy chin, and compulsive cigarette use have precluded her from being insurance eligible. Mo has chronic medical issues himself, having lingering lung problems from contracting tuberculosis while working in the Peace Corps years back, and so has to pay a higher premium, but he is simply happy to have any coverage at all. That year Mo's tuberculosis, thought beaten, returns and is found to be multi-drug resistant. Due to pre existing condition exclusions and high copayments Mo is later led to file for bankruptcy. Some people are happy, some people are not; it's the health insurance business. It is not from the stinginess of Darryl that he denies Flo coverage, nor the greediness of Eddie that leads him to reject the claims of Mo, but rather because of what they all hope to obtain from the deal: profit. It is the profit motive which compels them to act, and it is the profit motive which makes them bad people.
As often stated I make no claims of being an economist. I did my two semesters in college, found them to be moderately interesting, and then moved on. Pareto efficiency and fiduciary relationships tend to give me seizures. Thankfully, the economics of health insurance are relatively straightforward. Whereas in most industries the profit motive spurs towards better products for less money produced more efficiently -- by practically speaking reducing costs and competitively pricing -- this is not so with the business of medical coverage. Instead in the health insurance industry product supply and demand are both constrained by the nondiscretionary nature of most medical care, cost management is limited by the science of medicine, and negative selection drives insurers to discriminatory distributions of coverage. Practically speaking, profit is obtained by maximizing coverage of healthy people and minimizing coverage of the sick. This may work for a large percentage of the population that is healthy or only mildly ill, but it will never and can never succeed in providing adequate care at reasonable prices to that sizable segment of the population with serious, chronic medical disease or the significant portion of the population that will find itself one day burdened with the same. It is not because of lack of competition nor lack of compassion, but simple, straightforward economics. You can not make money off of a Down Syndrome child and there is no profit to be had from lymphoma and leukemia.
And so socialism.
Socialism as a theory is currently empty. It is no way to run an economy. Nevertheless, there are lessons to be learned and numerous possible isolated applications to be had, and it is essential that we as Americans, with our historical fear of anything smelling of communism, remember this. Especially in our current and likely numerous future debates about health care. Socialized fire protection, socialized police security, socialized national defense, and socialized park systems are all industries long since collectivized, and happily so. Although there is today some debate about further privatizing education and many utilities the fact is for most these industries' histories they have contributed to a better and more prosperous nation and even today they continue to provide reliable, cost-effective business to those desiring their services. Few complain that the police department has a monopoly on preserving domestic order or that there is no competition to watch over our parks and maintain our monuments. Whether we realize it or not, we are in many ways a partially socialized nation already. Somethings are best tackled in spite of any profit that can be derived.
Such it is with health care. We can tweak and adjust, modify and massage, hope and pray, and we will never find a comprehensive solution or even a partial coverage solution at a reasonable price using private coverage. No matter how deductibles are calculated or plans are managed, medical insurance will remain expensive and outside the hands of a good number of people. Even Obama's hybrid system that satisfies no one and confuses everyone will not likely significantly change things. Universal coverage on the other hand abandons the false pretense that money can be made providing adequate health care and simply focuses on doing the best for the most with what we've got. It will certainly add some to our waits and reduce some efficiency, no doubt, but what do we have now? Our hospitals are already full, good people already fall through the cracks, care is already being rationed. Without the burdensome bureaucracy that accompanies herding a dozen different insurance programs and without the waste pervasive in the system as a result of poor communication and repeat testing the added costs would by most calculations likely be minimal. If the entire rest of the Western world can get by doing it -- if the French and the Italians can manage it -- certainly we can do one better. In the end universal health care is much like democracy; it is not a great option, but it is certainly the best one. There is, unfortunately, no "good way" to take care of people. And nothing makes this more clear than the economics of it all.
The OECD, US, and health care.Medical insurance and bankruptcy.Conservative case for universal health coverage.Socialism!
A picture from my apartment. If only I had a balcony. Or a little gratitude.
