Trust busting, or cartel building?
if you think monopoly bargaining is the problem in health care, our cost problem is going to get worse, not better. Think of the one area where we see the most customer complaints: quasi-public utilities like the cable and phone companies. They also have a rather ponderous rate of innovation, and no particular interest in controlling their costs. That’s not an accident; it’s a feature of a regulatory structure that starts from provider costs and works up to what extra percentage they will be allowed to charge essentially captive consumers.
The notion that we need the government to “compete” with insurance companies is economically insane. As I’ve said before, if they need competition, let them compete with each other. That they don’t is a result of flawed government policy, which the lunacy that is passing the Congress will only make much worse.
As a commenter there notes, this bill will essentially ban true private insurance. If this becomes law, expect to see an underground economy and black market in health care.
This particular facet is a baffling one to discuss with a liberal. “So, you think ‘Big Med’ has gotten too large for its britches, so you want to effectively subsume it into government. You’d be moving from ‘cartel’ to ‘pure monopoly’, why on earth do you expect improvement? The one feature that’s quite nice is the government providing adversarial oversight. And… now you’d be switching to ‘internal review.’ Not to mention that overhead tends to increase with the size of the organization – so there won’t be savings involved.”
If by “private” one means “market created”, yes, the destruction of market-based health insurance is the undeniable goal of the bill.
The second statement is rather questionable. Unless they’ve added something to the bill which criminalizes first-party payments (I wouldn’t put it past them, but I don’t remember reading that), I suspect that the reverse will be true: cash will be king and you’ll likely get even deeper out-of pocket discounts than you find today.
…cash will be king and you’ll likely get even deeper out-of pocket discounts than you find today…
Sounds like the very definition of underground economy, at least in the context of this government plan.
“Underground economy” usually means an untaxed transaction, preferably in cash. So long as the doctor isn’t dodging taxes, I don’t know where the beef would be — unless they’re just control freaks.
It’s also different than a “black market” where the good itself is illegal to trade. It’s easy to distinguish the two — you pay a smuggler’s premium for the black market good, whereas the former exchange entails a discount (by reducing deadweight loss).
“Underground economy” usually means an untaxed transaction, preferably in cash.
That’s why I said “in the context of this government plan.” They are health-care transactions that fall outside the scope of the bureaucracy, even if they are taxed. Which means that the government has no power over them.
That’s an optimistic appraisal of the situation, if I may say so. They’ll still have even greater control over the supply even if they’re not picking-up the tab.
AT&T Bell Labs innovated quite a lot when they were a monopoly. Transistor. Laser. UNIX. C. C++. The list goes on and on. So it is not true that monopolies cannot be innovative. It depends on the corporate culture.
Godzilla, they also innovated a lot more when they weren’t a monopoly. Also consider that innovation is not just sexy science like lasers. There was vast post-monopoly innovation of more mundane things like phone design or long distance service. Those things changed more in the ten years after the end of the monopoly than they had changed in the prior history of telecommunications.
Karl, what is innovation then? D&G golden cellphones with encrusted diamonds?
A lot of things changed while AT&T were a monopoly, and a lot was done to reduce costs, unlike the quote’s claim that there is “no particular interest in controlling costs” for “quasi-public utilities like the cable and phone companies”. Automated switchboards were an innovation that reduced costs. Where it used to take many, many operators doing manual switching before, automated switching took over in the 1940s and 1950s. Touch-tone dialing was another innovation, that sped up dialing time.
All of the “sexy” science I mentioned eventually was, and still is, used in telecoms even if it may not have seemed applicable at the time. Bell Labs did shorter term research as well. The AMPS mobile cell phone system – developed by Bell Labs for AT&T. Touch-tone dialing same thing. Even the keyboard layout we are used to seeing in phones was developed at Bell Labs. Try googling “Human Factors Engineering Studies of the Design and Use of Pushbutton Telephone Sets”.
Some Carribean nation is set to make a killing by encouraging cutting edge medical research making their island a destination for medical tourism and hospital spas for the super-wealthy.
Eric, the super-wealthy will have no trouble getting what they need here. Congress and other members of the Plutocracy are smart enough to not cut their own throats. It’s the middle-class and poor who pay the price for any and all of their mistakes.
Godzilla, what innovations do you expect to emerge from the soon-to-be-utilitized health insurance industry? They certainly won’t be able to craft novel policies, as those will be specified by the federal commissioner.
Karl, what is innovation then?
The introduction of something new. In the business world, it’s the process of converting an idea into a sellable product. Even a new phone design is an innovation and something AT&T never got around to addressing.
Godzilla, a private monopoly has some interest in cutting cost and increasing profit further. So as in the case of AT&T there will be a modest amount of innovation, which will be focused on reducing the cost of business. Competition is required if you want serious innovation that improves the value of the good or service being provided.
Titus: “Innovations” in healthcare will include centralized medical databases, web appointment scheduling, web record consultation, web exam consultation. Which are not particularly innovative but will/are happening regardless.
I also suspect exams will be increasingly automated, reaching a point where more places will conduct exams because no professional is required to actually do the exams. Doppler ultrasonography will become ubiquitous and portable. Blood tests will be conducted on the spot, or be replaced by saliva tests.
Godzilla, to be clear, I’m talking about insurance, not medical technology. We all hope that innovations in the latter continue despite Obamacare.
If anyone wants to see what government-run health care will be like in the US, just spend a few hours in the DMV. Those are the same people who will decide whether you get surgery or not, whether you get an MRI right away or in 8 months, and so on.
Since when is insurance, or for that matter banking, or whatever, supposed to be innovative? You can automate the business processes using computer information systems and push the front desk to the web. What else can you do?
Which innovation are they supposed to do? Gamble insurance money in the stock market, or by buying toxic assets? Use multi-level marketing to sell insurance? I can do fine without such innovation.
It should at least be agile enough for its policies to keep up with what medicine can do.
I fear that an insurance sector set in government-mandated concrete will slow medical innovation to a glacial pace.
…and provide coverage which people, you know, want. There’s this guy out there called, “the customer,” who’s about to become the least important person in Obamacareland…