I agree with Ron Bailey's column on Bush's health-care proposals, until I get to his proposed solution:

My advice to President Bush on how really to jumpstart consumer-driven health care: mandatory private health insurance. Poor Americans would be offered a voucher with which they would buy private health coverage. Such vouchers could be paid for by abolishing Medicaid and the State Children's Health Insurance Programs....Mandatory private health insurance would avoid the problem of adverse selection, provide insurance for the currently uninsured and make consumer-driven health care work for every American.

While this would be (in theory) a vast improvement over the current employer-driven mess, there's one problem, which is why I say "in theory": How is it enforced? What happens to people who don't do it? With mandatory auto insurance, one in theory revokes the privilege of driving if one doesn't obey the law, but what's the equivalent for health insurance?

I suppose the libertarian response is, "their tough luck." It's mine, too, but it doesn't seem very politically correct, or from a policy standpoint, politically palatable.

There are also some people who would group together to form self-insurance pools like we can for car insurance. There has to be a way out for the Libertarians if we want to be pc. 8)

Is that even necessarily a good idea? Over-insurance is probably not the best way to reduce overhead in the medical sector. Keep in mind that there is a difference between health INSURANCE and health CARE, though you wouldn't know it by the rhetoric that gets tossed around these days.

Did you read the piece? What he's proposing is a combination of true insurance (catastrophic, with a high deductible) and a health savings plan that's tax deductible (basically what I do now, except I don't get much if any deduction on my out of pocket).

Mandatory private insurance = single payer + executive pay + marketing costs.

Assuming, of course there is a regulatory mechanism for correcting for adverse selection, which despite Bailey's insistance, would be the market response with independent private insurers - basically, if you had an existing medical condition, your premiums would only be limited by bankruptcy law.

And enforced risk pooling would undermine the rationale for going private - the ability to find the cheapest (perceived) deal.

So, yeah, this is a dopey idea, based on a flawed analysis of the fundamental problem with American healthcare. The problem is not hypochondriacs getting endless tests; it is the American reluctance to die cheaply (witness the Terri Schavio fiasco). Rational actor market assumptions tend to break down on the death bed, and that's where the expenses go.

The problem is not hypochondriacs getting endless tests; it is the American reluctance to die cheaply (witness the Terri Schavio fiasco).

While your diagnosis may be correct, the Terri Schiavo situation is a lousy example. The costs of keeping her alive were pretty cheap (she required no specialized life support--just a feeding tube), and the family was willing to pick up the tab, IIRC.

The costs of keeping her alive were pretty cheap

It's the labour cost that get you in the end - 24-hour care is not cheap, especially in the current nursing labour market.

Just like the (just reprieved) shuttle program actually...

So, yeah, this is a dopey idea, based on a flawed analysis of the fundamental problem with American healthcare. The problem is not hypochondriacs getting endless tests; it is the American reluctance to die cheaply (witness the Terri Schavio fiasco). Rational actor market assumptions tend to break down on the death bed, and that's where the expenses go.

How does "dying expensively" inflate even routine health care? Recall how much it costs just to get glanced at by a physician and to run routine tests.

I also am starting to detest the "rational actor" in economic theory. Too often it seems that the term is misapplied. If you fail to consider the full range of costs and benefits to an actor, then their actions may seem irrational even though they aren't. Frankly, I don't think that "rational behavior" is even well-defined in the complex real world.

Ultimately, I believe the whole US system has been rigged to spur demand for and to restrict supply of health care. This needs to be dealt with because among other things, it currently makes employing people in the US more expensive.

So, yeah, this is a dopey idea, based on a flawed analysis of the fundamental problem with American healthcare. The problem is not hypochondriacs getting endless tests; it is the American reluctance to die cheaply (witness the Terri Schavio fiasco). Rational actor market assumptions tend to break down on the death bed, and that's where the expenses go.

How does "dying expensively" inflate even routine health care? Recall how much it costs just to get glanced at by a physician and to run routine tests.

I also am starting to detest the "rational actor" in economic theory. Too often it seems that the term is misapplied. If you fail to consider the full range of costs and benefits to an actor, then their actions may seem irrational even though they aren't. Frankly, I don't think that "rational behavior" is even well-defined in the complex real world.

Ultimately, I believe the whole US system has been rigged to spur demand for and to restrict supply of health care. This needs to be dealt with because among other things, it currently makes employing people in the US more expensive.

Rand,
For the vast majority of Americans, HSA's are the answer to the left created "health care crisis".
Putting aside tax excempt earnings, when you're young and healthy, to pay for the deductibles when you're no longer the same, is only economic common sense, unless you're Paul Krugman or the state of MD.
Mike

Karl,
How does "dying expensively" inflate even routine health care? Recall how much it costs just to get glanced at by a physician and to run routine tests.
It's because the pricing for those tests is determined by the infinite demand at the end of life, rather than routine checkups. The industry can afford to set its prices well above what rational normal demand might support.

In fact, the logic is pretty similar to that behind defences of "price gouging", with the difference that people are dying on an ongoing basis.

With the collapse of the former Soviet Union they've become purely capitalist with regard to health. No money, no care, or food, or a place to rest... How's it work. According to my wife, much better than what we have here. Doctors actually work with the patient. They don't just push pills. Plus you actually get to see a doctor, not some nurse pretending to be a doctor. They don't have the FDA artificially keeping the cost of medic*tion high. Quacks don't survive long in a capilist environment, the word gets around quick. We have become the socialists!

When I moved to this area I needed a new doctor. I think the guy they assigned me was about 12yrs. old. One visit and I haven't gone back... and I'm somebody that needs a doctor. It's pathetic.

Insurance is always a gamble, so no doubt, many would gamble they'll live. The best example is car insurance. Even with mandatory laws, many people drive without liability insurance. With little to take, even going after these people in court, after an accident, is a losing proposition. The only alternative is jailing those who violate the law.

With health care, these people will die on the streets. A libertarian may find that just. The problem isn't that they die for their mistakes, but that they'll be desperate and have few inhibitions for covering up for those mistakes. It dangerous for police to enforce laws on people with no inhibition. The insured population would have to enforce these laws with the willingness to use deadly force.

Robin: Keep in mind that there is a difference between health INSURANCE and health CARE, though you wouldn't know it by the rhetoric that gets tossed around these days.

This is a very important point. Insurance makes the cost of health care go up by the amount of profit the insurance company makes. It certainly cost more for those with little need like the young healthy single individual whose insurance premiums are high to pay for the sickly and those with large families who pay the same premium.