The Insurance Model

Let me start here with this article by David Goldhill. If I was a good blogger, I would have made a big deal about this back in August when I first read it. The article is long but well worth it. His father went into a hospital with pneumonia and died from hospital related infections. The author then spent a year trying to figure out how to improve things.

I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.

He talks about the way our health care is currently set up. We've taken an insurance model and expanded it to nearly every related health event of our lives. That's not what insurance does well. Our rising costs (without any end in sight) is a result of that. In the article, Goldhill notes that even the other industrial countries with universal healthcare have seen comparable rise in costs over the last decade. Putting the whole shebang under one umbrella doesn't drop the cost.
Think of healthcare costs as being in two different categories. One of those is for catastrophic events and costs. These are things (car accidents, serious diseases, etc.) that happen out of the blue and can threaten your entire financial livelihood. Insurance is well developed for this type of event. You buy home insurance because you fear fire and flood, not because you'll need to repaint or replace the windows.
The other type of healthcare cost is more routine. Prescriptions drugs, check-ups and lesser illnesses, for instance. Even routine natal care gives most people time to shop for various services and locations. A growing field of medicine has to do with orthopedic surgery for sports injuries. Most of these could be shopped for as well. All of these could use the Lasik model. Thanks to Walmart and Walgreens, prescription drugs already do. There is no reason why prices for these shouldn't be going down to a point where most people could pay them out of pocket or (at worst) with short term loans.
The problem is that we've mixed the two. Everyone needs insurance to protect against the really bad stuff but we've made it very tough to buy for just the catastrophic. And once you've shelled out a bunch of money for the routine stuff, by God, you will use it. Throw in the fact that consumers don't make decisions based on cost and you have a recipe for ever increasing costs.
If we want to control prices (and hopefully make some of them drop) then we need to change the structure. To do this we need to allow people to shop for the insurance that suits them best, which means allowing interstate purchases. We also need to do away with onerous minimum coverage requirements. For instance, a post menopausal woman shouldn't be forced to buy natal coverage.
I've heard various pro-Obamacare folks make the case against insurance companies and especially their very evil execs. The ironic thing is that if they succeed they will put tons of new money in their pocket. Instead, they could stop forcing people into their arms and actually allow the markets to work.
They should.

How to Fix Healthcare

In all of the things that I've read about this subject over the past four or five months, this encapsulates well the few easy things that could be done to alter the rising scope of healthcare costs.

Callous Children

Great column from Peggy Noonan in the WSJ:

Part of the reason is that the problems—debt, spending, war—seem too big. But a larger part is that our government, from the White House through Congress and so many state and local governments, seems to be demonstrating every day that they cannot make things better. They are not offering a new path, they are only offering old paths—spend more, regulate more, tax more in an attempt to make us more healthy locally and nationally. And in the long term everyone—well, not those in government, but most everyone else—seems to know that won't work. It's not a way out. It's not a path through.

That sums things up for me. I don't have faith that our political class even has a handle on how to fix our problems, much less the will to do the difficult things necessary to do so. All that they know how to do is throw money around and pass laws without the slightest thought to unintended consequences.
Nor do I have faith that they will avoid corruption while setting up their 'solutions'. We've already seen that the health care process has been taken over by open lobbying. We see favors handed out without the blink of an eye. And the vaunted Fourth Estate? They won't hold anyone's feet to the fire anymore. 'Truth to Power' has been exposed as an empty phrase.

We are governed at all levels by America's luckiest children, sons and daughters of the abundance, and they call themselves optimists but they're not optimists—they're unimaginative. They don't have faith, they've just never been foreclosed on. They are stupid and they are callous, and they don't mind it when people become disheartened. They don't even notice.

What gets me is that there isn't even the hint of a solution out there. Just band-aids as far as the eye can see. This needs to change and change quickly.

Polanski

It seems that the whole Polanski debate is setting up along the left/right cultural divide. For the life of me, I can't figure out why it would. The crime was too icky to be merely brushed away as some kind of sexual hangup thing. The due process territory is pretty clear and not really in an area where battles are normally fought.
The only thing I can think of is that the left is generally more sympathetic to artists. I get that (and don't have any issue with it) but I can't believe it's really enough to cover this. At least I don't want to believe it.

Update: This post here suggests that there is also a divide between elite and rank and file on the left. I don't remember a similar divide in the past.

Other Options

I keep hearing that Republicans shouldn't criticize Obamacare proposals unless they have an alternative proposal. Never mind that there are Republican bills that have been proposed with alternatives, there are certainly plenty of other ideas that have been put forth online. The idea that a massive government system is the only viable way to fix our current bad system is patently false.
And besides, back in 2002-2003 during the run-up to the Iraq war there was huge opposition to W's 'war on terror'. Democrats (and liberals) didn't, and still haven't put forth a credible alternative to fighting international terrorism. Note that I'm not saying it is the only way, I'm simply saying that on this crucial issue all they could do was criticize and offer half hearted platitudes. Even now with a Democratic President in the White House and both parties of congress controlled by WOT critics, there has been very little change.
I don't suppose we can expect that alternative anytime soon.

Light Blogging

It may seem odd to post such a thing on a blog that gets about a post a month but I feel bad about the lack of posts over here. You see, I don't really like to comment on stuff right away because there is usually some bit of context that either deepens the issue or (more usually) muddles it. I like for the waters to calm a bit so I feel like I have a better handle. This has meant that over the last few months (especially with the health care debate) that I've gotten very behind. Each time I think of putting something up, I'm bogged down by the large number of posts that I didn't write earlier.
Well, I know how to handle this. The first rule of blogger's block is this: Get over yourself and write some things. That's what I'm going to do now.

Social Institutions

Here is an outstanding post calling for humility on the issue of gay marriage. Megan argues that many previous reforms were attempted for good and compelling reasons and the results were terrible for marriage. She also points out that 'people who don't see the use of a social institution are the last people who should be allowed to reform it':

In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, "I don't see the use of this; let us clear it away." To which the more intelligent type of reformer will do well to answer: "If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it."

This paradox rests on the most elementary common sense. The gate or fence did not grow there. It was not set up by somnambulists who built it in their sleep. It is highly improbable that it was put there by escaped lunatics who were for some reason loose in the street. Some person had some reason for thinking it would be a good thing for somebody. And until we know what the reason was, we really cannot judge whether the reason was reasonable. It is extremely probable that we have overlooked some whole aspect of the question, if something set up by human beings like ourselves seems to be entirely meaningless and mysterious. There are reformers who get over this difficulty by assuming that all their fathers were fools; but if that be so, we can only say that folly appears to be a hereditary disease. But the truth is that nobody has any business to destroy a social institution until he has really seen it as an historical institution. If he knows how it arose, and what purposes it was supposed to serve, he may really be able to say that they were bad purposes, that they have since become bad purposes, or that they are purposes which are no longer served. But if he simply stares at the thing as a senseless monstrosity that has somehow sprung up in his path, it is he and not the traditionalist who is suffering from an illusion.

I've never heard this argument before (she quotes from G.K. Chesterton) but it certainly makes sense. The idea that marriage is 'just a piece of paper' is fairly widespread in our society. Many of the people that say that also say that same piece of paper won't keep them together with their partner. While that might be true for them it inarguable that the decline of marriage as an institution has been devastating in segments of our society.
I do support gay marriage but the 'tradition argument' gives me pause. I think that our society has come to a point where same sex couples are able to live on a more even par with hetero couples. I also think that a significant portion of same sex couples are hyper-committed to each other. My hope is that including them in the world of marriage will strengthen the overall institution.
But...I'm far from certain.