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April 11, 2005

The trouble with health care

I'm a big fan of Ruben Bolling's comic strip Tom the Dancing Bug. Sure, his politics are way, way, way to the left of mine, but unlike certain other lefty cartoonists I could mention, Bolling a) is a highly talented artist, b) is wickedly funny, and c) isn't too much of a raving partisan to slam his own side once in awhile. For example, he's justly ridiculed the lynching of Trent Lott and those who claim the President should have been able to prevent 9/11 based on the PDB he received. (Links require paid subscription.)

I mention this because Bolling's comic of July 28, 2001 is a pretty good illustration of what's wrong with the health care industry in the United States and why we face ever-increasing costs and premiums.

Td010728

(I assume that reprinting a four-year-old comic to discuss its political ramifications is a legitimate and unobjectionable fair use. If either Bolling or his syndicate has a problem with this, please contact me.)

Bolling hits closer to the truth than he might realize here; just look at what he compares health insurance to. A gym membership is not insurance. A buffet admission is not insurance. An airline ticket is not insurance. A parachute is most definitely not insurance. And neither, for that matter, is health insurance.

What we call "health insurance" isn't "insurance" in any meaningful sense of the word. Insurance is a device for hedging risk. Going to the doctor once a year to get poked, prodded, and have blood drawn isn't a risk; it's a regular recurring expense. It's something to be budgeted for, not something to be insured against.

Today's health care system, in which employers routinely provide employees with free medical care, is an artifact of government interference with the free market. In August 1971, Richard Nixon imposed wage and price controls on the American economy in an effort to stem inflation. As with most governmental interventions in the marketplace this was a dismal failure and inflation went on to triple in three years, but during this period companies were faced with the problem of attracting quality employees without being able to compete on price. They solved the problem by competing on benefits, offering attractive health care packages in lieu of the higher salaries which were now against the law. The wage controls went on to the well-deserved dustbin of history, but the culture of employer-provided health care remains.

This health "insurance" system has the effect of totally divorcing demand from price. Just like the buffet line Bolling compares it to, consumers can consume all they want without seeing any increase in marginal cost. But while buffet food is cheap, doctor salaries and prescription drugs are dear indeed. The result of this distortion of the free market is to wildly inflate demand, driving real costs through the roof.

In the spirit of Bolling's analogy, I'd like to draw my own hypothetical comparison, this time to something that really is insurance. Unfortunately I'm not a good artist and I can't draw an amusing comic, so I'll have to make do with text.

IF AUTO INSURANCE WORKED THE WAY HEALTH "INSURANCE" WORKS...

  • It would cover routine maintenance. Get your oil changed as often as you want, have your tires rotated weekly, and send the bill to someone else.
  • It would cover diagnostics. If your car is making a funny rattle, or it seems a little sluggish in the winter, or you're merely pathologically lonely and enjoy the company of mechanics, just bring it in, and State Farm picks up the tab.
  • If the insurance-paid diagnostics fail to discover a problem that later becomes worse, you can sue the mechanic and hit the jackpot.
  • Because of the above, all diagnostic inspections would involve total disassembly of the vehicle and examination of every single part under a microscope. The cost for such a labor-intensive procedure would fall on the insurer.
  • If a repair is botched despite the good faith best efforts of the mechanic, it's back to court for another jackpot.
  • Not only would insurance cover gasoline, but there would be little or no difference in cost to the consumer between self-serve regular and white-gloved full-service premium.
  • If somebody invented a new gasoline additive that marginally improved performance but cost $100 per gallon, all existing insurance policies would be required by law to cover it.
  • If a person didn't have auto insurance, but his car threw a connecting rod and cracked a cylinder, mechanics would be required by law to give him a new engine for free. The cost would be passed on to consumers through their insurers.

Imagine what would happen to auto insurance premiums in the above scenario, and you start to get an idea of why health care in this country is so costly and is rapidy getting moreso.

April 11, 2005 in Current Affairs | Permalink

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Comments

God damnit, come back to Something Awful. I'm posting a thread on this, it really hits right on.

Posted by: ShadowHawk | Apr 11, 2005 10:36:39 AM

Seconded.

Posted by: WhiskeyJuvenile | Apr 11, 2005 10:56:04 AM

No, come to ArsTechnica. Somethingawful has at least one regular conservative, something Ars can't claim.

Posted by: TehBadPlace | Apr 11, 2005 3:23:14 PM

fantastic post

Posted by: Name | Apr 11, 2005 10:05:06 PM

Look, guys, hopefully this will be the last time I have to say this.

I can't tell you how unbelievably touched I am by all the emails I've gotten asking me to go back to Something Awful. I've even gotten four offers to pay my registration fee, which is almost overwhelming. But there's a matter of principle involved. I'm not trying to be a drama whore here, which is why I've never mentioned it on this blog, but I was wronged, and until and unless restitution and an apology are forthcoming I won't be back. I miss the place, but that's that. Let's let that be the end of it, okay?

(Did you notice that Jonah Goldberg is a goon?)

As for Ars Technica, I lurked there a bit and I'm not impressed. It's too slow-moving and the quality of discourse there is really subpar. I'll keep lurking and maybe I'll think about participating, but don't hold your breath.

Posted by: Voice of Reason | Apr 12, 2005 10:52:24 PM

So... my girlfriend runs her own business, which looks like it might take off in the next year or so. She devotes all (I mean all) of her time to making it work. She can't afford health insurance. The other day we were talking about the risks of not having health insurance and she mentioned she hadn't had a mammogram in a while. She's of the age where she should have regular checkups and was worried. Her mom had breast cancer.

"Why don't you go get a mammogram?" I asked. "It's important and you can get them free nearly anywhere."

"I can't," she replied. "If I get a mammogram and they find cancer no company will insure me if they know I'm sick. Better to wait until I get insured before I find out."

"oh. I hadn't thought about that."

I relate this story only because people aren't cars, and there can be real human cost to increasingly exclusive health care in this country.

Posted by: Hobospider | Apr 13, 2005 2:38:40 PM

Can't afford health insurance, can she? I'm sorry to hear that, but has she really looked into it? I just called up State Farm, and in about five minutes I received a quote for a $2,000,000 term health policy, paying out 100% after a $2,500 deductible. Price: $36.39 per month. That's for a 32-year-old male; presumably the premium would be lower still for a younger insuree, a higher deductible, a lower maximum payout, or any kind of copay. Sure, a $2,500 deductible means she'd be out-of-pocket for her routine medical expenses, but she'd be covered should she happen to get run over by a bus. (The premium for a $500 deductible was less than $30 per month more.)

Your girlfriend has made the choice that she would prefer to be an uninsured entrepreneur than an insured employee. There's risk involved in that choice, but there's risk involved in every choice. Only she can decide her own level of risk tolerance. Who are we to say her choices are bad ones? Who is she to demand that we subsidize her risky choices?

Yes, there's real human cost to the fact that health care actually costs money. There's also real human cost to the fact that food and land cost money; that doesn't mean that the government should give them away for free. That doesn't even mean that if the government gave them away for free, the net human cost would be lower.

Posted by: Voice of Reason | Apr 13, 2005 3:13:29 PM

I can see where you're coming from re: somethingawful. Any right-of-center poster was immediately given a large insulting custom title and gang-raped in every thread by a horde of liberal college kids who haven't lived a day of their lives in the real world.

It was sickening for quite a while, and it still is sometimes (most of the time?). I've seen right-of-center posters treated differenty by mods than the liberal masses. Conservatives are seen more often as 'trolls' because the liberal mods have a knee-jerk emotional reaction to what's said and don't (or didn't) even ATTEMPT a moment of objectivity.

It really was a liberal circle jerk, it might still be. I don't read it as often as I did before the election.

The schadenfrude (sp?) was delicious, for sure. Shit, it still is. I need to visit D&D more often! haha

Posted by: Name | Apr 13, 2005 10:25:33 PM

Actually VoR the government does give food away to those who can't afford it. Feeding the hungry is part of that whole "compassion for others" thing humans have.

Posted by: Hobospider | Apr 14, 2005 8:32:21 AM

It's not "compassionate" to give away somebody else's property.

Ask yourself what would happen if the government provided unlimited free food to everybody. Pretty soon things like steak and fine wine would be heavily rationed or just plain unavailable. And the public would probably blame the evil, greedy, gouging supermarket owners for the problem.

Posted by: Voice of Reason | Apr 14, 2005 11:41:02 AM

Well, I had to try and get you to come to ArsTechnica. The political forum there is full of liberals who deride conservatives as the "paint by numbers" crowd and constantly bitch about how EVIIIILLL Israel is, so I wanted you to go in there and present a Voice of Reason.

One of the most prominent posters who is actually a moderator advocates infanticide if desired by the parent until an infant can speak and feed himself.

Posted by: TehBadPlace | Apr 14, 2005 3:53:43 PM

I'm not sure how you got from "giving away food to those who can't afford it" to "giving unlimited free food (including steak and wine) to everybody." I'll give you the benefit of the doubt and assume you weren't deliberately trying to mischaracterize my argument.

Posted by: Hobospider | Apr 14, 2005 4:50:01 PM

Well, it's quite simple. We're discussing food by way of analogy with health care. The most common position advocated by those who favor greater government involvement in the health care system is universal single-payer health care, akin to that which exists in the "civilized" countries of Europe or in Canada. The equivalent system in comestibles would be unlimited free food for all. Does that not follow?

Posted by: Voice of Reason | Apr 14, 2005 6:19:30 PM

By the way, Hobospider, your girlfriend should really seriously consider picking up a cheap catastrophic health policy like the one I was quoted from State Farm. She's right that she'd have difficulty finding insurance should she be diagnosed with cancer, but she'll have almost as much of a problem if she approaches an insurer with a gap in coverage.

Posted by: Voice of Reason | Apr 14, 2005 7:39:44 PM

Thanks for the advice- I'll pass it along. It seems we were grazing up against the larger debate of government's role in caring for its citizens, which is a long form argument that has no place in a blog comments section. Cheers!

Posted by: Hobospider | Apr 15, 2005 9:11:14 PM

As long as we're bitching about mods, is it just me or is McCaine rapidly approaching Hangly-esque levels of 'I don't care about the real world if it doesn't fit my theories'?

Posted by: dzd | Apr 16, 2005 7:40:46 AM

We're not bitching about mods. This blog is not about Something Awful. My comment above was the first and hopefully last and only time I'll mention it here. If you want to bitch about Something Awful mods, please take it elsewhere.

Posted by: Voice of Reason | Apr 16, 2005 10:50:32 AM

Hey everybody, I'm an idiotic comment spammer who tries to sell insurance by spewing crap on blogs I don't read. If you are in California and are in the market for health insurance, I strongly recommend that you do NOT buy from me, unless you want a disreputable spamming scumbag as an insurance agent.

Posted by: Carol Roane [was "California Health Insurance"] | Nov 17, 2005 4:55:24 PM

Heh- owned.

Posted by: Hobospider | Nov 20, 2005 12:34:27 PM

I could be wrong, but I think Carol Roane is trying to use your blog to create backlinks to her site in google to increase her rankings with them. So as long as you leave the actual URL on your blog its doing exactly what she wants.

Posted by: Ryan | Nov 22, 2005 12:16:20 PM

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