The Ring of Gyges & Health Care

By: hawkgrrrl
June 12, 2012

Last week we talked about the temptations individuals would have if there were no accountability and no consequences for their actions.  What about in society at large?  We see the same effect whenever there is a lack of transparency which creates exploitable loopholes that benefit some at the expense of others without consequences.

Corporations

I recently watched a great movie called Margin Call about a company of stock traders.  Some low level traders discover that their company is holding some very toxic assets and that the market is on the verge of collapse.  [spoiler alert!] In response, their board of directors instructs the sales force to dump those assets and will reward them $1.7M each if they reach their targets within 3 hours, knowing that after that time, their credibility will be completely shot and nobody will buy anything they are selling ever again.  Of course, $1.7M is pretty great inducement for 3 hours of screwing your former trading partners.  All accept the challenge and immediately begin the process of self-justification.  After all, if they were clever enough to find the problem, obviously they are the fittest to survive the crisis.

Obviously the movie mirrored the Wall Street crisis that resulted in the crash of Lehman Brothers, a case of art imitating life.  But it’s an age old story.  Corporations will act in their own interest, including unethical behaviour and cheating, but only up to the point that they can self-justify or feel their actions will not be detected or cannot be punished.

Economists speak of “externalities”—the costs (or benefits) incurred by third parties who did not agree to the transaction causing the cost (or benefit). For example, if a farmer begins using a new kind of fertilizer that increases his yield but causes more damaging runoff into nearby rivers, he keeps the profit but the costs of his decision are borne by others. If a factory farm finds a faster way to fatten up cattle but thereby causes the animals to suffer more digestive problems and broken bones, it keeps the profit and the animals pay the cost. Corporations are obligated to maximize profit for shareholders, and that means looking for any and all opportunities to lower costs, including passing on costs on to others (when legal) in the form of externalities.

I am not anticorporate, I am simply a Glauconian. When corporations operate in full view of the public, with a free press that is willing and able to report on the externalities being foisted on the public, they are likely to behave well, as most corporations do. But many corporations operate with a high degree of secrecy and public invisibility.

When corporations are given the ring of Gyges, we can expect catastrophic results (for the ecosystem, the banking system, public health, etc.). I think liberals are right that a major function of government is to stand up for the public interest against corporations and their tendency to distort markets and impose externalities on others, particularly on those least able to stand up for themselves in court (such as the poor, or immigrants, or farm animals). Efficient markets require government regulation. Liberals go too far sometimes—indeed, they are often reflexively antibusiness, which is a huge mistake from a utilitarian point of view.

Haidt, Jonathan (2012-03-13). The Righteous Mind: Why Good People Are Divided by Politics and Religion (p. 298). Random House, Inc.. Kindle Edition.

This is why government regulation and media scrutiny are necessary.  Because unrestricted corporations will damage others if there is little chance of them being caught or held accountable.

Government

So, if government is our bulwark between corporate greed and the second coming of the Love Canal, should we worry that governments also subject to the same Ring of Gyges effect?  Absolutely, and for the same reasons.  When government officials can benefit at the expense of others without being caught or without consequences, they will likewise do things that are unethical at the expense of others.  And government as a whole is also prone to the same problem as corporations.  For example, if there is no accountability for a balanced budget, why would a politician balance their budget, a thankless and difficult job?

Often, politicians are easily caught in the same ethical snares as corporations, and sometimes even by entanglement with those corporations.  Campaign contributions from lobbyists create an environment in which a politician’s own interests are served by turning a blind eye to the damage done by an industry or corporation.  While we’d like to see our elected leaders as representing the people, too often they represent the interests of their backers – unless those backers and their interests are made public.  Public sentiment can be a great motivator to regulate the behaviours of politicians if they believe their actions will be disapproved and known.

Additionally, politicians will use their own entitlements and loopholes to behave in ways that benefit them at the expense of others if that is allowed by the system.

Health Care Industry

A few years ago, when my company went from a tradition HMO type of health insurance to an HSA style (with a limited flexible spending account that employees put their own money into and much higher deductibles), there was a wave of disillusionment.  For the first time, employees became aware of the actual cost of procedures.  Some health care providers were reluctant to share what the cost of procedures was or said it would depend on the insurance provider (which was code for “we charge as much as the insurance provider is willing to pay and not a penny less”).  One woman called multiple Houston-based clinics for an MRI scan and was quoted prices from $100 to $500, all for an identical procedure.

Consider this analogy:

Suppose that one day all prices are removed from all products in the supermarket. All labels too, beyond a simple description of the contents, so you can’t compare products from different companies. You just take whatever you want, as much as you want, and you bring it up to the register. The checkout clerk scans in your food insurance card and helps you fill out your itemized claim. You pay a flat fee of $10 and go home with your groceries.

A month later you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you’ll have to send in a check for an additional $15. It might sound like a bargain to get a cartload of food for $25, but you’re really paying your grocery bill every month when you fork over $2,000 for your food insurance premium. Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food . . . The cost of food insurance begins to rise as supermarkets stock only the foods that net them the highest insurance payments . . .

As the cost of food insurance rises, many people can no longer afford it. Liberals (motivated by Care) push for a new government program to buy food insurance for the poor and the elderly. But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts . . . As long as consumers are spared from taking price into account—that is, as long as someone else is always paying for your choices—things will get worse . . . Only a working market can bring supply, demand, and ingenuity together to provide health care at the lowest possible price.

Clearly, the grocery store analogy works best for wellness and prescriptions, but not quite as well for serious injuries or long-term illnesses that can far exceed our normal “grocery bill.”  Should insurance only be used for these catastrophic illnesses?

The grocery store analogy also doesn’t take into account the high costs of malpractice insurance in the US which drives the costs of routine wellness visits, prescriptions, and more serious procedures much higher than in other countries.  My own experience is that I’ve never spent anywhere near as much for a doctor visit outside the US (Singapore, Spain, Philippines, and Australia as comparisons) as inside the US for comparable services.  IOW, even if the method for insurance payments wasn’t inflating prices, our litigious culture would also keep those costs higher than other countries.  Living abroad, I’ve found that American democracy runs on lawsuits in a way that other countries do not.  People elsewhere accept that doctors will make mistakes sometimes and people won’t live pain-free and healthy forever.  And yet they are also often healthier due to lifestyle differences:  walking more places and not being obese.

Let’s talk about health care reform.

  • Should people be allowed to refuse to have health insurance?  If they do, how do we avoid free riders?  Do doctors have to allow people to die if they can’t pay? Should government (meaning the taxpayers) pay for those who are uninsured by choice?
  • Should there be a limit on how much care a person with a terminal condition can receive without being able to pay for the excessive amount personally?
  • How do we reduce the need for malpractice in the US given that voters will feel legislators are not protecting victims of negligent doctors?
  • How do we create transparency and accountability in our incredibly flawed health care system?
  • Who do you think is wearing the Ring of Gyges:  government, corporations, free riders, insurance companies, Americans in general?

Discuss.

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38 Responses to The Ring of Gyges & Health Care

  1. Stephen Marsh on June 12, 2012 at 6:08 AM

    The funny thing is that companies do this (dump bad assets on customers) all the time. One of the things I got from Liar’s Poker was just how casually the brokers used the sales/account reps to do this as a matter of course. The brokerage did not suffer any significant harm from business as usual.

    Otherwise … well, you’ve hit the “health insurance should pay for my toothpaste and birth control expenses” point.

    TAMU did some high quality statistical analysis on the litigation tax on health care — came to under 2% (around 1.2%). Far more of an accelerator was whether or not the doctor was able to capture part of the cost.

    So, now chiropractors routinely send people out for MRIs and CT scans (adding $6k to the price of chiropractic care) when before they shot x-rays (add $70.00 to the bill).

    But you’ve hit a number of excellent points.

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  2. Geoff-A on June 12, 2012 at 7:10 AM

    Most of the countries that provide universal healthcare spend around $3000 per patient per year.
    The US manages to spend $6000 without providing universal healthcare.

    Something is very wrong with the US system.

    How it could be fixed with so much paranoia about socialism I can’t imagine? You’d think the above figures would be enough, but how much are you willing to pay to not be socialist. Less service for double the price?

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  3. Stephen Marsh on June 12, 2012 at 7:15 AM

    Geoff-A — except I don’t get less service. I’m well aware of anesthesia during the delivery of babies in parts of Canada — availability is very limited. The same is true of many services in many areas.

    Which is what creates the resistance to change — the limits, not to mention, you need to compare how much doctors make in the United States.

    I had the chance to look at a medical practice where the doctors had managed to capture all the profit from all the related care. The doctors were making about $500k a month. After expenses and taxes. That is $500k a month after tax dollars.

    You can suspect that they will resist change.

    In Japan an MRI costs under a hundred dollars. Same MRI in the United States will cost $2k. Those who are drawing profit from referring, owning, etc. MRI machines will resist very stoutly changing the rules and the law.

    Wish I had an easy solution.

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  4. Mike S on June 12, 2012 at 8:20 AM

    Re: The grocery store analogy also doesn’t take into account the high costs of malpractice insurance in the US which drives the costs

    For those who think malpractice doesn’t have a large factor in this, consider the following case this week from Atlanta:

    - An Atlanta cop has chest pain. He goes to the cardiologist. The cardiologist is appropriately concerned about the man’s heart and schedules a stress test for the following week to investigate it further.

    - The day prior to the stress test, the man is involved in “strenuous” 3-way sex with two other people, neither of which is his wife. He has a heart attack and dies.

    - The widow (whose husband died while cheating on her) decides to sue the cardiologist because he didn’t appropriately warn the man about avoiding activities like strenuous 3-way sex prior to the study.

    - A lawyer actually took on this case, and a jury found the doctor guilty – 40% of the fault lay with the man cheating on his wife, and 60% of the fault lay with the doctor. The verdict – $3 million in damages the doctor had to pay for “malpractice”.

    This is a crazy country.

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  5. Mike S on June 12, 2012 at 8:24 AM

    #3 Stephen: The doctors were making about $500k a month

    I would LOVE to see that. That’s like saying ALL CEOs make $100 million a year because I knew a guy… The average physician in the US makes $200-250k per year, with student debt often in that range. The highest paid specialties tend to be surgeons, and the averages there are less than $500k per year – doing well, but certainly NOT the $500k / month you quote.

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  6. Mike S on June 12, 2012 at 8:30 AM

    #2 Geoff-A: Most of the countries that provide universal healthcare spend around $3000 per patient per year.
    The US manages to spend $6000 without providing universal healthcare.

    One place to start: obesity. If someone is complaining about the cost of health care in the US and is obese, the problem starts with you.

    I have said these numbers before on here, but consider the following:

    Obese men rack up an additional $1,152 a year in medical spending, especially for hospitalizations and prescription drugs … Obese women account for an extra $3,613 a year. … researchers found even higher costs among the uninsured: annual medical spending for an obese person was $3,271 compared with $512 for the non-obese.

    This is staggering. We could pay for ALL of the uninsured and underinsured in this country with the nearly $200 BILLION extra we spend merely because we are fat. It’s black and white.

    So, before we start pointing the finger at all of the reasons health care costs too much in the country, perhaps we (me included, I need to lose 30#) should point the finger at our waist and our plate of food and our activities.

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  7. Mike S on June 12, 2012 at 8:35 AM

    #3 Stephen: Which is what creates the resistance to change — the limits, not to mention, you need to compare how much doctors make in the United States.

    And finally, before I start seeing patients, consider one last fact: In the United States, doctors make approximately 8.4% of what is spent on healthcare. In a study a couple of weeks ago where the top 8 countries were compared, this ranked #7, with one country 0.1% below us. Contrast this with Germany, where 15% of the healthcare dollars were spent on physician reimbursement. Our healthcare is expensive, but 91.6% is NOT going to doctors.

    The problem ISN’T how much the doctors are making. I literally get paid $1 MORE now for replacing a knee than I did 12 years ago, while expenses have gone up 30-40% in that time. The problem is throughout the system. I order far more each year in tests so I don’t get sued than I actually take home. Even if I order 1-2 MRIs each week “just in case”, it surpasses my take-home.

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  8. Stephen M (Ethesis) on June 12, 2012 at 11:03 AM

    Mike S — you prove my point. A doctor who has capture makes a huge amount more than one who does not. I look at pediatric g.p.s who are making $90k a year — about on par with some specialist rns.

    Though in Europe, last time I talked with a recruiter, a specialist surgeon who worked over time would make 100k euros a year.

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  9. Jon on June 12, 2012 at 12:06 PM

    The source of the problems lies in the core problem of individuals abdicating their individual liberty (liberty defined as taking responsibility for oneself, that is your own actions).

    Government is created for the protection of individual rights (as stated in the liberally created AZ constitution and as thought of in early American history).

    So let’s see.

    Corporations are created by government to protect the individuals in said company from being sued. This is contrary to what a government is supposed to do, it also takes away liberty.

    Government is a monopoly on force/violence for the protection of individual rights. Which is contrary to individual rights since it pretends to have the right to do involuntary taxes (an individual has no right to go to his neighbor and force them to pay fees for the neighborhood security agent unless said individual has entered into an explicit contract).

    Health care industry. We must remember that insurance as we know it today started because of wage caps during FDR. Companies and individuals of course wanted to get around this and so was born non-catastrophic health insurance. There is much more to this story on how government has gone contrary to the protection of individual rights and taken away the liberty of the individual.

    Here’s an in depth article that talks about this.

    One of the big problems on health care is licensing of doctors which basically creates a cartel in the medical field and takes away the rights of the individual (of contract) and takes away the liberty of the individual to choose and take responsibility for oneself.

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  10. Stephen M (Ethesis) on June 12, 2012 at 12:07 PM

    Do you have a citation for the Atlanta cop? I would love to look the case up.

    Texas has very aggressive legislation curtailing plaintiffs rights in medical malpractice claims. We do not seem to have doctors charging less.

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  11. Jon on June 12, 2012 at 12:23 PM

    Should people be allowed to refuse to have health insurance?

    Should people have liberty?

    If they do, how do we avoid free riders?

    People that run hospitals should have the liberty to deny care to those who they don’t want to help, they should also be able to help those whom they would like to help. Giving a free market in this field would dramatically lower costs so most people wouldn’t have this problem to begin with. That is, they could either afford to pay for it themselves or get help from charitable organization for help.

    Do doctors have to allow people to die if they can’t pay?

    If we don’t then don’t we make are doctors nothing more than slaves?

    Should government (meaning the taxpayers) pay for those who are uninsured by choice?

    Should people be made slaves to one another? Or put each other in bondage? That is what you are asking.

    Should there be a limit on how much care a person with a terminal condition can receive without being able to pay for the excessive amount personally?

    See answers above.

    How do we reduce the need for malpractice in the US given that voters will feel legislators are not protecting victims of negligent doctors?

    I don’t know. I would think we would need to return the people to a mindset of liberty. In order to do that we would need to become better and more gentle parents and stop putting are children in government indoctrination camps.

    How do we create transparency and accountability in our incredibly flawed health care system?

    Free market. There is no other way. Government by its very existence isn’t transparent neither are corporations.

    Who do you think is wearing the Ring of Gyges: government, corporations, free riders, insurance companies, Americans in general?

    We all are. As the scriptures say:

    And the people shall be oppressed, every one by another, and every one by his neighbor;

    and

    Therefore, it is not right that any man should be in bondage one to another.

    We must stop judging others and instead spread the message of liberty, starting with ourselves, then our families, then our communities, then our states, then our country. But first and foremost we must raise our children in with gentleness and kindness as real people. When we do this our children will reject that premise that it is OK to have a gun in a room to force others to do our bidding.

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  12. Jon on June 12, 2012 at 12:26 PM

    Geoff-A,

    Something is very wrong with the US system.

    Yes, there is. There is something deeply wrong with other governmental health care directed systems also.

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  13. Jon on June 12, 2012 at 12:30 PM
  14. Mike S on June 12, 2012 at 1:02 PM

    #10 Stephen:

    No citation as I don’t know how to look those up, but here’s a news article about it:

    http://www.13wmaz.com/news/watercooler/article/184166/155/Cop-Dies-During-3-Way-Sex-Widow-Wins-3-Million

    Specifically note the following. What else can a doctor do? Our society is crazy.

    Here, after examining Mr. Martinez, Dr. Gangasani recommended follow-up cardiac testing, and he offered Mr. Martinez an appointment for the next day to have the testing performed. Mr. Martinez refused, and instead he scheduled the testing to take place one week later-the day after the sexual encounter that he had planned. Dr. Gangasani also specifically told Mr. Martinez not to engage in any strenuous activity, but unfortunately Mr. Martinez ignored this warning. Dr. Gangasani also gave Mr. Martinez appropriate medications, including aspirin, nitroglycerin, and cholesterol-lowering medications, and told Mr. Martinez to go to the emergency room immediately if he experienced any further chest pain. Thus, while Mr. Martinez’s death was a tragedy, it could have been prevented if he had simply followed Dr. Gangasani’s recommendations and instructions.

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  15. Bob on June 12, 2012 at 1:51 PM

    #14: Mike S.,
    If you believe most MDs are men of honor ( I do). Then they should be entitled to a jury of their peers. That is, other MDs determine if the actions were within standards. There are many ways to handle Malpractice that will not cost a lot of money.

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  16. Bob on June 12, 2012 at 2:03 PM

    #11: Jon,
    “Free market”. So what’s stopping the free market? I know of millions who use the free market. The have no insurance. If they get sick, they pay $50 and see a doctor. It’s on the desk at Kaiser Hospital.

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  17. Bonnie on June 12, 2012 at 2:09 PM

    I’m a big fan of Clayton Christensen, and he’s finally written a book that I can read in The Innovator’s Prescription. (I know he’s brilliant, but his books have previously been so laden with professorial jargon and devoid of solutions that I had to keep laying them down.) He showcases quite a few case studies of how the innovative curve occurs in parallel industries and make a pretty solid case for small companies working at the fringes and increasing their market share over time.

    For instance, stand-alone centers specializing. The center that specializes in hernia surgeries and has perfected their process to the point that they do it at a fraction of the cost with a fraction of the complications stands out in my memory.

    Kaiser Permanente gets a significant call-out, not as a perfect example but as beginning point (employers provide health care instead of contracting for insurance.) It’s been replicated in a number of venues and shows some promise, though being small-scale it has significant limitations.

    He also makes the case for an independent system of health care records so that your history is portable, and he makes the case for separating insurance from the job through local networks that provide care and insurance without involving the major companies.

    I’m totally a fan. I don’t participate in the health care system because we use natural methods that are never covered, and I’ve learned to treasure that extraordinary freedom. Nobody tells me where I can go or what I can do. It OFFENDS (wish we could do EXTREMELY BOLD TYPE IN RED) me to have someone demand that I carry health insurance and I’ll fight it to my death (and nobody needs to be telling me that the whole culture is going to be paying for my slow demise.) We have gone to doctors to fix 3 broken bones and have a dentist. When I couldn’t go to a midwife with my twins (Baby B breach) I went to the hospital under duress. That’s it in 25 years. We’re healthier than most, and I’ll admit that might be a gift from God, but it might also be because we take responsibility for our health, not just our health care.

    I’d love to see some new systems spring up. Christensen makes the case that employers will have to lead the way, but I think that small companies setting up the cooperative local networks are the real key. There will be a learning curve, but it is so much less costly and would include more people. If they still wanted to visit a specialist out of the area, they could go and simply pay it. I think divorcing patients from the cost of care was a kind thing to consider but a destructive thing to do.

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  18. Bonnie on June 12, 2012 at 2:14 PM

    Bob (15), the AMA is extraordinarily powerful at keeping their policing within the profession. They are hardly perfect however, because they are often unwilling to discipline one another until a situation has gone quite far. I know a physician who was known to be assaulting his patients and it was well-known within his community of colleagues, but everyone was loathe to call him out. They more often use their power to demonize other modalities than to police their own.

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  19. will on June 12, 2012 at 3:29 PM

    Hawk,

    Great Post, I loved the grocery store analogy.

    Margaret Thatcher put it best when speaking on this issue: “the problem with socialism (socalized medicine) is that you eventually run out of other people’s money”

    With Greece, Spain, Italy and numerous other (America Not Far Behind) european countries collapsing under the weight of these social programs, it is time to reconsider how we do business so we don’t end up in the same place. Those that push these programs do so out of compassion; however, they destroy lives when these social programs financially collapse. I read an article the other day that those who have retired in Greece are accepting (not-willingly) a 50 percent cut in benefits and pay – 50 percent.

    HSA’S are the answer for medical costs as they force the individual to shop for a better price. They are to shared medical costs what 401 K’s are to pensions or social security. They bring individual contribution and individual responsibility back into the equation – the only system that will work.

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  20. Bob on June 12, 2012 at 4:45 PM

    #19: Will,
    “…in Greece are accepting (not-willingly) a 50 percent cut in benefits and pay – 50 percent”. Isn’t this what you want_ a Free Market?
    Pensions and social security work__401Ks don’t. I have all three.

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  21. Jon on June 12, 2012 at 5:33 PM

    Bob,

    FYI, 401ks are not free market. Neither is forcing people to pay for government foibles. Neither are HSAs. I have an HSA, the government changed the rules on me. I used to be able to buy over-the-counter medicine with it, not anymore.

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  22. Jon on June 12, 2012 at 6:23 PM

    @Bonnie,

    Yeah, we don’t really use the medical system either. We try to stay healthy, mainly through a good diet. My two kids have never had more than a cold (4 and 2 yrs old). Opting out is a great way to fight against statism. As the French Judge Étienne de La Boétie postulated.

    So really, it won’t matter to us too much what the government does. Yes, it will make me and my kids less free, but hopefully it won’t hurt our health.

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  23. Mike S on June 12, 2012 at 7:33 PM

    I certainly respect everyone’s attempts to maintain great health through healthy diet and living. I wish all of my patients would do the same, as it would certainly eliminate a lot of suffering and problem.

    However, the sad reality is that 1% of the US population accounts for 30% of the healthcare expenses. People have accidents. People get cancer. People get old and break hips and get dementia. Babies are born prematurely. Children have developmental problems. These things cost money – real and actual money – and no one knows when their turn will come to need something that is REALLY expensive.

    Regardless of the funding mechanism – private insurance, governmental programs, charity, etc. – there is NO WAY that the people actually getting medical care can pay for it. A bout with cancer can cost $150k. A knee replacement costs $30k. A premature baby can cost $300k. An accident with an ICU stay can cost $250k.

    The only way that “sick/injured/cancer/etc” people can get the care they need is for healthy people to pay into the system when they don’t need the care. Period.

    So, for everyone not paying into the medical system now because they “don’t need it”, I would hope you stick to your principles when you have a premature baby (and just let him/her die), or your wife gets breast cancer (and just let her die), or you get in a major accident with your family (and you need a $10,000 helicopter flight and a $100,000 hospital stay), or whatever. I hope you refuse the care that will be paid for by other people who don’t actually need medical care that year, yet are still paying into the system through insurance premiums or taxes.

    But I predict that your tune will change. You will want your baby to live. You will want your wife’s cancer treated so she can see her children grow old. You will want the team of trauma surgeons and orthopedic surgeons and ICU nurses and therapists and everyone to descend on you to save your life. You will be perfectly willing to spend someone else’s money on your care.

    Sorry. End of soapbox.

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  24. Jon on June 12, 2012 at 7:52 PM

    @Mike S,

    For the record, I do pay into the health care system with a high deductible plan (like insurance should be). If one is responsible for oneself then that is a prerequisite. I know not everyone can do that. So I also give charitable funds (currently through fast offerings, I give to other things too, but not medically related). So, yes, I put my foot where my mouth is (is that the saying I’m looking for?).

    Also, I don’t judge people who choose to use the government medical system. I use the roads, who am I to judge someone that uses the medical system? All I’m saying is that we need to recognize what freedom and liberty are and then choose our fight and try to lessen the governmental oppressive system. Each one of us knows individual what fights they can handle and must choose accordingly. I also know that the costs you talk about are much higher because of government force and so people that wouldn’t normally use force to get what they want must use governmental force. It isn’t a black and white world. The principles are, the interim isn’t. The solution is the ideal, it is just convincing enough people of that and all of us acting accordingly that will get us there.

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  25. Bonnie on June 12, 2012 at 8:37 PM

    Mike, don’t hold back, tell us how you really feel.

    Of course you’re right, we can’t just take our toys and go home. I refuse to accept, however, that I must pay into a bloated and inefficient system just to guarantee that someone’s baby doesn’t die. I understand subsidizing people’s accidents or unforeseeables, and I understand subsidizing people’s unwillingness to manage their own lives. By I don’t understand subsidizing insurance company executives.

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  26. Jon on June 12, 2012 at 9:02 PM

    An interesting fact. Education cost in the 1800s became as low a $52 per year adjusted to 2010 money with a student-teacher ratio as low as 2. Of course, to do this, it took some ingenuity. The competition didn’t like this so of course they used government to protect their industry (through licensing and regulations). So, imagine how much more expensive medicine and surgery is today. Imagine how much innovation we are missing out on.

    Here’s the source:
    http://www.k12academics.com/education-reform/educational-economies-1800s

    @Bonnie,

    I refuse to accept that anyone has the right to hold a gun to my head and steal my money. I might give it to them willingly of my own accord, but once people try and steal it from me that is an entirely different matter.

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  27. Geoff-A on June 13, 2012 at 7:34 AM

    Jon and Bonnie, This idea that the government is stealing your money when you pay tax is particularly American and seems strange coming from a country that claims to be a great democracy.

    To put a contrary position; I believe that Governments are there to help those who struggle to help themselves, and to provide services for the general public. If governments do things well they are more efficient because there are not a number of people taking a profit along the way. If for example Government owned the hospitals and employed the doctors as contractors there are no insurance companies making a profit. The fact that my government supplied universal health care costs half the cost of your free enterprise system speaks volumes.

    Our equivalent of the FDA requires the drug companies to show a benifit to a new drug both treatment and cost before it can be released and they then negotiate a discounted bulk price for its supply, and even then if its on the pharmcutical benifits list I pay $5 for a perscription.

    It does seem to depend on your culture what services you want goverments to provide. Roads, Schools, healthcare, support for the needy, retirement and single parent pensions, and regulation of business, would seem to me to be minimum for a civilised society.

    Freedom is a strange concept to bring into healthcare. My experience is that not having to worry about the availability of healthcare(because its provided like education) is very liberating.

    In your messages there seems to be a fear or contempt for governments and big business. I believe my government is trying to make life as good as possible for me. Do I have less fear, and more freedom because of that? I believe so.

    We discussed the Pride cycle in SS and concluded that the reason for the downfall of society was that they refused to care for the poor(pride). I hear some of that in this talk of government stealing from productive people to help those in need.

    I obviously see the world very differently from some of you, but am I more or less free or at peace? I hear a lot of angst which doesn’t sound like freedom. I recommend socialised medicine (not insurance) to sooth your souls on the medical front.

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  28. Bonnie on June 13, 2012 at 8:59 AM

    Ah, Geoff-A, you took the off-ramp on my comment. Only one paragraph had anything to do with my personal choices. I’m a huge fan of innovation.

    My personal opinion is that I don’t want anything to do with the medical establishment because I’ve been demonized by it for too long. It may now be cool to go to an acupuncturist, but 25 years ago it wasn’t, and I had to pay a lot for my care because local doctors were trying so hard to run my chosen practitioners out of business. Every choice I’ve made has been expensive and labelled me a fighter outside the system. So yeah, not so many warm fuzzies about doctors. Shoot me.

    We can have a separate discussion about the relative merits of free enterprise health care and socialized health care and we’ll both score points and have to hang our head occasionally. They are interesting systems with morally superior aspects and morally egregious aspects. I think innovation holds the best future and am excited by the efforts to try new things that are cropping up worldwide.

    Either way, unfortunately, I don’t have time to pursue the debate.

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  29. Jon on June 13, 2012 at 9:00 AM

    @Geoff-A,

    The libertarian tradition has deep root in America. If you would like to read a book that goes over this history I would recommend “Conceived in Liberty” a four volume set by Murray Rothbard, which can be downloaded for free at mises.org.

    If you read through the scriptures you can also see a libertarian bent (although you can see a communitarian(?) bent also, though not socialism as we know it today).

    Like Jesus focuses on the individual to help others. In the Book of Mormon you also see this, especially in the Book of Mosiah. Like Alma:

    And thus they should impart of their substance of their own free will and good desires towards God

    In the Book of Mosiah you read about how the people weren’t taxed by King Benjamin and Mosiah and how they lived God’s law (which is natural law). The last chapter really goes into this. It is interesting how the people are much more socially tolerant than the current church today (Alma asks King Mosiah what he should do about some sinners in and out of the church, the response, government doesn’t inter-meddle in the affairs of the people if no one is harming one another).

    The idea behind taxation being theft comes from a couple of different sources. First, we own our own bodies and the labor we mix our efforts with (see Murray Rothbard’s “The Ethics of Liberty”), which means we can own property. Second, President Benson (I believe) talked about how the government can’t do that which the individual can’t delegate to it. I can’t go to my neighbor, hold a gun to his head and tell him that I want his money to help the “greater good.” So neither can the government, which the government does by taxation.

    I have no problem with governments as long as they hold to natural law (God’s law).

    You do have a point that socialized medicine is probably more efficient than the current US system which is more fascistic or mercantilistic in nature. It is not a free market and is not a capitalist system (many people confuse those points). But assuming that socialized medicine is better than the free market is incorrect because one looks at the seen but not the unseen. There are many problems with socialized medicine that I won’t go into here.

    A great book on why we shouldn’t advocate for violence as a means to an end (which you are doing) is “Healing Our World in an Age of Aggression” by Dr. Mary J. Ruwart, where she goes into pain staking detail on the ills of violence and how the way of Christ (she doesn’t say Christ but I will) is truly better, it is better to use love and persuasion in all facets of our lives and violence doesn’t pay off in the long run.

    Freedom is a strange concept to bring into healthcare. My experience is that not having to worry about the availability of healthcare(because its provided like education) is very liberating.

    The Mormon Stories podcast on the “Sons of Perdition” interview illustrates how what you see as freedom really isn’t. What it is is a desire to be cared for and never fly on your own. I read a story of how a man left communist Russia to Finland and how, after a short period he had to go back to Russia because he had too many choices. Freedom gives us more choice, not less. Socialism takes away our choices and puts it in the hands of bureaucrats. There is also quite a bit of waste in the process.

    In your messages there seems to be a fear or contempt for governments and big business. I believe my government is trying to make life as good as possible for me. Do I have less fear, and more freedom because of that? I believe so.

    Again, this is the difference of the seen vs the unseen. You see the current results but don’t see what would happen without the coercion and how life would truly be better without the violence.

    We discussed the Pride cycle in SS and concluded that the reason for the downfall of society was that they refused to care for the poor(pride). I hear some of that in this talk of government stealing from productive people to help those in need.

    Yes, that is correct about the pride cycle. We must care for the poor. But we must also remember, that taking away the choice of the individual and “giving” to others isn’t charity but violence and is illustrated between the dichotomy of Christ’s way and Lucifer’s. It is not prideful to say that government is stealing, it is factual and applies principles universally (thou shalt not steal).

    I obviously see the world very differently from some of you, but am I more or less free or at peace? I hear a lot of angst which doesn’t sound like freedom. I recommend socialised medicine (not insurance) to sooth your souls on the medical front.

    I am at peace also, but that doesn’t mean that I will stop advocating for a more peaceful and prosperous world. I have internal peace but that doesn’t stop me from advocating no more war. Neither did it stop Christ from advocating a more peaceful world, even as he turned over the money changers tables.

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  30. Julia on June 13, 2012 at 9:52 AM

    I have worked for an insurance company that administers employer healthcare, Medicare, our state funded “Medicaid” program and individual insurance plans.

    One of the counties we serviced made a deal with our company to administer the Medicaid program in their county in an innovative way. They had gotten the three major hospital systems to agree to a 10% cut in reimbursement in exchange for the county extending Medicaid coverage to every person in the county that was qualified, as determined by income, family size and whether they were already insured.

    Most counties in our state have waiting lists that are almost as large as their enrollment, so this almost doubled the number of people on their insurance rolls. The requirements for being added was that you had to have a complete physical during the first 30 days of enrollment. If at that visit the doctor diagnosed you with a chronic condition, it was required that you see you primary care doctor every 3 months to stay enrolled in the program. All of the members who had been previously enrolled were phased into the “primary care requirements” over the next 6 months.

    Originally the county thought that it’s initial costs would increase by 40-60% and had grants and private funding to cover most of those costs. During the year that the program ran, the cost for covering almost twice the number of people, was 10% more than their cost compared to the previous year. The hospitals all ended up having a 65% decrease in costs for uninsured patients who were unable to pay for their care.

    It was truly frustrating that when the county was audited by the federal government. They were told to STOP the program since it followed state laws, but didn’t follow all of the Federal Medicaid program guidelines. They had been given a one year exemption, but because the plan covered birth control regardless of age, and abortions were covered without oversight beyond the primary care or OBGYN, the Bush administration closed down the program and didn’t renew their status.

    Now, this was a fairly small county, at least in population, and they couldn’t have tried it out if all of the hospitals hadn’t willingly participate. With that said, the heartache of sending out 3,000 letters, letting those people know that the program was ending and they would be sent back to the waiting list, was hard on so many levels.

    That county only made up 3% of our business, but the excitement about the program and how well it was going made us hope for a better model that could be a model at least for smaller communities and counties. The frustration in our company, the members being cut off from health coverage, and the healthcare providers who had been part of the program was crushing.

    I have always thought some form of intelligent, creative universal healthcare is what this country needed. After that experience it seems even more important to me.

    I am lucky that I have always had private health insurance, and have lived in states with strong insurance laws. Without that insurance, we would have had to declare bankruptcy many times over. Our family didn’t choose to have several members with long term chronic medical issues.

    We have always made sure that the first bills we pay are tithing, rent and our insurance premiums, even when unemployment has meant our insurance premiums were all coming out of pocket. Our family has reached our out-of-pocket maximum every year for the last ten years. We feel blessed to have always been able to scrape together the premiums, and have set up payment plans to cover the maximum out of pocket costs that go with it.

    I know a lot of other families that have similar health care struggles, without insurance, who aren’t insurancable in the private health care market. They would be happy to pay the health care premiums that our family does, but they work for employers that can’t or don’t provide health coverage. I know they can’t wait to buy coverage in the new exchanges.

    I see this less as a freedom issue and more of an issue of taking care of the poor and those who don’t have the same economic opportunities that I have.

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  31. FireTag on June 13, 2012 at 4:44 PM

    Geoff-A:

    I’m glad your government is noble and wise.

    Europe’s MIGHT still be noble, but its lack of wisdom under a ring-of-gyges scenario becomes more apparent, literally, by the hour (Did Cyprus end up having to ask for a bail-out this morning or not; or did they just not report it because the teetering of Spain and Italy took up all the air time?)

    The American election is boiling down to the issue of whether government is still for the benefit of the governed or for the benefit of the governing — and those two groups are definitely becoming de-coupled.

    That’s why the birthplace of unionism in the US, Wisconsin, just defeated an all-out public employee union blitz against a governor who reined in their right to force employees to join their union. On the same day, two of the largest 10 cities in the United States — both in progressive California — voted overwhelmingly to rein in existing pension plans for their public employees.

    There is no point in debating whether the costs of government are worthwhile once the costs of government become unsustainable. That which can not continue WILL stop.

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  32. Jon on June 13, 2012 at 5:06 PM

    @FireTag,

    Isn’t that the core problem. Once the people start voting themselves others money (read envy and theft) the eventual result has always been bankruptcy or devaluation of the wealth of the nation. We’ve seen defaults at least twice in the US, the first time was with FDR and the devaluation of the dollar compared to gold, the second time was when we got off the gold standard, and now the Fed just prints at will. In the end it is just a tax on the people.

    People don’t really change that much so history ends up mimicking itself.

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  33. Geoff-A on June 13, 2012 at 5:32 PM

    Jon at 29. You have a very different view of your relationship to your government. I believe that they are there to provide services and redistribute wealth so the poor can be cared for. The voluntary system is very noble but only works on a local level, there needs to be a bigger system to care for all the poor and governments are well placed to do this. Taxation is not violence, it is the way we pay for the services our government provides. But I can see that you vehemently believe you view and I am not likely to succeed in pointing out anything to you.
    How can a democracy operate except that you accept, and respect, the government the majority elect?

    Fire Tag, are the problems in Europe as a result of their caring for their people. If, as I said earlier, government supplied healthcare costs half the US system, which is more likely to bankrupt a country?

    At least some of the problems are because they were sold American junk bonds which then became worthless.

    Should I assume that Obama is the caring for the people leader? I believe your government would like to be as good as mine in caring for it’s people but is hampered by being accused of violence when it tries.

    All is not rosy here either, we have an adverserial system of government with a permanent opposition party. The opposition Treasurer has just delivered a speech called “THE AGE OF ENTITLEMENT IS OVER” to an overseas forum, where he uses Korea and Hong Kong as ideals we should follow to smaller government which provides minimal services to its people in the intrest of reducing tax for wealthy and business, and reducing soverign debt. Our soverign debt is already about 5% which is lower than either of the asian countries.

    So it looks like our next election will be about the same issue, except there has been no publicity about the oppositions ideals in any specific way. All they do is undermine the government.

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  34. Bob on June 13, 2012 at 6:03 PM

    The Government will do just fine. It hasn’t even come near to cutting what it can,(Defense, etc.). It hasn’t come near picking up the money flowing freely in America, (Tax the rich). It can then hire as many people it wants and create jobs__(it’s clear the rich are not going to do it).
    Freedom as many would like ?__nope. But the bills will get paid.

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  35. el oso on June 13, 2012 at 8:21 PM

    Who has the ring of Gyges?

    Government? A few politicians are really milking the issues, but most are somewhat vexed by the huge rise in Medicare and overall healthcare costs.
    Corporations? A few, especially in the healthcare industry.
    Free riders? Not much, but the more responsible citizens surrounded by many free riders are getting the short end of the stick.
    Insurance companies? Many.
    Individuals? Not very many.
    Doctors and other healthcare providers at the top? Many.

    Some notes on various topics:

    I spoke with a local attorney about this issue at some length recently. I know that the legal climate in each state has a big impact on healthcare, having moved all over the country and lived near state borders. The local attorney said that the doctor’s insurance company charges huge premiums but almost never gets a lawsuit in court and looses a small fraction of the time. It sounds like the malpractice insurance is overpriced here.
    I endorse most of what Bonnie has said, especially the free market principles of choosing your own health care. I have negotiated better rates from outside care providers for certain issues and just received hassles from my insurance company. They, and my employer who contracts with them, are unbelievably stupid in these cases.

    Mike S.
    “People have accidents. People get cancer. People get old and break hips and get dementia. Babies are born prematurely. Children have developmental problems.”
    All of these problems are partially under the control of each individual or parent. There would be a huge decrease in medical expenses if people took more care of themselves and their family.

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  36. Jon on June 13, 2012 at 9:42 PM

    Geoff-A,

    How can we operate a democracy except that you accept natural law? It won’t work if the people don’t accept it. What’s Mosiah say? Except that the king [or people] is always righteous kings [or democracies] would be great?

    Taxation is not violence…

    This is pretty much the equivalent of what’s called the Stockholm syndrome. Quite fascinating indeed. Most people have it when it comes to government. No one sees the gun in the room for some reason. A great series that goes into depth on the psychological aspects is called the Bomb in the Brain, I believe it is a 5 part series on youtube (available in mp3 format also).

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  37. Stephen Marsh on June 13, 2012 at 9:53 PM

    el oso — malpractice rates are heavily affected by interest rates and rate of return on money. A claim is usually delayed by five years or so from the date of premium payment to the date of paying the claim. When rate of return is at 20%, the insurance premium is about half of what it is when rates of return are 1-3%.

    In some states, it is a dying area of legal practice (e.g. Texas). Others, it differs.

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  38. FireTag on June 13, 2012 at 10:48 PM

    Geoff:

    What a country’s government chooses to spend on is very much cultural. I find it absolutely barbaric that Europe never put in place bank deposit insurance. We learned from the great depression; in the US, banks may collapse, but only because institutional accounts leave. Individuals have their first $250,000 in any bank insured by the Federal government. We routinely have had banks fail in a NORMAL year, and the average wage earner hardly notices. Europe is already having bank “jogs” and the problem is to keep them from turning into bank runs.

    But please spare me the nobility of government in the US; the idealists have been infiltrated by wolves in sheep’s clothing. The Chicago political machine, as a particularly relevant current example, was in full partnership with the Capone mob when my PARENTS were growing up before WW2. When John F. Kennedy was president, he dared not even skip a fundraiser to benefit the machine in Chicago even during the height of the Cuban Missile Crisis. Since then the machine has only grown to more fully divide the spoils among business leaders, union bosses, VIOLENT radicals, and revolutionaries given voice in academia. The thuggery of the Capone era is seldom needed in a more sophisticated age, but Chicago and Illinois politicians still regularly go directly from office into prison when their usefulness to the machine is ended.

    It is not genuine concern for the poor that propels people to promise things they have no intention of personally ever having to deliver — and know it. You can tell when the jig is up and they throw the very people they were claiming to be helping under the bus to try to save themselves.

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