I only hope he decides to support universal healthcare. So far he has been the most intransigent of the Democratic hopefuls on that subject. Paul Krugman has mentioned this HERE and HERE for example.
Doug!!! OMG! I actually disagree with you (and in this rare instance, Krugman).
But then, I ain’t no expert, so I’m willing to have my reasoning consigned to the burning hell of upside down and flayed fallacies.
It may be best to split Universal Healthcare off into its own topic…
In my not-so-humble opinion, universal healthcare in every form currently and seriously proposed by the candidates is a disastrous train-wreck of a calamitous idea.
Here is a list of some of the basic problems with a government-pays approach:
1) In free market, the quality of goods and services tends to correlate inversely with price. The more healthcare moves toward “free”, the more its quality tends toward “abysmal”.
2) There is no such thing as “free”. The expertise, research, administration, and training require huge amounts of time and material - which equates to money. That money must come from somewhere…
3) Current projections of national health-care costs are based on *current* utilization of the health-care system. This neglects that under guaranteed and heavily subsidized healthcare, demands for services will vastly increase - with concomitant increases in costs and demands for facilities and expertise.
4) Points two and three together imply the collective economic cost of universal healthcare will be enormous.
5) The American government is in an absolutely unique position to be able to finance public (e.g. government) services with public debt. Largely, this is because the international monetary unit is the American dollar. The implication is that it is “easy” for the American government yield to the temptation to use debt financing. It is thus not unreasonable to suspect that a tremendous public cost will be covered by tremendous government borrowing.
6) The “free-rider” problem, otherwise known as the “tragedy of the commons” connotes a context in which those who don’t pay for a good or service benefit from it. The temptation under a gauranteed system is for everybody to minimize their cost and maximize their benefit by becoming a free rider (as Krugman points out).
7) Any scheme that has the government paying direct subsidies to garauntee healthcare encourages both consumers and providers to milk the cash cow of the public teet until said cow dies of dehydration.
Them there points are the ones I can think of off the top of my knoggen. Here are some alternatives:
A) Use a market-based “credits” system, much like fishing credits sold to fishermen, or the CO2-credits associated with Kyoto. Such market-based systems have historically proved to be the single most effective means for government to regulate and manage a scare commodity. These credits could be exchanged (bought/sold/traded) between and among both providers and consumers of healthcare. Let’s say for example every citizen got a fixed number of credits for doctors visits (say 5), clinic visits (say 15), ER visits (say, 1) and hospital stays (say .5) per year. These credits would be issued by insurance companies first, then by the government to “fill in coverage gaps”. Perhaps this could vary based on age and base income. In any case, those who didn’t use all their credits could sell them to those who needed them, whether that’s a hospital, or a patient. This selling would of course occur via a mediating market or broker. The insurance companies and government would then be responsible for paying on the credits once they’re “cashed in” for actual care. This also provides a means for consumers to recoup some of the “insurance” costs they did not end up needing.
B) This doesn’t take into account the different costs of services (e.g. different emergency-room visits for different ailments don’t incurr the same cost). This is where evidence-based medicine becomes important. With automated HIT systems, it is becoming possible to track treatment plan effectiveness across a huge set of data/occurrences. One thing the government CAN do better than anybody else is to provide a data clearinghouse and analysis service charged with measuring the effectiveness, including cost-effectiveness, of different courses of treatment and diagnosis. This should allow for a determination of “average reasonable costs” without the low-cost bias introduced by HMOs and insurance companies. It is these average costs (which must at first be estimated rather than calculated) that will be paid out for the credits mentioned above.
This is just the skeleton of an idea, but my basic point are thus:
I) A market-based system is far better at ensuring quality of service, continued innovation and effective treatment than is a government-funded one. As a nation moves more toward the government-funded end, there is a corresponding decrease in quality, research and effectiveness of healthcare. This, I believe, was Giuliani’s point.
II) Allowing poor people access to the market, and providing them help in cases of emergency is what a not-for-profit government can do better than a for-profit insurance company. But if the government gives all services to all comers, we’re back at the first problem. This, I believe, is the trap most Democratic plans are leading us toward.
For the record (not that it’s germain), I’m far more sympathetic overall to the Democratic political platform.