August 1, 2009

I like Jon Alter

Alter: Our Heath-Care System Is Just Fine As Is! | Newsweek Voices - Jonathan Alter |
And how could the supporters of these reform bills believe in anything as stupid as a "public option"? Do they really believe that the health-insurance cartel deserves a little competition to keep them honest? Back in the day, they had a word for competition. A bad word. They called it capitalism. FedEx versus the U.S. Postal Service, CNN versus PBS—just because it's government-backed doesn't mean you can't compete against it. If they believed in capitalism, the insurance companies would join the fray and compete.

I really do love how many people love competition in the market place until they absolutely do not. If government plans are so bad, then how bad would that make the private companies that can't compete with them?

Ultimately, as I told a friend in email, I am stunned that we seem to still be allowing the people who don't think we need healthcare reform to dictate healthcare reform policy. As I suggested to him, it seems analogous to allowing those who think that humans have made no contribution to climate change decide how we respond to climate change.


LB said...


First I'll admit, I didn't read the whole article, just the quote you posted. But his examples are really bad.

Legally no one is allowed to compete against USPS directly. Hence FedEx does not offer the same services USPS does, though they are similar. That is why a regular letter has to, unless it is over-nighted, be delivered by USPS. FedEx offers a service that USPS does not offer. So they are not true competitors.

CNN versus PBS is even worse. CNN is a 24 hour news network. PBS has a few news shows with children's TV, and lots of do-it-yourself shows with a variety of focuses. Those two are only very seldomly competing for the same audience.

As for healthcare and competition, I'm not sure the market as it stands now really is competitive. Because most health insurance is tied to a job and is not portable, I don't think that there is true competition in health care industry. So I agree we need reform and to generate competition.

I don't think that's done through the creation of a public option. I know you'll disagree with me when I use this word, but I think the industry needs to be deregulated so that individuals can customize their plans for their needs and buy it for themselves either with the same tax breaks that employers do, or remove tax breaks on health care altogether.

This is not a great analogy, but its the best I can think of at the moment: the auto insurance industry, to my knowledge, has very little regulation from the federal government. While everyone is required to buy some minimum amount of coverage, varying from state to state, the policies at each company are generally customizable. Plus there are various factions that have developed: Large groups available to everyone like Geico and Progressive, bargain basement groups like Safe Auto, and niche groups like USAA or AARP. Within those possibilities, most people can find a policy that works for them.

I'd like to see health insurance companies truly compete to where they have to aggressively advertise for business the way Geico, State Farm, etc. do. that would be true competition, which I don't think exists now, and simply adding a public option will not create that competition either.

steves said...

I will admit that I am worried about how little people in Congress seem to understand the issues related to Health Care reform. I have seen moderate Republicans and Democrats say "slow down" and that they need more time to craft viable solutions.

Streak said...

LB, I will completely agree with you on the CNN/PBS example, and even to a degree on the USPS one. The CNN one was a throwaway, I think, and part of his hyperbole.

I see your point about auto insurance, and agree to a point. But that point is that auto insurance is, while required, relatively accessible and affordable. I am not sure that model would work for healthcare, though I would be very happy if it did. I think the costs in healthcare make that a lot more difficult. But I agree with you that the competition is really lacking as it is.

I have argued for some reform from a similar point, btw, in that freeing people from their employee connection to healthcare would allow much more fluidity in the labor market, and, it seems to me, allow for a lot more innovation and entrepreneurship. You want to start your own company? No problem. Doing so won't be easy, but at least you will have access to healthcare while you are doing it.

His other point that I like very much, however, is the idea of our healthcare right now being not nearly as good as we think it is. For those of us who have it, I mean, in that they are not going to cover a catastrophic illness.

As you suspected, I am not convinced that further deregulation is the key here, as insurers right now refuse to cover pre-existing conditions and have admitted to the practice of recission--or cutting people off from their care for the most minor of offenses, even if they are deathly ill.

As you know, I am simply not convinced that the market can figure this one out. But I completely see your points and think there is certainly reasoned room for disagreement on things like the public issue.

Monk-in-Training said...

You know, a century and a half ago, firefighting in the USA was socialized. I don't hear calls to re-privatize firefighting.

I apologize for the length of the below, but they are two great quotes, one from Steve Benen of the Washington Monthly

"major U.S. cities had for-private enterprises competing for firefighting dollars. The first business to get to the scene and put out the fire got paid. As one might imagine, this led to systemic corruption and an ineffective system, and by the mid-19th century municipalities switched to a government-run, government-trained, publicly-financed system, which, not coincidentally, works very well."

And From Tina Dupuy of the Huffington Post.

"Firefighting used to be a private for-profit industry. In the 1800's, the early days of urbanization, in cities like New York and Baltimore, there were private "clubs" or "gangs" who were in charge of putting out fires. The infamous Boss Tweed started his illustrious political career at a volunteer fire company. The way it functioned was the first club at the scene got money from the insurance company. So, they had an incentive to get there fast. They also had an incentive to sabotage competition. They also often ended up getting in fights over territory and many times buildings would burn down before the issue was resolved. They were glorified looters. It was corrupt, bloated and expensive -- but at least it wasn't the much maligned "government controlled.""

steves said...

Tennessee attempted to privatize their community mental health system and it was a disaster. There was systemic abuse and denial of services. Some firms, realizing they weren't going to make the profits they thought they would, breached their contracts and forced the state to go back to a public system.

Streak said...

Yeah, and that is my issue with health insurance. I don't think that should be driven by the profit motive. Doesn't mean that we remove the profit motive from all of health related industry, but providing health insurance and deciding care should not be dictated by profit--imo.