Market Failure in Health Care

Primary Care

Our libertarian comrades always remind us that the market always produces the right outcomes. But in Massachusetts, the first state with Universal Health Care, the market is not producing enough primary care physicians.

Studies show that the number of medical school graduates in the United States entering family medicine training programs, or residencies, has dropped by 50 percent since 1997. …the Medicare reimbursement for a half-hour primary care visit in Boston is $103.42; for a colonoscopy requiring roughly the same time, a gastroenterologist would receive $449.44.

Why be a family physician if the market pays you four times as much to be a specialist.

This entry was posted in Business, Economics and tagged , . Bookmark the permalink.

0 Responses to Market Failure in Health Care

  1. Harry Pottash says:

    I’m a pretty staunch libertarian, and I think that we will probably see other inherent problems with this system in the upcoming years, but what is being described in the article is _not_ a failure of socialized medicine. A careful reading reveals that the problem is a sudden increase in the number who can visit a GP. The market will, of course, need a little bit of time to adjust to a sudden increase in demand, something that is always the case. Were this medical system not socialized, but to have a similar sudden increase in demand, there would be the same number of people delayed or turned away, but rather than occurring through blind chance and scheduling, it would just be the poor.

    The real question is, will new doctors flow into place as fast as they would have in an unsocialized system. It seems to me that the answer to this question is inevitably yes, since it was previously an mostly free market system in a state of stability, and demand was lower.

    I would say that the problems described in this article are symptoms of the medical situation getting better, not worse. On the other hand its difficult to measure if it was worth the overall cost to the state as well, something that is not addressed in the article at all.

  2. Morgan Warstler says:

    Um… good lord. The strain is being caused by Universal Healthcare – which is the aberration, the market is just fine. How can you blame the market for some evil spawn born of the state?

    Primary care needs to be self serve, readi-clinic style at drugstores staffed only with a practitioner nurse.

    Limits to the value of life, needs to be placed on mal-practice cases.

    Get rid of Universal Healthcare, make those two changes, and see what happens to costs of insurance and healthcare. You’ll cover most everyone.

  3. Pete Wolf says:

    This is the standard free market argument tactic: if something is wrong its because the market isn’t free enough. You don’t explain why it is that this specific government intervention produces this specific problem, you simply infer that if there is a problem there MUST be an external cause (i.e., interference) and so whatever intervention you can find must be the cause of the problem.

    As an aside, if this self-service readi-clinic style system you advocate is the most efficient solution to the problem, why hasn’t the market already implemented it itself? Personally I think it’s a bloody ghastly idea that would result in a great deal of misdiagnosis and totally screw up care for chronic conditions, but regardless, what intervention into the market are YOU allowed to do to implement your ideas?

  4. Patrick Freeman says:

    I agree with Mr. Wolf. Historically, the “market” has gone wherever there is a nickel to be made. Why not into the drugstore health care racket? I’m not aware of any regulatory prohibitions. The spread of the doc-in-a-box clinics has taken care of some of the market, and probably proves there is business to be done. In any case, I see little reason to expect significant cost savings by visiting a drugstore as opposed to an emergency room. Whoever provides the service is going to expect payment, either via insurance or by cash. If you have neither, then where else can you go but to the old tried-and-true emergency room in the community hospital?

  5. Morgan Warstler says:


    There wasn’t a shortage, then there was. The article said (and it is the truth) it was government policy that caused it. Deal.

    Redi-clinics rock. They are coming up everywhere. Go read. It’ll help.

    Patrick, you are also wrong, the cost savings are immense. Go read.

    The US has the finest healthcare system in the world. You endanger many lives when you imagine things without research. Michael Moore isn’t enough to live your life by.

    “Over the last five weeks, Senator Hillary Rodham Clinton of New York has featured in her campaign stump speeches the story of a health care horror: an uninsured pregnant woman who lost her baby and died herself after being denied care by an Ohio hospital because she could not come up with a $100 fee.

    The woman, Trina Bachtel, did die last August, two weeks after her baby boy was stillborn at O’Bleness Memorial Hospital in Athens, Ohio. But hospital administrators said Friday that Ms. Bachtel was under the care of an obstetrics practice affiliated with the hospital, that she was never refused treatment and that she was, in fact, insured.”

  6. Rachel says:

    Morgan, speaking as someone from a country that does enjoy socialised health care, but who spends a lot of time in the US, I can tell you that “Redi-clinics” do not rock. Far from it. By comparison with standards of care in other western nations such as the UK, Germany, Australia, Canada and France they fail dismally in standards of service and quality, but they’re good for their owners in terms of profitability. But I agree that in many ways they are less worse than the alternatives currently on offer in the United States.

    The shortage of primary care physicians is, as Harry indicated, probably partially related to the increase in demand. But it’s also part of a worldwide trend. The increased corporatisation of primary care clinics in countries with socialised systems means that the days of the General Practitioner as a partner in a small practice are gone – they are much more likely these days to be employees of large corporates. Thus far corporatisation hasn’t led to improvements in service or reduction in costs to patients – quite the reverse. But it’s led to a significant decrease in the reported satisfaction of General Practitioners (Primary Care Physicians to you). In consequence, many are leaving the system altogether, and taking up work in other fields.

    While it would be anathema to Morgan, one possible solution to this problem would be to limit the number of clinics any one corporation could own. This would encourage small business management of the practice, which, while being slightly more expensive, would encourage retention of self-employed practitioners.

    Now, pardon me while I gag on Morgan’s “finest Healthcare system in the world” line. Morgan, you need to travel more. A lot more. Great medical research is conducted in countries with socialised medicine – look at the number of Nobel Prizes in medicine that go to non-American researchers. The research is generally a function of the health of the University sector – it has little to do with who the hospital is run by.

  7. Rachel says:

    Gak – please pardon my feeble attempt to italicise “slightly”.

  8. Morgan Warstler says:


    “The 2003 European heat wave was one of the hottest summers on record in Europe. The heat wave led to health crises in several countries and combined with drought to create a crop shortfall in Southern Europe. 35,000 people were killed in the heat wave.”

    “That shortcomings of the nation’s health system could allow such a death toll is a matter of controversy in France. The administration of President Jacques Chirac and Prime Minister Jean-Pierre Raffarin laid the blame on
    the 35-hour workweek, which affected the amount of time doctors could work;
    family practitioners vacationing in August (Many companies traditionally closed in August, so people had no choice about when to vacation. Family doctors were still in the habit of vacationing at the same time);
    families who had left their elderly behind without caring for them;”

    I mean no offense by this Rachel, but your system allowed 35,000 DEAD because of a heat wave! When our government failed in Katrina it was only 1800 dead.

    There is nothing you can say, 35K dead = your system sucks.

    A friend of mine in the media like to say, American’s don’t even know about these absolute stories of incompetence, because it appears we would be picking on you. And I don’t mean to here, but how else can I say, “THIRTY FIVE THOUSAND DEAD IN A HEAT WAVE.”

    (As a side note to the free market, the things that worked during our Katrina disaster was the free market.) And I’m glad to see Europeans adopting more free market approaches to healthcare, it will save you.

  9. bigring55t says:

    Morgan, According to the WHO the US currently ranks 37th in the world for quality of health care. The people who died in Europe did not die because they didn’t have access to healthcare, they died because the heat, combined with various other factors such as air pollution, did them in. The technical term is excess deaths. Oh, and by the way, in 1995 in one week, 793 Chicagoans died in a heat wave. Try scaling that up to the size of Europe and see what you get for a real comparison. 800 dead in one week = your system really sucks.

  10. Morgan Warstler says:

    “The impact of failures in health systems is most severe on the poor everywhere, who are driven deeper into poverty by lack of financial protection against ill- health, the report says.

    “The poor are treated with less respect, given less choice of service providers and offered lower- quality amenities,” says Dr Brundtland. “In trying to buy health from their own pockets, they pay and become poorer.”

    The World Health Report says the main failings of many health systems are:

    – Many health ministries focus on the public sector and often disregard the frequently much larger private sector health care.
    – In many countries, some if not most physicians work simultaneously for the public sector and in private practice. This means the public sector ends up subsidizing unofficial private practice.
    – Many governments fail to prevent a “black market” in health, where widespread corruption, bribery, “moonlighting” and other illegal practices flourish. The black markets, which themselves are caused by malfunctioning health systems, and low income of health workers, further undermine those systems.
    – Many health ministries fail to enforce regulations that they themselves have created or are supposed to implement in the public interest.”

    BR, I didn’t say the care in the US had the least disparity. In fact the WHO report specifically is against disparity. According to the WHO, the rich aren’t supposed be able to BUY better care for themselves.

    WTF? Why be rich if you can’t spend your money?

    Disparity between rich and poor is not of any concern in any moral sense, the question is, which system provides the best care for their poor? Would you rather be 27 and poor with bone cancer in in the U.S. or in Cuba?

    Housing the world class doctors, doing the most advanced research, providing the at-any-cost breakthoughs, driving the technology forward, that’s given no attention by WHO, they actually can’t fathom where the US spends its money.

  11. Rachel says:

    “That’s given no attention by WHO, they actually can’t fathom where the US spends its money.”

    Neither can anyone else who lives outside the US. Morgan, I’m afraid I must fall back on anecdotal evidence. But I’ve lived in the US, and I’ve lived outside it. And I say this as a comparatively rich person, who can afford the care I need, even in the US. There are many other things about the US I admire. Its health system is not one of them.

    You keep raising things like: ” doing the most advanced research, providing the at-any-cost breakthoughs”. But there’s NO link between the cost of health care and the quality of research. The two things are quite distinct. If you’re going to keep returning to this trope, please cite some sources for your assertion.

    And by the way, there are “world class doctors” in most western nations. The US is really nothing special in that regard. You should attend more medical conferences.

    Two further things in relation to your rebuttal (apart from the one already raised in Bigring55t’s post):

    “Many health ministries focus on the public sector and often disregard the frequently much larger private sector health care.”

    Not true. But it is true that – outside the US, in OECD nations – the public system usually dwarfs the private system. In most countries with socialised medicine, there aren’t any private teaching hospitals, apart from some run by the Catholic church (which is its own special brand of bureacracy). There’s no money in research. It’s done in University teaching hospitals, which are associated with the various National health systems. And, as I said earlier, they do great research.

    Also, Morgan, I’d rather be 27 and poor in Cuba, thanks very much, although it’s a cheap shot by you comparing the relative discrepancies in standard of living. For a start, poor in Cuba is a whole lot poorer. But, as a fairer comparison, I would much rather be poor and have a Sarcoma in, say, Canada than the United States. And I’d sure as hell rather be in Canada if I had an illness that required ongoing medication.

    I’ll grant that you can run the libertarian line in most fields and have a coherent stand, Morgan. But in health care, it’s no contest. The US spends much more per capita, for much less result, than any OECD nation. Don’t ask the WHO, though they’re really quite credible. Go ask those masters of left-wing-spin the OECD.

  12. bigring55t says:

    Morrgan here are the criteria used by WHO for their ranking. As you can plainly see, their ranking clearly includes factors besides economic disparity. Below is a quote from their site listing the criteria, but first a fact and a question. One good measure of how a healthcare system operates is infant mortality, since even the US provides virtually free healthcare for infants. According to the CIA factbook, in 2007 the US ranked 41st in infant mortality(actually listed as 180 out of 221, but in descending order of mortality). Here’s my question: don’t you realize that it is in your own best interest (and no, I don’t mean in a granola crunchin’ groovy makes you feel good kinda way) to make sure that everyone has access to decent healthcare. Full access to healthcare means better information and an earlier warning which can help save many lives in pandemics and epidemics; full vaccination maintains herd immunity for diseases like polio and smallpox; early detection by primary care physicians is what our nation would rely on in the event of a new disease entering our country for the first time, for example, West Nile virus. Primary care is what protects our nation from these threats, and ensuring all our citizens receive quality care will keep you physically safer. From my point of view, it’s worth the investment because it protects the whole country, same as the military.

    “WHO’s assessment system was based on five indicators: overall level of population health; health inequalities (or disparities) within the population; overall level of health system responsiveness (a combination of patient satisfaction and how well the system acts); distribution of responsiveness within the population (how well people of varying economic status find that they are served by the health system); and the distribution of the health system’s financial burden within the population (who pays the costs).”

  13. Morgan Warstler says:

    Two further things in relation to your rebuttal (apart from the one already raised in Bigring55t’s post):

    “Many health ministries focus on the public sector and often disregard the frequently much larger private sector health care.”

    Rachel & BR,

    Those aren’t my words, those are the WHO. I was quoting the report.

    Disparity & Distribution means if you raise up the upper middle class (like in the US) and give them ultra-premium healthcare, the WHO takes points away for a variety of reasons.

    Anyway, I’m going to do Canada, now , since you think pointing out that comparing the poor to each other isn’t just (Rawl’s just rolled over in his grave):

    “The future of health care is upon us. In Canada’s biggest city, a young woman in need of fairly basic care at her local hospital does not receive it, and she spirals into a depressing medical morass. Even her father-in-law, a successful dentist, finds himself unable to negotiate the medicare bureaucracy. Ultimately, he feels he has no other choice except to call his only contact in the media, hoping that public shame, if nothing else, might save Jennie and others from further suffering.”

    “More than 150 critically ill Canadians – many with life-threatening cerebral hemorrhages – have been rushed to the United States since the spring of 2006 because they could not obtain intensive-care beds here. Before patients with bleeding in or outside the brain have been whisked through U.S. operating-room doors, some have languished for as long as eight hours in Canadian emergency wards while health-care workers scrambled to locate care.”

    “Canadians waited longer than they have in more a decade for non-emergency surgery this year, despite a multi-billion-dollar effort by governments to speed up medical care, according to a controversial think-tank report released yesterday.

    The average wait between being referred to a specialist and receiving an elective operation was 18.3 weeks in 2006, up from 17.8 the year previous, concluded the conservative Fraser Institute in its annual look at medical backlogs.”

    “He never imagined the ordeal that would follow: The young man was turned away from five hospitals, got lost in an ambulance and, 28 hours after he was diagnosed, he had a burst appendix removed — in Montreal.”

    “Tony Lachetta, a 36-year-old mechanic in Thunder Bay, said, “We have to wait a year for an MRI. If I needed one, I would go to the United States. It’s only four hours away. You pay $1,000, but it’s better than waiting a year.”

    Ok, with all that said, I realize it is fashionable to pretend Michael Moore’s edit job is honest, but it isn’t.

    The truth is in single payer, the vast number of middle & upper class in this country who have (albeit expensive) PPO even HMO insurance, they’d be getting less, so the poor here would get, “more.”

    The only solution we need here in the US is incremental, all of our poor get care, but we need we need a place for the poor to go for preventative care – so it isn’t the emergency room.

    We also, need to move the common stuff for most everyone, to places like this:

  14. Harry Pottash says:

    I also agree that socialized medicine is probably not the answer. (though an interesting question to think about is: isn’t health insurance simply a form of socialized medicine that you enter into explicitly and voluntarily?) And as Pete pointed out, Like most libertarians I think the problem is too much regulation, or in this case regulatory capture, but I don’t really have anything to back up my ideas.

    At the same time It does not seem to me that the current US health system is working well. I have seen a large number of links to anecdotal failures in health care, but its important to recall that real assessment lives in the statistics, not in some horror story that a circle can be dramatically written up in a newspaper. Much in the same way that you can’t tell if driving or flying is more dangerous by digging up newspaper stories on horrible deaths by transport, you can’t compare medical systems quality by digging up horrible cases of people who fell through the cracks.

    Though I don’t agree with your dismissal of the WHO assessment, I accept it. Infant Mortality, however, is probably the oldest and best proven yardstick for the levels of health and health-care in a society. Our ranking is pretty sad, which means that our health in general is probably not good. It’s also of value to note that this isn’t one of those rankings where there is a near 60 way tie up at the top, or some other distortion that makes ranking unreasonable. We have more than twice as many babies die as Japan.

    Call it a market failure, or regulatory capture, or anything else that you want, but the system as it stands is not working.

  15. Morgan Warstler says:

    Infant mortality correlates to to pre-term delivery pretty tightly as it does low birth weight.

    It skews pretty much because of the mother’s behavior during pregnancy whether that is smoking & drinking or eating crap all day.

    “We still don’t know why the U.S. has more preterm deliveries than other countries,” said Wilcox. “We don’t even understand what causes labor to begin. But we do think these are the right questions to be asking. If we could aim more of our research towards figuring out how to prevent preterm deliveries, we might be able to make some real headway in lowering infant mortality.”

    I personally am furious that self-medicating is illegal. Doctors pick up more half their visits from customers who know already want they have, because they have had it before, and they just want prescription drugs.

    Blood work, listening to you breathe, looking in your nose and ears – is most of what happens in preventative care. You want the little low cost centers anywhere & everywhere, with a central private DB of people’s medical records.

    Mal-practice needs to be limited to the value of life.

    Reducing costs is about lowering gateways. Before we reduce the high quality care that millions receive in the name of fairness, we need to get rid of the gateways.

    Finally, we need to come to terms with the idea, that ten most expensive days in a person’s medical life are the last ten days – and they should be factored out of policy discussion. Life no matter what is a ridiculous financial goal.

  16. bigring55t says:

    OK Morgan, I’ll give it one last shot. The WHO criteria include more than just heath care disparities and dispersion. They also include such quaint ideas as “overall level of population health” and “the distribution of the health system’s financial burden within the population (who pays the costs)” and “overall level of health system responsiveness (a combination of patient satisfaction and how well the system acts)”. As far as your statement “since you think pointing out that comparing the poor to each other isn’t just” just what do you think the distribution and dispersion aspects of the WHO report are doing. It has everything to do with the level of healthcare that poor people receive compared to rich people. A lower ranking would in part indicate that poor people in the US receive significantly worse healthcare than those other 36 countries that rank ahead of the US.

    As far as wait times go, I tend to agree with Harry, you seem to be good at cutting and pasting anecdotal evidence from dubious sources, but the plural of anecdote is not data. So, let’s see what doctors have to say about wait times in the US healthcare system (and yes, I will spare you my own personal anecdotes).

    From NPR, January 22, 2008 “a study released in the Journal of Health Affairs the same day, describing increasing waits in U.S. Emergency Rooms, even for the very sick. This on the heels of the Institutes of Medicine recent report that ERs are at a breaking point.

    Dr. Arthur Kellerman, professor of emergency medicine at Emory U., noted that though it is popular to point to Canada and the UK for their long wait times for elective procedures, the waits in U.S. emergency rooms are “the waits that matter” — heart attack victims and other true emergencies are receiving delayed care. Waits for heart attack victims doubled between 1997 and 2004.

    U.S. Emergency Rooms bear the brunt of the burden of the crisis in health care access — those who cannot access primary preventive care resort to emergency rooms for basic health care or delayed crisis care.

    Kellerman pointed out that it doesn’t matter whether one is insured or uninsured, all are affected by these delays. The report ended with the news that the federal government is planning to cut funding to hospitals with the biggest problems – in inner cities, etc.”

    From Business Week July 9, 2007 “In reality, both data and anecdotes show that the American people are already waiting as long or longer than patients living with universal health-care …”

    ” If you find a suspicious-looking mole and want to see a dermatologist, you can expect an average wait of 38 days in the U.S., and up to 73 days if you live in Boston, according to researchers at the University of California at San Francisco who studied the matter…”

    “All this time spent “queuing,” as other nations call it, stems from too much demand and too little supply. Only one-third of U.S. doctors are general practitioners, compared with half in most European countries. On top of that, only 40% of U.S. doctors have arrangements for after-hours care, vs. 75% in the rest of the industrialized world…”

    “There is no systemized collection of data on wait times in the U.S. That makes it difficult to draw comparisons with countries that have national health systems, where wait times are not only tracked but made public. However, a 2005 survey by the Commonwealth Fund of sick adults in six nations found that only 47% of U.S. patients could get a same- or next-day appointment for a medical problem, worse than every other country except Canada.

    “… But Gerard F. Anderson, a health policy expert at Johns Hopkins University, says doctors in countries where there are lengthy queues for elective surgeries put at-risk patients on the list long before their need is critical. “Their wait might be uncomfortable, but it makes very little clinical difference,” he says.

    The Commonwealth study did find one area where the U.S. was first by a wide margin: 51% of sick Americans surveyed did not visit a doctor, get a needed test, or fill a prescription within the past two years because of cost. No other country came close.”

    So, to summarize. Comparing poor to poor, part of the WHO report. Wait times, not good in the US for many critical situations. Same or next day appointments, the US manages to beat only Canada. Non elective specialists and hip replacements, still finish 2nd to a nation with national health (Germany). Ability to see a doctor restricted by cost. US is first by a mile.

    Two more points. First of all, restricting ability to see a doctor by cost = health care rationing, except that we should call it irrationaling, since it makes no sense to do it that way. Second, to expand briefly on a point that Harry made, having national insurance is not the same as socialising medicine. Socialising medicine would be saying you have to see only Dr. X, not Dr. Y or Z. (Wait a minute, insurance companies already do that). National insurance means it is cheaper for everyone because you have the biggest denominator. Single payer means exactly that, one entity pays all the bills. Which means you could finally go see a doctor, or get an operation, without worrying about whether everyone on your surgeons team, or the ultrasound guy in your cardiologist’s office, is covered by your private insurance.

  17. Jon Taplin says:

    What I see here is a group (Rachel, Bigring55 and Harry) offering statistics countered by Morgan offering anecdotes. Its not a fair fight. In 1945 the U.S. was first in life expectancy for both men and women. Now we are 17th. We spend 40% more per capita on health care than any other developed nation and have less successful outcomes.

    It does no good to just pretend like John McCain that we have the best healthcare system in the world.

    What’s interesting about the Massachusetts experiment in Universal Care, is to see if the market reacts to the need for more primary care physicians. Time will tell.

  18. Morgan Warstler says:

    Then you don’t know how to read Jon.

    Above you will see more then ten sources quotes, stats galore. You need to read and count.

    It isn’t a bad thing that we don’t have the highest life expectancy, here is a great discussion for the TED conference, WATCH IT:

    Ultimately the point is the entire third world is catching up with the civilized world – that doesn’t mean the first world is failing. Don’t be upset that we don’t live 40 years longer (114) than the third world – those 40 years suck. Quality of life past 90 is hardly liveable without constant care. Life extension isn’t making strides like it used to, so there are obvious shifts happening globally, GO WATCH THE VIDEO.

    This is a real argument Jon, you need to deal with it – it trumps your silly stuff.

    Facts like, “US poorest are the fatest poor,” has real implications – it comes from freedom and the low cost of high fructose corn syrup – and it leads to dying early.

    IT DOESN’T MEAN, we need laws to tax fat people, which comes next after socialized medicine, it means we can simply discount longevity as anything more than a choice – and say, being fat is an opportunity afforded US citizens, it is a lifestyle choice they pay for by living shorter lives.

    Jon, 35K DEAD in a heat wave means socialized medicine is dumb. When you want to start a post with 35K isn’t a big deal… you’re opinion will matter more here.


  19. saintsteele says:

    While I certainly don’t believe that an unregulated market always produces the right outcome, medical education is far from a great example of the free market at work, due to the government dollars that subsidize residencies and med schools. That being said, I am fully behind experimentation into socialized medicine. We almost certainly will make some mistakes with it up front, but I am equally certain that we will improve with time. Nobody starts with a perfect system, but we already have the advantage of being able to look at what other countries have learned.

  20. Jon Taplin says:

    Morgan- Your point on lifestyle (obesity) and longevity is well taken. The free market to sell cheap crappy food is but one more aspect of Milton Friedman’s paradise.

    This still doesn’t address my point that we get less service for more money than any other developed country. The reasons are simple. If the facilitator of health insurance payments is a profit making entity needing a 15% return on capital, it will inevitably be more expensive than a single payer system run by the government at break even.

  21. Morgan Warstler says:

    Jon, thats seems/sounds reasonable, except there are many outside factors, I’m loathe to even mention but ok here goes:

    1) Other Western nations do not protect themselves. We do. This isn’t an argument to make them protect themselves – to dangerous for us – it is to point out, how much weight our capitalist system carries and still trumps them. How is it with our massive military excursions, and spending all this healthcare money – we have michael moore pretending french pregnant ladies need a state employee to come over and do their laundry? Because it proves WHY our system is better – because theirs is retarded. If the French ever have to defend themselves (yeah right), the first thing going over the side, is the visiting laundry lady, and michael moore’s movie sales.

    2) The rich deserve better because they are paying. It is fundamental to property rights, you need to say it outloud. No matter what level of care we should expect all non-paying people to have, after that – the rich deserve better. It isn’t enough to say, “well obviously, they are going to get better care,” you have to admit their cash = luxury rights, and past some point, health care is a luxury.

    3) In a socialist system, past a person’s ability to continue to work, their healthcare is a luxury. It always ends up there. Admit it.

    4) Just because it needs said, when you say, “he free market to sell cheap crappy food,” it shows you have very little internal clock for the free market.

    If you had such a clock, you’d say, “the free market to BUY cheap crappy food.”

    We don’t seek/desire/have/want a free market because we want to sell goods without limits, we seek it because we want to buy without limits. It is about choice in how we spend our hard earned dollars. Whether it is porn, foot deodorizers, pot, active yogurt, pop rocks, automatic weaponry, fine art, 200 types of cereal, internet start ups, or hookers… we seek buying choice in the marketplace. Thats what motivates us.

    It may make it easier for you to stop blaming the free market, instead blame the people who seek choice.

    5) That 15% efficiciency = 35K dead in a heatwave.

  22. Harry Pottash says:

    I apologize for dropping so far back in the thread, but I wanted to thank you for pointing me at that link regarding the correlation between birth weight and infant mortality rate, It was a very fascinating read, though I don’t feel like it did a particularly good job of backing up your point, as it pointed out that japan has lower birth rates than us as well as infant mortality.

    I also agree that it is frustrating that self medicating is illegal, though perhaps the redi-clinics that you have mentioned can provide something of a relief for this problem. (It’s also worth pointing out that because advertising can effectively distort the market there might be other problems with this. Recall that when self medication was the norm most people were using opium “tonics” to treat just about everything)

    My agreement strikes at its deepest with you regarding the concept of limiting malpractice awards to the realm of sanity. (value of life is a hard thing to calculate, and many would argue an immoral thing to calculate as well) and more importantly realizing that a lot of medical spending is used inefficiently in dragging out death.

    If I could get a health-care plan that was arranged so that it only covered procedures that offered a real hope of a real recovery (as opposed to things that would let me live an extra 15 days) I would sign up in a second. An interesting question is why, in our open market system, we don’t have one that serves from that angle. (My guess is due to mis-regulation / regulatory capture)

    It also seems to me that the way the HMOs are set up fiscally they are bound to be abusive. At the moment it appears that the model is “you pay a fixed price for insurance, we pay out claims and then keep the rest” which guides them not to pay out claims. I would have much greater trust for, and prefer to sign up with a company that used the model “you pay us a small fixed administration fee, and then we divide up cost of claims delivered by the number of people in the plan and pass that on to you, your bill changes month to month, our profits are fixed” that way there is a weak incentive for them to avoid claims (which will raise the buy in price, driving people away and garnering them a smaller administrative fee) and a weak incentive for them to pay out a claim (they don’t have to pay to fight it in court)
    Once again, our free market seems to provide nothing like this, or any of 100 other novel arrangements.

  23. Morgan Warstler says:

    I totally agree, I like the idea of insurance companies publishing exactly how much they keep year in year out, as an advertising effort.

    “You know your rates are low because you know how much we make.” The web is changing this stuff, it is all coming I’m sure, much like in the real estate business.

    Maybe it is a generational thing. I’m 37, but I’ve watched so many industries be torn down by the market and replaced by new better things. I’ve watched cell fones become all you can eat for $99 – and that number is going to be $75 in a year. I’ve watched the whole Internet built like they were building it for me. I can’t believe the crap you can buy for $20 a Wal-Mart. It is amazing. And it seems obvious to me that in this world, the reason healthcare prices don’t fall, is because everyone has the bad sense to die, no matter how long we keep them alive – and right before they die, they need a whole bunch of really expensive medical high tech care.

    It is as if right before everyone dies, they want to buy a 150″ flat screen TV and a 1 TB IPOD and a country club membership.

Leave a Reply