For some time now i've been consternated by the incredible regard many right-wing Christians hold for unfettered markets (excluding drugs and pornography, of course). Back in the day, when they were deathly afraid of the Godless Communists, it was kind of, you know, cute. But as it becomes increasingly obvious that our market-driven approaches to some problems just aren't working, this fanatical devotion to The Market starts to look like idolatry.
15 March 2007
Worshipping The Golden Bull
For some time now i've been consternated by the incredible regard many right-wing Christians hold for unfettered markets (excluding drugs and pornography, of course). Back in the day, when they were deathly afraid of the Godless Communists, it was kind of, you know, cute. But as it becomes increasingly obvious that our market-driven approaches to some problems just aren't working, this fanatical devotion to The Market starts to look like idolatry.
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4 comments:
Agreed that worship of the market has become ridiculous, probably best personified in the Club for Growth. Most ideologies end up substituting dogma for facts sooner or later. They also tend to see any move at all in the direction of the center as only the first step of a slippery slope, and so resist even compromises that meet their goals.
I'm not sure what the article's author's solution is, but it seems to me the general rule should be to start with a market approach to most problems and opportunities, and then fill in with gov't intervention (subsidies, regulation, whatever) when a sufficiently worthy social good isn't being fulfilled by it.
I also don't know which moderates he's talking about that arrive at a solution in the middle regardless of its merits. To me, what would make most sense is to require everyone to purchase health insurance and subsidize those who can't afford it on a sliding scale.
This would get everyone insured, and be progressive without a large bureaucracy or huge outlay. We often spend more treating people who don't have insurance now, and if the plans were regulated to emphasize preventative care, establish a national database that correlates treatments and measurable effects, etc., we may end up saving money in the deal.
abz
Your scheme laudably gets medical coverage for everyone, but i seriously doubt anyone would end up saving money. It creates or exacerbates two perverse incentives: first, requiring and subsidizing coverage reduces the impact of price competition, especially at the low (subsidized) end but also across the (required-coverage) spectrum. Second, wherever you establish the sliding scale subsidization curve, you give people an incentive to adjust their finances to slide as far down that scale as possible; and unless there is a dramatic change in the economics of health care (fingers crossed), that incentive will only become more powerful as health care costs grow.
In addition, this scheme doesn't address at all the incentive on insurers to dodge care costs, and the resources wasted in the fight to determine who pays for what.
Of course, we could regulate prices, mandate plan features, create a public/private oversight group to normalize coverage decisions, etc -- i.e. we could regulate meaningful competition out of the market -- but at that point one has to wonder why we would be maintaining multiple, redundant, non-competing bureaucracies that ate dollars before they got to medical care.
Now, this scheme is very similar to my (thin) understanding of the system currently in place in Massachusetts, so perhaps in a few years some real-world data will suggest that these cross-purpose incentives aren't as wasteful as i'm suggesting. But for now, i'm very skeptical.
The Market, quite reasonably, wants medical care to be paid for by the people who use it (the sick), and not by the people who don't (the healthy). Trying to create a "market-based" system that undermines one of the essential characteristics of a market is like trying to wrestle an oiled eel.
Are you saying it's a...risky scheme? Heehee.
I don't think there is a solution to health care that doesn't involve significant risk and trade-off. It's too big, complicated, and intersectant (is that a word?) with some of our lesser instincts. Any system will have problems.
Going to single payer trades the large set of problems we have for another (and I would argue bigger) large set. And, it would be nearly impossible from which to retreat, as are all government entitlements I can think of. Ideally, policy should be made on best realistic assumptions at the time, then regularly fine tuned to improve it and adapt to changing cicrumstances. I think a market-based approach gives us the best chance for that to happen.
The subsidization curve does give an incentive to lower finances to get in on the cash, but presumably no more than any other social benefit today. We have fraud in those areas, but not at high levels so far as I know.
Dodging paying for care costs: true, but at least it goes along with cutting legitimate costs in the system.
We likely won't save money under such a plan, but it could be much less expensive than commonly thought. We could save in the following areas:
We're already subsidizing health care for those without insurance, but more expensively than we should be since untreated small problems turn into big ones. Full insurance acts as preventive care.
Mandatory insurance becomes portable and is decoupled from employer provision. This saves a lot of time and administration for businesses and job changers, and allows greater doctor choice.
Finally, we could do much better with incentives to focus plans on prevention, exercise, etc. This gets a little touchy, but various estimates peg potential savings here at many billions.
Offering differential plans (catastrophic plus a menu of "basics" would be the required plan, extras would be optional) would also retain the incentive for innovation that is extant in the American system.
In all, I'm looking for a plan that covers everybody while retaining as much of the efficiency as possible. Subsidies and incentives are generally the way to go to achieve those ends. It's not perfect, but I think the best overall plan lies somewhere in this ballpark.
abz
Who knows, maybe if we pray hard enough, err, design a complex enough system, we'll make something we can call "market-based" with a straight face, while allocating medical resources in a way that's contrary to what the market would do on its own.
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