Sunday, October 25, 2009

Health Care Reform – The AIG, Freddie & GM pill. Take two of these and don’t call me in the morning

The other day I had an interesting back and forth on Twitter about healthcare. The debate was whether to let the free market have its way or whether the Federal government should have a stronger hand in a “Medicare Part E” plan for everyone. At the end of the discussion I was pointed to an article on Jason’s The Proud Profiteer website entitled Health Care Reform – The red herring of the pre-existing condition. I read every word of the article and have some thoughts about the free market as it exists today and where I think the author is wrong about where we should go.

I’m all for freedom and principles in this country. The author is correct in pointing out that the country was founded on the freedom and the need to get away from tyranny, taxes and religious persecution. Now the drumbeat throughout certain people in this country is that free markets and freedom will be the pill that will cure the country’s ills. Just get government out of the way of everything but defense and we will be a better place for it. Make it “small enough to drown in a bathtub,” to coin a phrase used by one of our most memorable politicians.

One of the ways we applied these principles was to allow mortgage companies, insurance giants and auto makers to, as the author says it, be free to succeed or fail. They’re good at what they do, so why not turn them loose to thrive and then we can all benefit at their success. So how do you explain the story of Goldman Sachs, AIG and the Freddie/Fannie debacles? Weren’t these companies free to pursue their own fortunes? And what would’ve happened if they were allowed to just fail? I guess those that would’ve allowed the complete meltdown wouldn’t mind what is happening in their free market 401(k).

“But we should still get out of the health insurance company’ way,” you say. “Once they have complete freedom they’ll offer a virtual cornucopia of health insurance options that every thirst will be slaked. You’ll see that there will be lots of companies and options.” If you Google health insurance company monopoly, you will quickly discover that for several years large companies have had a lock on providing health care for people. If we get out of the way, what do the Blues, Aetna and the rest do? Do they allow rigorous competition and thousands of new companies to spring up? I think they either buy up those companies to stifle competition or squash them. I was told in the Twitter conversation that we should force these companies to compete with each other. So which is it – get out of their way with no regulation or force them to compete?

If government is our own worst enemy as the author’s comments point out, why not just get rid of everything? Courts – who needs them? You’ve gotta beef with someone, handle it yourself and if you don’t get anywhere, kick the person’s ass or kill them. If one of those purely good companies make a product that turns out to seriously injure or kill people and you’re one of the poor schmucks that gets hurt or killed, tough luck bud. Like I just said, take a truck of Anthro and fuel and have at it.

Police and fire – we don’t need them, right? I’m sure there’s a security company that would be glad to give you your own security detail cause it’ll “fill a need.” Don’t have enough money to hire a security agency? Deal with it. There’s lots of crime victims out there. Go find the turkey yourself and dispense justice.  The 911 system is a socialist, government run system – get rid of that too. You’re having a heart attack, stroke? Get someone to put you in their car and drive you to the doctor. We don’t need no stinkin’ government run ambulances and medical staff. Hire some doctors and paramedics to stand by if you think you’ll need them.

Like you all say, for every need there’s someone to fit the bill at competitive rates, and since we’ll all be SO much more profitable when everyone gets out of free market’s way, we’ll be able to afford all these new things, right?

“But these are all ESSENTIAL government services,” you say. “You can’t take that away!” You know what, here’s where I want you to draw the line. Black & white. Think of all the things that you might need in life. Tell me why you would keep or privatize them. Then tell me why health care is not as important as 911, police, fire & paramedics. Why would you want to keep 911 as a government service but leave health care – the ability to live or die – as a FOR PROFIT endeavor.

If you can’t afford heath insurance, Jason says that you’ll have to turn to charity. Leukemia and unemployed – charity. Stroke leaving you the inability to walk, speak or do your job – charity. Born with cerebral palsy or autism and your parents or unemployed/underemployed – charity. Jason, do me a favor, a little experiment. Take you & your son down to a doctor’s office you’ve never been to before. Tell the receptionist that you’re out of work and need your child seen for whatever – you name the illness. After they get done telling you to pay cash or you don’t get seen, take the amount of money the doctors wants you to shell out and start calling some churches. Give them the same story and tell them that you’ll probably need that same amount of money each month since your child might need special ongoing treatment. When you find the charity that’ll dole out that money month after month, let me know. The difference in your opening paragraphs – each of these families you mention probably has at least ONE working member in the household providing pay for health insurance. If I’m wrong, tell me how they’re handling things on charity.

When I’m buying a car or a toaster, I want free market competition. I want the government to stay out of the way UNLESS what those kind folks are selling is hurting people. When I’m having a heart attack or stroke, I want an ambulance and crew to show up as quickly as possible and save me life! I don’t want to have to think if I paid my premiums that month or that some FOR PROFIT company “with my best interest in mind” will deny me life saving treatment.

How does a publicly traded company, beholden to its stockholders and profits, have my best interest in mind? If I’m a stockholder that’s easy. If you’re a CEO with complete free market freedoms, how do you take care of people with serious medical problems and still make your bottom line? How would Ford survive as a company if most of the vehicle they sold were Pintos or some other high maintenance vehicle? What incentives and marketing schemes would they contrive to make it profitable?


  1. Rob, I must say you severely distorted many of my argument, and what is left of your argument is just an attempt to pull at peoples heart strings. My response is over at my blog,

  2. Rob, let me first say that I enjoyed our back and forth over twitter. It is not often the conversation lasts as long as ours did. So I want to thank you up front.

    However, this may come as a shock to you, but I think you got this post wrong from beginning to end. If I have to narrow it down, I guess your most offensive parts to me are the last 2 paragraphs.

    1: there doesn't exist a free market in the sale of health insurance today. That was my entire argument to you when we talked over twitter. Gov't interferrence is the reason why our current healthcare system is so screwed up. So when I said force these companies to compete, I wasn't double speaking. By having the gov't get out of the way, you force these companies to compete because the gov't is no longer sponsoring the monopolies.

    2: You like the free market when it comes to buying a car or toaster, but not for healthcare (specifically health insurance), only or primarly because a publicly traded company doesn't have your best interests in mind. You destroyed the basis for your entire argument with that sentence.

    NEWSFLASH -- THE CAR COMPANY AND TOASTER MANUFACTURER DON'T HAVE YOUR BEST INTEREST AT HEART EITHER! Yet you have no problem with them being publicly traded companies operating in a free market. I guarantee you that if the gov't started directing what toasters were manufactured that you would see far less innovation and huge inefficiencies develop. Sadly, that will happen with Government Motors if they stick around long enough.

    The beauty of the free market is the fact that money can be made. Consumers purchase what fills their need. That means a company has to produce what the market desires if it wants to make money. Do you see how this benefits everyone? The same would go for healthcare and health insurance if you did the same thing.

    I look forward to your response here or in twitter @j_gardner

  3. Thanks all for the replies. Here is what I have boiled our discussions down to: we are SO far apart on our thinking about health care and insurance companies that I'm not sure that the two sides can EVER hope to win any arguments in the debate. Each side is firmly entrenched in their thinking and we are all working off of two different sets of facts, so we'll never agree on anything. But you did persuade me to change my position about one thing.

    I was firmly against states being able to opt out of whatever plan the government comes up with. You have made me do a complete turnaround on this topic. Here's what I propose (and I will write my politicians about it): bring the opt out option into the bill. Let those states that opt out also be able to do the following:

    1) Disband their state health insurance oversite. Complete deregulation will be the norm and insurance companies can do as they please

    2)Allow the people in those states to buy plans across state lines with other private insurance companies.

    Public plans in opt-in states are available to citizens in their state only. Additional taxes to pay for the public plans will not be taken out of peoples' pockets in opt-out states.

    The proof will be in the pudding. Let's run this for 10 years or so and see what happens. If I'm wrong, I'll eat crow. To those people who want to opt-in in an opt-out state, my apologies.

  4. Rob, I responded to your comment on my blog. I think you may want to challenge your assumptions. Under gov't health care, needs will be met based on political points. Under the free market they are met based on needs. To make a profit, I must meet a need, and to make the most profit possible, I must meet that need to as many people as possible. Under gov't, I must meet the needs of a group big enough to get elected. The rest be damned.