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01/29/2007

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michael choe

excellent post by gary becker. i myself opted for basic catastrophic health insurance offered by my employer this year because i spent too much money on more expensive health insurance i did not need last year.
-Another advantage of basic catastrophic health insurance is that the premiums are low and deductibles are high. high deductibles are great in that they force consumers to bear a greater share of their medical expenses. if you have to pay for a doctor's visit, you will only go if you absolutely must, i.e. the benefit of a doctor's visit exceeds the cost. one of the problems with national health insurance in europe is that the insured visit doctors and hospitals too often. even in america, the insured tries to get the insurance company to pay for everything, for relatively inexpensive procedures (under $1000).
-Speaking of national health insurance, a good argument in favor of it is that it eliminates the problem of adverse selection. however, making people buy some form of health insurance resolves this problem as well and it's a much better alternative than government provisioning/regulation.
-Compulsory insurance is not a radical concept. think about auto insurance. Health is a much bigger deal.

krapnek

"It would also contribute to leveling the playing field between persons who get health coverage through jobs, and those who must get insurance as individuals, perhaps because they have no job, or are self-employed, or their employers do not provide health insurance."

FYI

the self-employed can already deduct the cost of their health insurance.

J

The current health care system in The Netherlands is actually fairly close to what Becker describes. Health insurance is mandatory but provided by private insurers, and the poor can apply annually to the tax service for a rebate. This is both an attempt to solve the adverse selection problem and a modest redistribution program.

The problem with the current Dutch system is the amount of price control still involved in it. The prices of medical services and medications are still regulated. Insurers must take all comers, and they may give at most a 10% discount, which is eagerly exploited to offer discounts to non-smokers, vegetarians, pools of employees, and the like.

Some people, including members of the liberal (in the European sense) parties, want to further deregulate health care, but nobody really wants a requirement to buy insurance that could cost an arbitrary amount. The only solution seems to me that deductibles must go up, so that price controls and rationing can be abolished or loosened while still keeping the mandatory health insurance scheme affordable for everyone.

No doubt, some in the liberal parties would approve of a move to higher deductibles, but currently the prospects for people accepting much more than a few hundred euros in deductibles are grim. In the US, where there is a much larger variety of insurance and care schemes, it may be much easier to get people used to high deductibles, and I'm very interested to see what's going to happen with the $5000 deductible "catastrophic insurance" plans being touted over on your side of the Atlantic. I hope that whatever new regulation happens leaves room for such innovations.

J

FYI the self-employed can already deduct the cost of their health insurance.

Becker addresses this. He says that you can only deduct medical expenses when they exceed 71/2% (I think he means 7.5%) of taxable income, and that many families do not reach that cutoff. He also says that there is no such cutoff when the medical expenses are incurred by an employer on the employee's behalf.

Jim Moser

There is an inconsistency in the following two sentences. The first suggests the tax exemption is obtained by anyone having insurance, the second implies only those buying their own policy obtained the tax break.

"This means that families with health insurance will pay no income or social security taxes on the first $15,000 of their income, while individuals with health insurance will pay none on the first $7,500 of their income. This would increase the tax benefits from health insurance to anyone who is not now covered by employer provided health insurance."

Following sentence puzzles me because it suggests the coverage competition is unbounded. Since employers obtain the same deduction for wages and salaries as for medical insurance, they are indifferent in the form of payment. Recipients (the employees) on the other hand will compare an extra after-tax dollar of discretionary income to an extra dollar's worth of health care. At some point they will prefer discretionary income to more health care. So the competing with health care coverage is capped.

"Since there are no limits on how much can be deducted, employers competing for employees have an incentive to take out more extensive and expensive coverage than employees would want if employees had to pay the full costs."

Joel Pinheiro

All these reforms will only deepen the already serious problems of healthcare systems.

What is needed is a revolution, and it consists of a very simple proposal, which has worked very well for many other services essential to human life: free market for healthcare, no government regulation, no government provision.

Paul

There seems to be a discrepancy about the characteristics of the uninsured in the U.S.

Becker says:"...why should it matter to the rest of us if individuals and families, many of who are young and healthy, do not have health insurance?" and "A few studies indicate that emergency rooms are not used disproportionately by the uninsured, probably because they are mainly young and healthy,..."

Krugman says:"Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket."

I would agree with both of them assuming their assumptions about who makes up the greatest proportion of the uninsured was true. This can't be though. Either most of the uninsured are too poor to afford it, or they are simply young and healthy (and most likely can afford it) but choose not to buy health insurance. Where are the statistics on this?

jeff

The president's plan is a start. I am self employed, and cannot deduct any health care costs.
I have catastrophic health care only. When I go to the Doctor, it costs me $80 for an office visit, while corporate plans have prenegotiated rates and co-pays of as little as $5. I tried negotiating, but that is illegal under present law.

Not only should we provide tax incentives for insurance, but we need to interject competition into the after market for health care. This should have the effect of driving costs down for everyone. (Along with tort reform as well)

Jack

Clear as......... mud?

Self-Employment Health Insurance Deduction
From William Perez,
Your Guide to Tax Planning: U.S..
FREE Newsletter. Sign Up Now!
If you have self-employment income, then you can take a deduction for health insurance expenses.

Before claiming this tax deduction, you must calculate your allowable health insurance deduction. Take your self-employment income, and subtract the 50% deduction for self-employment taxes, and subtract any retirement contributions you make to SEP-IRA, SIMPLE-IRA, or Keogh plan. The remainder is your allowable deduction for health insurance expenses.

If your self-employment income is from a Schedule C business, and you report a net loss on Form 1040 Line 12, then you are not eligible to deduct your health insurance costs.

You can deduct the full cost of health insurance you purchase for yourself, your spouse, and/or your dependents. However, you cannot deduct any insurance costs for any months you were eligible to participate in a group health insurance plan through your or your spouse's employer. For example, if you paid for 12 months of health insurance coverage for yourself and your family, but you became eligible to participate in your spouse's group health insurance in December, then you can deduct only 11 months worth of insurance premiums.

Jack

The problem of discussing US medical care delivery is that its such a patchwork mess it's like discussing untangling a net or pile of rope....... all, of course aided by insurance companies polling to find our weak spot and then mounting huge campaigns as they did to ensure "Hillary care" was stifled in it crib. Let's take a look:

Michael sez:
-Another advantage of basic catastrophic health insurance is that the premiums are low and deductibles are high. high deductibles are great in that they force consumers to bear a greater share of their medical expenses. if you have to pay for a doctor's visit, you will only go if you absolutely must, i.e. the benefit of a doctor's visit exceeds the cost.

........ Is that how we'd handle the maintenance of other expensive machinery? Perhaps this is mythology? For example the VA who's "stuck" with paying for both large and small expenses insists upon regular physicals. Perhaps it "pays?" in addition to adding to health and life expectancy? Now tell the truth, if a doc visit were free or very cheap, do you have any desire to go there unless your symptoms seem worth the visit?


one of the problems with national health insurance in europe is that the insured visit doctors and hospitals too often. even in america, the insured tries to get the insurance company to pay for everything, for relatively inexpensive procedures (under $1000).

........ Well, perhaps. But! continuing on the VA model above, perhaps a part of "THE" problem is that of insurance cos going along with fee for service schedules so that each "incident" is a costly event. For example VA has a lot of patients requiring regular blood tests and a team of nurses run them through at a rate of perhaps 3 minutes per patient. There's NO paper work and the records are immediately available thru-out the system. My guess is that $10-$15 would cover the costs, but suspect "fee" docs send out a bill more in the range of $50 or so. Then insurance clerks have to wrestle with it.


-Speaking of national health insurance, a good argument in favor of it is that it eliminates the problem of adverse selection. however, making people buy some form of health insurance resolves this problem as well and it's a much better alternative than government provisioning/regulation.


......... ah yes, the old "adverse selection problem." But how TO "fix it?" Would a mandate to shunt us all into insurance pools work? Wouldn't the "young and healthy" (and short of money in our society) end up actually or feeling that they are subsidizing the old and unhealthy?


-Compulsory insurance is not a radical concept. think about auto insurance.

......... Here's another one! Compare it to another bloated system! Have you read Andrew Tobias on the many benefits of "pay at the pump" auto insurance? It would have to be "no fault" and the benefits would be tremendous:

No uninsureds
Far less litigation over "fault"
No insurance co commissions
(They would simply bid on risk pools and handle the claims work)

More flexibility for us; you need a big pick up for work? but want to drive a sporty car on off time? Fine you only pay insurance when you fill it up.

Further incentive to drive the most efficient car in your stable, and! to use it less. (Lower fixed costs, higher variable cost)

"Health is a much bigger deal.All these reforms will only deepen the already serious problems of healthcare systems."

....... Perhaps, we're stuck with incrementalism and trying to patch up an old junker. Let's start off with the basics: Who do we wish to leave out of health care? If the number is even close to zero, WHY are we spending half our health care dollar sorting them out and litigating?

Joel sez:
What is needed is a revolution, and it consists of a very simple proposal, which has worked very well for many other services essential to human life:
free market for healthcare, no government regulation, no government provision.

....... Joel, this one will work the very instant you go out trying to find a "good deal" on a family member's operation and medical care. BTW... anything in your concept that might take us from medical costs being the Number One cause of personal bankruptcies? Perhaps those "young and healthies" are incompetent as gamblers? or, as I suspect that FEW at or below the median income of $45,000/household can afford privately sold insurance?

Paul sez:

"Either most of the uninsured are too poor to afford it, or they are simply young and healthy (and most likely can afford it) but choose not to buy health insurance. Where are the statistics on this?"

......... in our bankruptcy courts? Or, In that 38 million Americans live at or below the poverty line? Or? You might pencil out a budget showing how a family at or below median income might include medical insurance? I don't think they can stand the risk of high deductibles.

In short.... WHY are we propping this outmoded mess up? It's has the worst of all systems. There is virtually NO market based incentives in it. We spend 18% of our hefty GDP while the next worst country spends 13% and the typical spends less than 10% to cover ALL of their citizens. So what we have is a "national medical system" in which the insurance mess costs 40% of every care dollar, their company CEOS make more than 500 Presidents or top Generals combined, and we KNOW this mess is taking us down.

With GM Ford deeply in the tank.... it will be interesting to see what comes out of THE coming health care debate now that even the laggards see it's an utterly broken system.

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Joel Pinheiro

Jack, one of the main causes of the high price of medical services is the cartel imposed by government regulation.
Most people need medical services which don't require deep and precise medical knowledge. However, with the current system of government regulation, only a handful of people are allowed to provide these services, which allows a very high price to be charged.

"So... if I hanged a 'neurosurgery - $5' on my door, would I be allowed to provide the service?? What's to stop quacks?"
Identifying quacks and hospitals and doctors of poor quality is an important service, is it not? One that the market would provide much better than the State.
We have private guides on the quality of restaurants, hotels, cars. With medicine, in which people's lives are at stake, this would also be the case (it already is, to some extent).

Furthermore, if someone sells rotten food and the buyer dies or becomes very ill, they are liable to prosecution; this deters people who would be willing to sell rotten food from attempting it.
The same applies for medicine: malpractice results in prosecutions and lawsuits.

Government-funded healthcare has many ill effects: it encourages disease and disencourages health (after all, it greatly decreases the cost of catching a disease and shifts it to those who, remaining healthy, will not benefit from medical services), it encourages overconsumption of health services and medicines, it shifts resources and capital to uses which do not satisfy people's needs in the best way possible.

In a free market for health services, the poor would have much more access to all kinds of services.
Not to mention that natural institutions which once played a more important role in keeping people healthy (the family, the church community, friends, etc) would be strenghtened.

Bernard Yomtov

The ability to avoid paying for medical care by going to an emergency room encourages some persons not to have their own medical insurance.

Maybe, but it is also true that the lack of medical insurance forces some people to rely on ER care, even when that is not appropriate? As you indicate, ER care is often slow and unpleasant. Doesn't it make more sense to think that most non-emergency users are there because they have no alternative, rather than because it is a carefully chosen economic decision?

There are some incentive problems with our current system that you fail to address. Private insurers have an incentive to provide less than the optimal level of preventive care, for example, because some percentage of their customers will change insurers, tus negating any benefit to the insurance company. Is this a major problem? I don't know, but it illustrates one way in which medical care does not conform to simple market models.

Jack

Joel..... Thanks for the reply, but I can not say I "wish I had your belief in The Market" as regards medical care.

There are several aspects of "markets" that simply do not apply to modern medicine:

A. In the selection of most other products the consumer has the following options which give him some stake in the negotiation:

1. The option to not buy at all, ie fix the old car or dishwasher.

2. The option to hunt for a sale, clearance of an outmoded model, or to wait until the price matches his "need" or demand.

3. Reasonable ability to assess product safety and reliability with fairly small penalties for being wrong.

Jack, one of the main causes of the high price of medical services is the cartel imposed by government regulation.

........ yup! Having served in the military and been treated at the VA I'm familiar with using paramedics, nurses and others to do what does not require an MD. In the "civilized countries" Docs and Dentists are NOT the gods they are here, but simply another form of techy or scientist. But I would argue that as long as we maintain our buggy age model where Dr God can send out his bills.... as compared to working for a salary we'll NEVER have "market power" to pound down their fees. (Can you imagine having your car built this way? "Hi, I do doors, want yours to fit? Sign here:"

Most people need medical services which don't require deep and precise medical knowledge.

........ the market does seem to be making SOME headway in parsing out procedures that can be done by walk in clinics. But.... often the results aren't accepted by the diagnosing God and aren't very fairly priced either.

However, with the current system of government regulation, only a handful of people are allowed to provide these services, which allows a very high price to be charged.

........ Yup, and I conclude that by one means or another "buggy style" cottage industries must yield to working within a modern "factory". Today, I saw a doctor, something of a specialist and his standard fee is $95. On this day what we needed to do took less than 10 minutes, but the fee is fixed. (And he makes more of his pay from operations etc. I do NOT think we can cut and paste or cut something off the bottom of a blanket and sew it on the top...... that will result in collecting enough money from median or lower wage households to pay these guys what they've come to expect in the US)

"So... if I hanged a 'neurosurgery - $5' on my door, would I be allowed to provide the service?? What's to stop quacks?"
Identifying quacks and hospitals and doctors of poor quality is an important service, is it not?

......... ah yes! A devout Libertarian??? But I'm partly with you....... I see a number of larger providers who are still watched by government, but there seems plenty of room for "consumer reports" on what Green or Blue provides or what there outcomes have been. (This is, of course, another VERY sticky wicket as all a surgeon or cancer specialist has to do to have high marks is to shun the toughest cases, and we're soon into the subjective question of "Well, did he do a good job considering the overall prognosis for the aging patient?"

One that the market would provide much better than the State.

......... I too would like to see more transparency and reportage. Interestingly the BEST of this is in a New England area consortium that HAS agreed to compare outcomes of various methodologies. (Docs have "favorites" so there may be 10 or more tactics for a given health problem..... and they typically do NOT like to have their method compared to others. I'm again with a larger global thing where peer review is a major part of the NE experiment... BTW they've beat everyone on lowering hospital infection rates)


We have private guides on the quality of restaurants, hotels, cars. With medicine, in which people's lives are at stake, this would also be the case (it already is, to some extent).

.......... as something of an amateur scientist I get side splitting chuckles out of how folks "decide" who's a good doc and who is not. A new family in town? Ms Jones asks her co-worker? who had a different problem "who is good here" and as with Senators most "like" their own but have no real data top convey.

Furthermore, if someone sells rotten food and the buyer dies or becomes very ill, they are liable to prosecution; this deters people who would be willing to sell rotten food from attempting it.

......... ah yes! Most of the rest of us have to provide product safety, but remember Docs and Lawyers "practice" for their entire career. Absent sewing a pair of pliers in the guy, for the most part they can say "Well, we did our best".


The same applies for medicine: malpractice results in prosecutions and lawsuits.

......... yes and most wingers would like to get rid of even that recourse. Truth is only a small percentage of malpractice is ever discovered or prosecuted.

Government-funded healthcare has many ill effects: it encourages disease and disencourages health (after all, it greatly decreases the cost of catching a disease and shifts it to those who, remaining healthy, will not benefit from medical services),

........ Sorry. Life expectancy in the US with "the best health care in the world" is lower than in most of the civilized countries that have comprehensive health care. BTW did you know that life expectancy in terrorist and war torn Israel is longer than in the US? Also, if you don't smoke, or have given it up, did the cost of health care play a larger role than that of declining health and the risk of taking a shortcut to your own personal grave?


it encourages overconsumption of health services and medicines, it shifts resources and capital to uses which do not satisfy people's needs in the best way possible.

......... This one I'm sure is "free market" mythology that is unsupported by any real numbers. IF!! such WERE the case why would the US be spending 18% of GDP while those with universal coverage ranging from under 10% to a top of 13%??

In a free market for health services, the poor would have much more access to all kinds of services.

......... well, now that the wage gaps as widened so tremendously you can forget "free market" solutions as even families closer to median income than that of the 38 million subsisting in our "rich" country at poverty levels simply do NOT have the discretionary income with which to play.

(Perhaps? some honest? "Libertarians" would want to debate the "third partying" of the operational costs of employees? ie. That industry must pay at least a maintenance wage? Just as they do for rents? use of trucks? tools? )


Not to mention that natural institutions which once played a more important role in keeping people healthy (the family, the church community, friends, etc) would be strenghtened.

........ this one seems particularly to be unsupported partisan rhetoric. Jack

Larry

To coerce health insurance coverage for all, like auto insurance, is not the answer, because it is the pre-paid aspect of the present system which causes unrealistically high prices. Prepaid money is low-lying fruit which many cannot resist snatching in borderline situations, if they are honest, and in all situations if they are not. Any legislator who agrees to mandatory insurance coverage must make damn sure the program provides very light coverage--mostly catastrophic--and that the coercive scheme cannot be ramped up eventually into a full-serve schedule. (And it is extremely hard to imagine any legislature brave enough to resist such ramp-up demands). It needs co-pays, too... Those with only the mandated coverage should find it just as unpleasant to go to the emergency room with that as they do now with no coverage. Perhaps high co-pays would ensure that. The goal should really be to get AWAY from any system of prepaid care--which is the beauty of "health savings accounts" and other such measures which deliver the leftover money for health care costs, after the providers get theirs, to the patients themselves. To my mind, nobody does a greater disservice to the public than those demagogues who urge universal health insurance, whether paid by the government, the employer, or the patients. Right now the universal insurance idea has enormous momentum, and it is a tremendous threat to the long term viability of the system.

MNPundit

Actually, the best solution is a national health insurance for a variety of reasons.

1) Reduction in Administrative Costs (they run up to 10% of total health spending now)

2) Removal of the burden of providing insurance from employers so they save massive amounts of money and can compete globally

3) Labor can now function in a more market oriented way because they are no longer tied to a job for health care but are instead free to offer their labor for compensation

4)Risk pool is increased to at least 150,000,000 and provides a system that does NOT focus on weeding out the "sickies" to increase profits

5)This is not socialized medicine as the research and hospitals are still managed as they are now, it is the insurance costs that are managed

Haris

I tend to agree with the many posters who have said or implied that health care reform at this point is mostly putting band aids on a major hemorrhage. I actually think the problem is much worse than many have said: the high cost of health care, particularly when compared to other countries, is at least partially related to many other dysfunctional aspects of US policy.
For example, think agricultural subsidies. Corn subsidies make it so cheap that corn and corn syrup are in pretty much everything. Corn is fed to cattle, which, not being their natural food, makes them susceptible to infection; they are then given antibiotics, which accelerates resistant strains of bacteria, and raises the cost of treating infections on us. Meanwhile, corn syrup is used as a sweetener that makes high calorie foods cheap, result in obesity and all the accompanying health problems, and thus higher costs.
That's just the first example of how US policy is contributing to exploding health care costs. Cutting gym classes for budget reasons, buying cheap and unhealthy food for schools, discouraging preventative care, these are all related to why we're paying so much for health care.
[Note I didn't say "too much." I don't think there's a right amount of health care and we're spending too much, but I'll agree that the cost of insurance or the procedures is becoming too high for many.]
Even transforming the health care industry alone would not solve the high cost until many other problems of US policy are brought in line.

Peter Konefal

As many have mentioned, the inefficiency of the US healthcare system stems from adverse selection: healthy individuals opt not to purchase healthcare insurance given the unlikilyhood of requiring services, while correspondingly, unhealthy individuals are more likely (adversely selective) to purchase healthcare insurance. The result is that insurance providers need to charge higher average rates to compensate for the adverse selection of the population of health insurance subscribers (un-reflective of the average level of healthiness in the US population as a whole).

The solution to this particular economic problem is universal healthcare - forcing everyone to pay a certain rate (results in lower average payments since individuals with a

This system isn't perfect either, since there are public goods problems (individuals have less incentive to remain healthy if they don't pay the full costs of that unhealthiness - since some costs are subsidized by other, healthy individuals who pay in taxes more than they extract in health services) - but it is arguably superior to the all or nothing dilemma of an adverse-selection health care system.

Great post by Gary Becker.

Peter Konefal

"Right now the universal insurance idea has enormous momentum, and it is a tremendous threat to the long term viability of the system."

You have to look at this rationally, and carefully consider the adverse selection issue. I'm all for private incentives and all against public-goods problems, but this is a serious issue in favour of universal health-care.

Universal health-care - when managed properly with incentive/disincentive policies - is, as I've said, arguably superior to the gross inefficiencies of an adverseley selective health-care coverage system.

Haris

Peter
Adverse selection is a problem in many situations. Universal coverage is by no means the only solution, or even the most efficient one. [I caught myself and didn't write "best."] In used cars, similar problems happen. If you're in the market for a used car, you figure every car is a lemon [else it wouldn't be for sale] so you have a low price you're willing to pay. This drives the better cars out of the market, and only lemons are actually solved. We do, however, have a great used car market, because of certification. People with good cars simply certify their quality and sell at higher prices. Similarly, insurance companies can simply perform physical check-up on potential insurance buyers, and adjust their prices accordingly. I'm pretty sure this already happens with many insurers. The more likely problem with health care prices is that there is no incentive for suppliers of health care to keep costs down since there is a third party payer, and there is no incentive or bargaining power for customers to demand lower-cost care, for all the reasons already discussed.

Peter Konefal

Haris,

"We do, however, have a great used car market, because of certification. People with good cars simply certify their quality and sell at higher prices. Similarly, insurance companies can simply perform physical check-up on potential insurance buyers, and adjust their prices accordingly. I'm pretty sure this already happens with many insurers. The more likely problem with health care prices is that there is no incentive for suppliers of health care to keep costs down since there is a third party payer, and there is no incentive or bargaining power for customers to demand lower-cost care, for all the reasons already discussed."

The problems involved in having a third party payer system (e.g. most typical government health care systems) is certainly problematic for the reasons you cite - essentially principal agent problems (or mismatched incentive systems).

Again, as you rightly point out - public health care systems can, to some degree, fail to deter poor individual health practices - since the individual is assured of care, regardless of the extent to which individual choices have led to increased health care service requirements.

In the US for example, I would think that incentives would exist to live a healthy lifestyle - since the costs of health care are so exorbitant. Of course, people can't always anticipate or control how much health services they will consume, so, if this phenomena exists, it is limited in its extent.

With regard to market dysfunctionality as a result of information assymetries (e.g. the case of the used car market where both lemons and good cars are in the same market, and customers have less information than sellers) it is true that the overall market price hits an average: higher than the real value of a lemon, and below the fair market value of a good car. The result tends to be market failure - customers stop buying any cars (for fear of ending up with a lemon), and retailers of high-quality used cars leave the market.

Certification is one way of resolving this issue, good point. Certification, of course, acts like university degrees - hopefully mitigating information assymetry by segregating the trully hard-working from those who claim to be hard-working, but aren't really.

As far as health-care is concerned, my current bent is towards something like what France has: a universal public health system, with the state contracting out to private health care providers. Because private providers are used, the ineffiency of government departments (with their usually gross principal-agent problems) are avoided.

In Canada, there is a slow creep in this direction right now. Unfortunately, the debate tends to be too polarized along irrational grounds - either between those who knee-jerk oppose the market (without realizing how useful the market can be) and those who knee-jerk oppose any mention of universal, or government involvement - for fear that it entails a too socialistic set of policies.

Great points Haris.

Jack

A parable: Once upon a time there was a regulated airline industry with many players who could not compete on price, instead they lured dollars to their counters by competing on service. The system also had advantages of providing service into smaller communities, and that if a traveler missed his plane, his blue ticket would be honored at no additional charge by the red or yellow airline.

This was probably a good system as during the inception of the airline industry, but did have problems, perhaps including tickets being too costly and pilot pay becoming too high. So, a "free enterprise" peanut farmer (if any farming operation, large or small, can be considered "free enterprise") deregulated them.

Today, of course, every traveler with bruised knees, has seen the benefits of cut throat competition based upon price and service has given us. Far lower prices to be sure, but quality? Flexibility? in terms of either catching the next plane out regardless of brand or getting into smaller communities w/o passing through Houston or Atlanta or SLC "on the way?" Not so hot, and with so many in bankruptcy I'm VERY glad the issue of safety is strictly enforced beyond the reach of their legions of peanut counters!

Anything to be learned that might be applicable to health care? Probably; that it's tough to find a "happy medium" in terms of setting up the field of competition for some industries.

So, I end up not far from Peter's remarks of:

"a universal public health system, with the state contracting out to private health care providers."

Going a bit further, what we spend today (18% of $13 trillion GDB does just happen to work out to the $7,500 per capita someone else mentioned here.... and a pretty hefty premium for old and young. Turn it into a voucher (ie a smart card able to contain much of a patient's relevant info) and let them go shopping for service and benefits among the green, reds, PPO's, HMO's or other health alliances and we've at least the basis for a system of universality and competition.

BTW did you notice I mentioned no role for our current "insurance" companies? There's no role for them, only for those providing service and trying to improve and broaden service by operating efficiently. In the "real world" insurance cos would play a role in a reconstituted form; they've tons of money and experience and could be major players in developing competing coalitions of providers.

Question: Do you think the state or feds should define the basics of what must be in a provider's contract? or can we "trust the market?"

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