Bad Times Spur Entrepreneurship, But There's a Catch

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100 Responses to “Bad Times Spur Entrepreneurship, But There's a Catch”

  1. zuzu says:

    Because they can’t get health insurance. America’s health-care system makes it all but impossible for an older worker to try something new.

    Which is the problem with relying on employer-paid insurance… which i why during the Presidential election, the Republican proposal to tax employer-provided health insurance made a perverse kind of sense. Because it’s precisely due to not taxing health insurance benefits, while income as cash is taxed, that significantly contributed to this severe bias towards employer-provided health insurance, rather than paying for healthcare out of pocket (at lower prices).

    Technically, another solution would be to eliminate income tax to level it with not paying tax on the health insurance benefits.

    The insurance industry is in the business of not paying claims whenever possible, after all, and health insurers are working hardest to find ways not to cover people who might get sick even as they deny as many claims as possible from people who’ve been paying premiums.

    Once again, the principal-agent problem rears its ugly head.

    That, and the fact that insurance only logically applies to catastrophes, not recurring expenses (such as checkups, vaccinations, and drug prescriptions). Just as you wouldn’t file a claim with your car insurance every time you needed to change your oil or rotate your tires.

    The day we have national health care is the day that we unleash a wave of entrepreneurship the likes of which we’ve never seen before. That’s one of the best reasons for moving toward such a system.

    This does not follow. The problem is a lack of affordable healthcare, due to medical cost inflation, created by a history of over-reliance on insurance — which ostensibly gets free money printed from the banks, who effectively have a license to print money from the government.

    So the medical-industrial complex lives in a kind of “fantasy land” where prices for medical products and services are completely divorced from reality.

    (In precisely the same way that the money Wall Street has been investing in is the same kind of money that those of us who earn and save use — ala the non-neutrality of money.)

  2. zuzu says:

    Ugh, typos have been plaguing me lately…

    (In precisely the same way that the money Wall Street has been investing in isn’t the same kind of money that those of us who earn and save use — ala the non-neutrality of money.)

    The problem with universal / socialized / single payor healthcare is the old economic calculation problem. Without price signals, producers of medical products and services won’t know how much or how little of each kind of product or service to provide in the face of scarcity. (Which is why nations with socialized healthcare have such a terrible difficulty with cost-containment and shortages of medical products and services.)

  3. hypatia says:

    While I’m a huge fan of single-payer systems such as the one we have up here in Canada, it’s not a magic bullet of entrepreneurship. We have it here, and have far lower levels of business-starting than there are in the US.

  4. Jonathan Badger says:

    “Canada’s health-care system hasn’t resulted in a higher entrepreneurship rate.” A more correct formulation of this might be “Canada’s health-care system is not enough to compensate for the many other ways in which Canadian law and custom inhibits entrepreneurship.”

    Sounds like a way to avoid discarding a failed hypothesis. If a positive link between nationalized health care and entrepreneurship is asserted, examples of countries supporting this must be provided. Just claiming the existence of “many other ways” (The heightened availability of poutine in Canada? The lack of availability of decent Mexican food there?) doesn’t cut it, because such factors could be forever generated to avoid discarding the hypothesis.

    Again, I’m in favor of nationalized health-care, but bad arguments in favor of it need to be criticized, lest they aid its opponents

  5. Anonymous says:

    If your choice is unemployment without health insurance, or self-employment without health insurance, I imagine a lot of people pick the one where they get *some* money.

  6. zyodei says:

    When people look back at our current health care system in 50 years, they will view it the same way we view bleeding and leaches today. They will probably think it is even worse.

    My friends are mostly involved in Yoga, massage, etc. etc. They are all small entrepreneus in one way or another. They are an extremely health conscious group. Vegetarian, raw, exercise frequently, etc. etc. None of them – not ONE – carries insurance. They support each other’s health, share knowledge about natural, chinese, and herbals remedies, and work to keep each other healthy. Not ONE of my friends has had any kind of major health issue in the time I have known them.

    My parents and near family are the same way – upper middle class professionals, but very health conscious. They have insurance, but don’t use it. They range from 30s to 60s, but NONE of them has EVER had a major health issue.

    As for me, well, I used to eat lots of McDonalds, soda, and whatever other awful stuff, and I was diagnosed with depression, ADD, high blood pressure, etc. Now, by changing by diet and going out in the sunlight more, I am at optimal health.

    The thing people don’t want to accept, the thing we have been conditioned for years not to accept, is that, to a great extent, we do choose our health outcomes. People have been exploding at Morgan on here, because it is generally painful to be told something like this. But it’s true. Not always, but much more than is commonly held now.

    If your auto mechanic told you that there is something permanently wrong with your car, and you had to bring it in twice a month to have the vacuum inhibitor rotated, you’d be pretty suspicious. And yet the medical establishment tells us the same thing, and we don’t question it because they present such an air of authority. And yet, they have been proven wrong, dangerously so, time and time again. 50 years ago the AMA was telling everybody that cigarettes were great for your health, and spreading the idea that doctors promoted cigarette smoking for longevity. Of course, they were receiving untold millions from big tobacco for this favor.

    If we institute a single payer system, I fear that it will crush innocation, and will enshrine the ultimately destructive and backwards medical orthodoxy for the next hundred years, when millions of people on their own are waking up, walking away from doctors and hospitals, and seeking the answers on their own.

    The #1 thing we could do to relieve the outrageous cost structure of American medicine would be to remove all licensing requirements, and replace it with a voluntary accredation system. If you have a broken arm, why do you have to go to someone who has spent 12 years in training to get a cast? This would allow for true competition in the health system, which would slowly undermine the Insurance companie’s near monopolies on primary care. Insurance would go back to being what it should be for in the first place – catastrophic illness or injury.

    On an individual level, the most important thing to do IS to take utmost care of our health. Treat our bodies like a temple. Don’t poison yourself, ever! Stay informed. Make your own decisions. Actively read a range of books and web sites on health maintenence strategies.

    Books such as “Nutrition and Physical Degeneration”, which foretold the current crisis of public health 85 years ago. Or “The Tao of Health, Sex, and Longevity,” or naturalnews.com, or so many others. Don’t believe anything without researching and maybe trying it, no matter which side of the debate it’s coming from.

  7. kpkpkp says:

    And here I thought that being employed in an uninspiring position, but having medical benefits, as enough to inspire me to do something industrious.

    Sometimes a thirst for ‘doing something greater’ is enough. The trouble when you’re fully employed (and married with children) is in finding the time to work on ‘Plan B’ while ‘Plan A’ (fulltime work and family commitment) consumes all your bandwidth.

    Complacency is a tough one to overcome, but being aware that my current employment is at the pleasure of a very large corporation, that’s pretty motivational.

  8. f45teddie says:

    @RyanH

    European socialized systems do not provide better care for less cost than our socialized system, but they are far wiser about utilization and don’t waste money flagrantly like our socialized system, Medicare. A study by McGregor from Winnipeg in Nephrology a few years ago entitled, “Decision making in dialysis” (or something like that) clarified that in the US we dialyze 225 per 100,000 population, Canada dialyzes 160 per 100,000 and the UK dialyzes 93 per the same population group. If you then look at any particular age group, they will of course be healthier in the UK because their sickest people have died. It is common for me in my practice to see State School patients fifty years old on feeding tubes, never having spoken a word in their lives, hopelessly profoundly retarded, kept alive for fifty years by around-the-clock nurses and a staff of doctors. Insanity. Socialism which allows both families and doctors to take whatever they want, and an army of trial lawyers and inspectors looking for any evidence of decline in this hopeless population ready to pounce upon a lawsuit can produce nothing but absurdly excessive care. – Doctor, Lufkin Texas

    PS. The above was written by my dad. He asked me to help him post a reply, so I created this account.

  9. zyodei says:

    One more comment, specifically related to this article. If people are already out of work, and can’t find a job…why would lack of health insurance turn them away from entrepreneurship. They already don’t have it! They are turning to entrepreneurship because they don’t have a choice! How stupid.

    This article is piggybacking an existing cause onto the present circumstances. Certainly, there is some basis to this claim – there must be some number of people out there who don’t make the switch away from the 9-5 because they need the insurance. But to assume that this number is so large that to solve their dilemma would create “a wave of entrepreneurship the likes of which we’ve never seen before.” is an unsubstantiated, pie-in-the-sky claim.

  10. RyanH says:

    @Zuzu
    I’m not sure what you are saying there. Industrialized countries with socialized healthcare (Canada, UK, Germany, France…) spend far less per citizen than the united states does currently. On the order of two thirds to half as much for the same, or better, level of service. So when you are referring to problems of cost containment what are you referring to?

  11. zuzu says:

    Perhaps the question to ask is, what are the barriers to entry for entrepreneurship in healthcare?

    Why is parallel trade of pharmaceuticals still illegal in the United States, keeping prices artificially high?

    Where’s the Google Maps based search engine for finding private practice doctors in my area who provide cash-based healthcare for reduced cost due to eliminating the overhead of filing insurance claims?

    Where’s the Craigslist-like replacement for insurance companies being the sole provider of patient referrals for medical practitioners?

    Why isn’t there more telehealth / telemedicine / cybermedicine available to reduce costs and increase health consumer choice?

  12. t3knomanser says:

    The issue with government sponsored health care, at least as proposed in the US, is it does nothing to address the fact that health care is expensive. It doesn’t reduce the costs, it just shifts them from the individual to the state (which in turn spreads it across all the individuals). It doesn’t change the fact that prescription drugs can cost tens of thousands of dollars a year. It doesn’t change the fact that hospitals can’t provide enough beds, or the expense of medical education requires staggering salaries to keep pace with the accrued debt.

    In short: state supplied health care doesn’t solve any problems, it simply conceals them. In the worst case, you end up like England, where arbitrary throttling policies are used to restrict access to health care.

    These are the problems that I come up with before even pointing out that governments are inherently immoral and injust.

    In any case, without addressing the root causes of health care costs, simply making the government foot the bill helps no one.

  13. RationalPragmatist says:

    @Zuzu:

    Any college level microeconomics course also completely discredits the cult of the free market. In microeconomics, a perfectly free market is conceived as a starting point for study and discussion. This conceptual market, upon which Libertarians have placed their near-religious faith, simply cannot exist in reality.

    In the conceptual perfectly free market, assumptions are made that there is perfect information, no barriers to entry, no externalities and participants that always act rationally. How can you possibly replicate these ideals in reality? If you can’t, then your perfectly free, perfectly efficient market cannot exist.

    How do you propose to completely and perfectly disseminate information about every manufacturer and service provider? For example, do you know the origin and history of each component of every product you buy?

    How do you overcome “natural” barrier to entry, such as market segments that are extremely capital-intensive? By natural, I mean those other than created by state regulation. For example, utilities are granted regulated monopolies because it is unrealistic to believe that another market participant could gather enough capital to create a parallel infrastructure and compete with the existing utility systems. The risk-reward analysis dictates that the capital be invested elsewhere, leaving few potential competitors for utilities.

    How do you eliminate externalities? How will you factor into commodity prices the cost of such things as environmental degradation or exploitative labor practices?

    How do you propose to make market participants always act rationally, rather than based on emotion or bias?

    Based on prior experiences, I suspect you have some answers to these questions, but none, I fear, will be reality-based.

    The Libertarian ideal is nothing more than a repackaging of Rosseau’s noble savage argument – that we would all get along in peace and harmony if it weren’t for the evil of the modern state.

    @Noen: As a social experiment, I would like to round up all Libertarians (and anarcho-capitalists) and place them on a deserted island to see if they are able to create the utopia they envision.

  14. moveitalong says:

    First, this is one of the smartest things I’ve read about medical insurance in a long time. It makes sense that health insurance would be a huge barrier to entry for potential businesspeople (especially those with families). I’m shocked that I’ve never heard anyone suggest this before now that I’ve read it here.

    As another proposal, I’ve always thought it would be smart for medical school to be free. It would be a cheaper program for taxpayers than the government paying for medical care for everyone, and doctors would no longer have massive student loans to justify exorbitant pricing. Given the benefit to society of people choosing to practice medicine, or nursing for that matter, it seems like a very justifiable program. Why should only rich or middle class people get to be doctors when it behooves us all to have anyone with the capability have that opportunity?

  15. arkizzle / Moderator says:

    f45teddie, welcome both :)

  16. zuzu says:

    @5 RyanH

    I’m not sure what you are saying there. Industrialized countries with socialized healthcare (Canada, UK, Germany, France…) spend far less per citizen than the united states does currently.

    You’re making a false dichotomy. The United States is possibly the worst example of “private” healthcare (or having the worst qualities of both) — as I’ve illustrated the problem of relying on insurance rather than the price mechanism.

    The bastardization of “insurance” for healthcare in the United States also suffers from a more Kafkaesque economic calculation problem. Medical prices do not reflect the reality of supply and demand; they reflect the collusion between bankers selling insurance and the medical-industrial complex to the detriment of health consumers — a kind of supply-side economics.

  17. zuzu says:

    Speaking of Canadian nationalized healthcare, again, here’s Dr. David Gratzer’s experience as a Canadian in medical school:

    I learned my most important lesson in medical school not in the classroom, but on the way to it. I grew up in Winnipeg, which is in the middle of Canada. It’s a city roughly the size of Indianapolis. On a cold winter day in Winnipeg, it can drop to 40 below. Needless to say, Winnipeggers are a hardy bunch, and all parking lots are outside.

    So I parked my car that February morning and walked to the classroom. I wanted to take a short cut because it was blisteringly cold outside, and I decided to cut across the emergency department as I had done before. I swung open the doors and walked in, and I discovered the emergency room overcrowding crisis that was plaguing so many Canadian hospitals in the mid-1990s. I stood there, and I remember the smell: the smell of sweat, the smell of urine, the smell of fear that hung in the air. Elderly people had been waiting four, sometimes even five days to get a bed. And I remember step­ping into that emergency room and thinking to myself, something is desperately amiss.

    When I grew up in Canada, I was interested in getting into medical school. If you had stopped me on the street when I was 16 or 17 and asked me about the Medical College Admission Test, I could have given you a variety of very satisfying, unique statistics on admission and so on. I didn’t give a lot of thought to health policy. When managed care was debated in the United States, I remember vaguely thinking there was something good about the idea: After all, government should be involved in health care. I had never even been to Washington, D.C.

    But when I stepped into that emergency room, it got me thinking. Again, I was a Canadian. There are three things I absorbed from that environment: One was a fondness for ice hockey, the second was an ability to convert Fahrenheit to Celsius in my head, and the third thing was a belief that if the government did it when it came to health care, it must be compassionate.

    Eventually, I began to think about these things. In Canada at the time, there were really two schools of thought with regard to health reform. There were the people who thought we should spend more–I like to call them the spendthrifts–and the people who thought we should just hire more administrators and make the system work better–I like to call them the magicians. I started to think about these things, and I became a spendthrift, and then I became a magician, and then I became agnostic, and eventually I became an atheist on health policy in Canada because I realized there was something going on which was much more fundamental: that there was a problem with a government-run system.

    Maybe it was just the experiences I had, seeing a patient who had a minor hernia repair and a neu rofiber was caught and needed to be referred to a pain clinic; unfortunately, there was a two-year wait list. A gentleman with the classic symptoms of sleep apnea needed to go to a sleep disorders clinic and get a test: three-year wait list. My father, who could barely walk–classic symptoms of spinal stenosis–was told he needed an MRI and told he should wait eight or nine months.

  18. morgan says:

    Take Care of Your Own Health!!!

    Why rely on the government to be there when you get sick? It’s a bit like relying on credit when you run out of money.

    Sure, if one encounters some traumatic accident – health insurance is good, no question.

    But eat healthy, be active and you will gain *assurance* that you can take care of your own body. You want health insurance – go vegan or raw, learn about natural medicines.

    If one has the entrepreneurial spirit – use that spirit and energy for your health as well.

  19. zuzu says:

    Why should only rich or middle class people get to be doctors when it behooves us all to have anyone with the capability have that opportunity?

    Because the AMA is a union that seeks to maintain artificial scarcity in the supply of doctors to keep their wages artificially bloated and “protect” their “professional” clique at the expense of everyone else.

  20. Oceanconcepts says:

    I’m an entrepreneur, I haven’t worked for anyone else since 1985, and have started several businesses in that time. Right now I am on the cusp of introducing a new product that has been in development for seven years (pretty specialized embedded systems), I haven’t paid myself for five years, I’ve put everything I own into the project, and have taken on personal debt. I’m pushing 60. So I know about entrepreneurial risk- I wonder how many of those (#17, 23) making the “real entrepreneurs don’t think about risks, they just do it” posts really know whereof they speak. You’d be an idiot not to be very concerned, and if you had health problems or a child with a chronic condition, then you might not be able to get coverage at all. For some, it is an insurmountable barrier.

    I have long said that the lack of affordable, guaranteed available to all health care is the single biggest impediment to entrepreneurship in this country. Far more of a barrier than taxes or regulations. Countries like Canada or the UK with universal health care may have other impediments to entrepreneurship- universal healthcare is not a sufficient basis for a healthy entrepreneurial sector. The US gets many things right, but the employer based/ private insurance system is not one of them. We pay more, and have worse outcomes. Other countries. like France, have health care systems that are popular with their citizens, cost much less, are reasonably efficient, and provide better outcomes by any reasonable metric.

    It’s one thing to start a new enterprise when you’re 20-something with few responsibilities and significant working life ahead of you, something else when you’re older. Many of us with valuable experience would be ideal entrepreneurs, but lack of health care could spell financial (or literal) suicide.

    @18, ZUZU Would it really be so strange if medical products and services were sold just like every other commodity: food, clothing, shelter; plumbing, electricians, car repair; etc. ?

    Not all commodities are created equal. There is lack of full information for health care consumers (which can be improved, but not eliminated), and there are externalities- other people’s health decisions can have an effect on me. How much comparison shopping do you do when your 4 year old child awakes at 3:00 AM with a high fever, fainting from abdominal pain? Check to see what doc offers the best price? Are we happy if the guy sharing the sidewalk (with the persistent cough) exercised his economic freedom of choice and didn’t go the the clinic to treat that drug resistant TB? Some things we can decide are public goods- clean water, police/ fire protection, airline regulations, and public health, among many others. Solutions are always imperfect, but for all the FAA’s flaws I am more comfortable flying than I would be without them. Unregulated free markets can produce bad outcomes- often when businesses are willing to risk a small-probability but potentially catastrophic event (financial meltdown, poisoning a customer, chemical plant blowing up) in favor of the certainty of profits now. For most businesses most of the time that can be a rational choice, but it can be bad news for those downstream from the disaster. I LIKE having a government that at least makes an attempt to institute fair and equitable regulations to protect against disaster- and yes, there is a cost, and I’m willing to pay. How much? That’s why we have a political process, to figure that out.

    As a side note, insurance has historically helped to expand trade/ economic activity/ risk taking. If we each have to hoard a lot of cash to protect against potential disasters- health related or otherwise- that sucks away capital that could be used to build things. If we collectively decide to insure each other, we each have less risk individually. Of course, containing costs and rationing care are issues that most be dealt with- but there are issues with every solution. Except Utopian solutions.

    @51, RATIONALPRAGMATIST As a social experiment, I would like to round up all Libertarians (and anarcho-capitalists) and place them on a deserted island to see if they are able to create the utopia they envision.

    Nigeria comes pretty close- lots of resources, not much government. Of course, you need to bring your own infrastructure (and a security force would probably help).

  21. Bloo says:

    A point I hadn’t considered before about entrepreneurship being linked to health and insurance.

    One point I’d like to make that I don’t see covered very often at all:

    In recent memory, charges for medical things in the US don’t go up or down based on competition. They go up or down based upon what insurers, whether private companies or Medicaid, are willing to pay.

    If insurers decide they will pay $50 for an office visit, pretty soon it’s nearly impossible to find an office visit for less than that. People who are insured aren’t hurt by it – after all, the insurer pays – but it hurts those who aren’t insured or are underinsured.

    What insurers are willing to pay is determined not through competitive sales to medical consumers, but rather through a set of (complex) negotiations between the insurers, the doctors, the hospitals, the pharmacists, and other medical providers: in other words, what you are charged is totally determined by those with a profit interest.

  22. zuzu says:

    How do you propose to completely and perfectly disseminate information about every manufacturer and service provider? For example, do you know the origin and history of each component of every product you buy?

    You’re invoking the perfect solution fallacy.

    I’ll turn that around by asking you what system communicates dynamic economic information more effectively than the price system? It’s not perfect, but it’s the best possible. Hence, again, the economic calculation problem.

    How do you overcome “natural” barrier to entry, such as market segments that are extremely capital-intensive? By natural, I mean those other than created by state regulation. For example, utilities are granted regulated monopolies because it is unrealistic to believe that another market participant could gather enough capital to create a parallel infrastructure and compete with the existing utility systems. The risk-reward analysis dictates that the capital be invested elsewhere, leaving few potential competitors for utilities.

    Actually, before the Universal Service mandate, dual-service telephone systems were popular and robust.

    How do you eliminate externalities? How will you factor into commodity prices the cost of such things as environmental degradation or exploitative labor practices?

    Ronald Coase addressed this in The Problem of Social Cost. The issue there is insufficient enforcement of existing property rights, such as through tort law.

    How do you propose to make market participants always act rationally, rather than based on emotion or bias?

    Again, market actors don’t have to act perfectly rational, and I think there’s actually much that can be learned from behavioral finance and bounded rationality that could advance the study of human action. Greater problems emerge, however, with systems that attempt to use government force “correct” for these biases and limits — the cure is worse than the disease.

  23. Takuan says:

    Canada may have medicare, but getting money to start a small business has always been difficult there. A banking system firmly rooted in the 19th century and an economy traditionally dominated by a handful of large corporations is why so many Canadian entrepreneurs went to the USA. That and a market ten times larger.

  24. TheMadLibrarian says:

    Morgan, not all conditions can be fixed by the ‘magic bullet’ of any one lifestyle, vegan, holistic or otherwise. I personally try not to overrely on going to my doctor, but am very happy he is available when I have one of my rare allergy attacks or when I broke my wrist after falling off my bicycle. Eating properly and exercising are good ideas, but no substitute for the _safety net_ of insurance.

  25. noen says:

    I’m agreeing with Dan on this one. National healthcare, while not perfect, would go a long way to enabling positive changes in the US. I think people have seen enough of Zuzu’s extremist Libertarian cant to understand it is based on an imaginary reality that will never work.

    Making health care for all a reality
    Health care for America now

  26. Anonymous says:

    That’s a factor for some people, but entrepreneurs tend to be a different breed, even if they’re new to the game.

    In most cases, health insurance (in its current state in the US) is only truly helpful in extreme situations, emergencies and the like, or if you want to have children.

    Certainly it’s not a great situation, and not a nice choice. However, we are all going to die. If you have a chance to create something exciting, to do something you love as your work… well that seems like a pretty easy decision.

    Seems to me we’re coddling ourselves with health insurance “necessities” more often than not.

  27. zuzu says:

    And good luck on performing your own appendectomy. Make sure to upload the video to YouTube.

    Body modification enthusiasts are already familiar with clandestine surgery. (e.g. BMEzine [NSFW])

  28. jimmitude says:

    I won’t jump into the gov healthcare issue per say, but I’ve never seen an entrepreneur scuttle an idea because he/she couldn’t get health care. Compared to the other problems and risks this usually doesn’t make the top ten list. I can see the point that someone who might start up a company when he’s gotten laid off or is otherwise between jobs might not want to continue if a half decent ‘big company’ job comes along, but most entrepreneurs I’ve worked with are already convinced that in five years, they will be the ‘big company’ and they’ll have people to handle these sorts of things.

    Plus, as a public service, if you’re trying to go out on your own but things like insurance are holding you back, offer to work for a local University for one dollar a year in exchange for plastering their name on all the research and marketing stuff you do. You may have to pay for your insurance, but it’ll probably be waaaaay cheaper than buying it on the so called free market. (I paid $99 a month at the college versus $199 a week (!) when I worked for a small research company.)

    If you aren’t willing to approach a college with this idea, you might want to rethink going out on your own.

    Later

  29. zuzu says:

    based on an imaginary reality that will never work.

    Please explain, in step-by-step chain of causal relationships, why “that will never work”.

    Would it really be so strange if medical products and services were sold just like every other commodity: food, clothing, shelter; plumbing, electricians, car repair; etc. ?

    Only an extreme minority of the population cannot afford food, clothing, and shelter. Yet the vast majority currently rely on “insurance” because medical cost inflation has priced medical products and services out of their reach. It’s a state of affairs as if we all relied on “insurance” for our food, our clothing, and our housing. Or, if people were clamoring for nationalized production of food, clothing, and housing — because a pizza costs $1000, a shirt costs $5000, and a house costs $3 billion.

    Yet that’s precisely the bizarro world of medical pricing we find ourselves in. (The salient questions are: How precisely did it become this way? What does answering that question then inform us about what to change?)

  30. jcull says:

    Two things:

    If you don’t have a job, you aren’t likely to have health insurance, so I don’t know that the lack of health insurance is a barrier to the unemployed potential entrepreneur.

    And. . .

    The only way to fix health care is to first make it non-profit. As long as there is money to be made, there will be people to exploit the system every way they can, at the cost of the patient.

  31. noen says:

    RationalPragmatist asks Zuzu “How do you propose to…”

    To which Zuzu replies, “By quoting from Wikipedia of course. Pwnd!!”

    It’s kind of sad…..

  32. RationalPragmatist says:

    But not unexpected…

  33. zuzu says:

    The only way to fix health care is to first make it non-profit. As long as there is money to be made, there will be people to exploit the system every way they can, at the cost of the patient.

    Just as you’ve been exploited by everyone who’s ever sold you all the stuff you have? Your food, your clothes, your housing, your car, your computer, your internet access, etc.? Those were all guided by for-profit motives — that’s how those producers knew where to target their efforts for return on investment (i.e. to satisfy the most urgent needs).

    Your life depends on being able to eat. Is every grocery store and restaurant “exploiting” you with their for-profit motives?

  34. NoFixedAbode says:

    Check out the bong on the shelf behind jellyfish-entrepreneur-guy.

  35. noen says:

    Why I Am Not an Austrian Economist

    Bryan Caplan

    Assistant Professor
    Department of Economics
    George Mason University

    ——-

    I do not deny that Austrian economists have made valuable contributions to economics. Rather, as the sequel will argue, I maintain that:

    (a) The effort to rebuild economics along foundations substantially different from those of modern neoclassical economics fails.

    (b) Austrian economists have often misunderstood modern neoclassical economics, causing them to overstate their differences with it.

    (c) Several of the most important Austrian claims are false, or at least overstated.

    (d) Modern neoclassical economics has made a number of important discoveries which Austrian economists for the most part have not appreciated.

    Given this, I conclude that while self-labeled Austrian economists have some valid contributions to make to economics, these are simply not distinctive enough to sustain a school of thought. The task of developing an alternate Austrian paradigm has largely failed, producing an abundance of meta-economics (philosophy, methodology, and history of thought), but few substantive results. Whatever Austrian economists have that is worth saying should be simply be addressed to the broader economics profession, which (in spite of itself) remains eager for original, true, and substantive ideas.

    ——–

    Not that it will help.

  36. J France says:

    Franka 645:

    I second that question – how did this system come into place?

    And your earlier point – I live with nationalised health care, we have a public and a private system.

    Everyone, by default, is covered by MediCare – even if you have private health. But there are wait times for some services, and it can be argued that public hospitals aren’t as nice as the private – even if they are just as proficient, and in some cases superior.

    So if you have private, you don’t need to go to the public. You can still pay through the nose (but not 100k for heart valve surgery, yikes!) and get treated up front, if you like.

    The two systems don’t have to be mutually exclusive.

  37. zuzu says:

    Sorry, do you consider my answers to your questions were in some way insufficient or dismissive? Do you have actual retorts to my retorts?

    What was your purpose in asking those questions if not to engage the subject and hopefully clarify the critical thought process of rigorously understanding these non-trivial issues?

    Or is the genetic fallacy just the last refuge of a scoundrel?

  38. Cloo says:

    When my father found himself out of work, nearing 60, he spent about a year looking for work before starting up his own small business (in Canada). It wasn’t his first option, but it WAS an option, and it certainly wouldn’t have been if he had had to worry about paying for health care (which at his age, is an absolute necessity). Universal health care actually solves a very real problem with older workers in today’s society, where companies no longer think twice about letting someone go who is nearing retirement (and indeed, that saves a bit of money), and ageism keeps you from getting a new job.

    Is he going to be the next RIM (ahem, research in motion)? Hell no, but there are tons of successful small and mid level businesses that are at least possible when people don’t HAVE to find a job that comes with health care attached.

  39. Roger Stanton says:

    Take Care of Your Own Health!!!

    You may be in perfect health right now and that’s great. So was my son. Then at 19 we found he had a defective heart valve. No amount of exercise, vegan dieting, etc., was going to cure him. He had to have an operation, which would cost in the neighborhood of $100,000.

    Fortunately I have health insurance and the operation was covered.

  40. zuzu says:

    Why I Am Not an Austrian Economist by Bryan Caplan … Not that it will help.

    Actually, thank you for bringing this to my attention. I’ll read it and consider the arguments.

    Thanks again!

  41. Roach says:

    The government is also in the business of keeping costs down. Medicare and Medicaid serve as the perfect example of this – they turn down claims even more quickly than most insurance companies. There’s only so much money, and unlike insurers (whom I dislike too, but that doesn’t change this fact) the government wastes much more of its money on useless bureaucracy. Government healthcare will only replace many insurers, who were at least forced to compete at times, with one big insurer which won’t be competing at all.

  42. Anonymous says:

    America’s health-care system makes it all but impossible for an older worker to try something new.

    How ridiculous. The article is about entrepreneurs and the entrepreneurial spirit. Entrepreneurs don’t make excuses, they make things happen, they overcome obstacles. If you believe a health-care system is the thing holding you back from success, keep job hunting – you’re not an entrepreneur!

    • Antinous / Moderator says:

      If you believe a health-care system is the thing holding you back from success, keep job hunting – you’re not an entrepreneur!

      Thanks for condemning everyone with underlying health problems to work as wage slaves. Being an entrepreneur should mean taking financial risks, not risking one’s life.

  43. zuzu says:

    Fortunately I have health insurance and the operation was covered.

    Fortunately you secured the ability to afford healthcare before choosing to have a son to begin with… being a responsible parent and all.

    Heart valve defect is a legitimate catastrophe, so health insurance applies in this case. (Yet, even for a complicated surgery, I suspect that $100k is a bloated number.)

    This is not the same topic, however, as seeing a general practitioner for a checkup, getting a CT scan or MRI or blood work analyzed, or affording prescription drugs.

  44. zuzu says:

    but there are tons of successful small and mid level businesses that are at least possible when people don’t HAVE to find a job that comes with health care attached.

    Again, why should this question be framed as if nationalized healthcare is the only alternative to employer-provided healthcare?

    What about consumer-based healthcare as another alternative?

    What about ending the protectionism, subsidies, and bureaucracy that’s made healthcare products and services so artificially expensive to begin with?

  45. Bob Rossney says:

    Sounds like a way to avoid discarding a failed hypothesis. If a positive link between nationalized health care and entrepreneurship is asserted, examples of countries supporting this must be provided.

    “We should go to the movies.”

    “I’d like to go to the movies, but I’m on fire right now. Could you please dump a bucket of water on me?”

    “What makes you think that dumping a bucket of water on you would make it easier for you to go to the movies?”

    “I’m on fire.”

    “What about last week when we went to the movies? You didn’t seem to want a bucket of water dumped on you then.”

    “Last week I wasn’t even smoldering yet.”

    “You know, when we dumped a bucket of water on George it just pissed him off. He didn’t even want to go to the movies after that.”

    “I’m burning to death.”

    “It just makes sense. Nobody wants to go to the movies in wet clothes. We dumped a bucket of water on Phil and he just wanted to sit next to the fire until he was dry. If we dump water on you, you’ll just end up doing the same thing.”

    “Please. Oh, God.”

    “No, this whole water/movies connection is too tenuous. You should really formulate better arguments.”

  46. morgan says:

    @ Antinous / Moderator

    That link was not to my blog, I’m not Mark Pesce (the co-creator of VRML…) ;)

    Anyway

    The medical community has no clear, definitive, known cause for Appendicitis, however here are some causative agents; such as foreign bodies, trauma, intestinal worms, and lymphadenitis, the occurrence of an obstructing fecalith has attracted attention. The prevalence of fecaliths in patients with appendicitis is significantly higher in developed than in developing countries[5], and an appendiceal fecalith is commonly associated with complicated appendicitis[6]. Also, fecal stasis and arrest may play a role, as demonstrated by a significantly lower number of bowel movements per week in patients with acute appendicitis compared with healthy controls[7]. The occurrence of a fecalith in the appendix seems to be attributed to a right sided fecal retention reservoir in the colon and a prolonged transit time[8]. From epidemiological data it has been stated that diverticular disease and adenomatous polyps were unknown and colon cancer exceedingly rare in communities exempt for appendicitis[9][10]. Also, acute appendicitis has been shown to occur antecedent to cancer in the colon and rectum[11]. Several studies offer evidence that a low fiber intake is involved in the pathogenesis of appendicitis.

    Long story short, it appears that Appendicitis has a lot to do with keeping your colon, intestines, digestive system clean.

    Again I’m talking prevention – which, at the most basic – leaves more room, more money, more attention, more beds, more time for those who really need it, when they need it.

    I’m in Canada, my Mother is a nurse. I’ve heard all sorts of horror stories, I know the wait times can stretch into days, I know people actually die in the waiting rooms, I know that there are not enough beds, I know that patients are stacked up in the hallways, I know that staff are dangerously overworked, I know that mistakes get made so often it’s scary (oh you meant remove that organ, oops!)

    It amazes me how much flack I’m taking here for suggesting people look after themselves. Seriously folks – Hospitals are overpopulated, staff is overworked and a very large percentage of those people in Hospitals need not be there.

    I’m not talking about fixing your broken arm with glue or DIY heart transplant or backyard neurosurgery.

    I’m talking about being responsible with your own health, life and body so that you don’t need that colonoscopy, that triple bypass, that tumor removed because it doesnt pop up in the first place- These things are preventable.

    Then, should you break your leg or some similar emergency occurs – go to the freakin hospital! And maybe you’ll get proper treatment.

  47. Jonathan Badger says:

    @Bob There’s plenty of documented examples of water being used to put out fires, so your example doesn’t make any sense.

  48. Anonymous says:

    There always seems to be many half truths and horror stories around health insurance, it does not match my experience. I am a 55 year old entrepreneure, I have been in business for 7 years, the first 12 months on COBRA, the next year on a cheap plan, but we never used it, 2 years with no plan (kinda stupid), then we went with a national firm with a $5,000 dedutable and HSA. They excluded prexisting conditions, luckily nothing serious, but 12 months ago I was diagnosed with Prostate Cancer. Yes we paid $5,000 from our HSA towards the deductable, but the surgery and treatments were 100% covered after that, no guestions, no issues. Our policy cost $500 per month, whch is cheep compared to the cost of the surgery.
    I do not provide health insurance to my employees, but I do contribute towrds their plan if they prove to me that they have a policy, still many of them will not even get on the spouses plan, all to save some money.
    The main example I can think of is where I had a employee who was not on his wife’s policy, ruptered appendix, in the hospital 2 weeks, $40,000+ bill, yet rather than pay for insurance he has cars that were 1-2 years old, flat screen TV’s, the latest computers for himself and his kids, Blackberries for the entire family. It comes down to choices, and it seems that many would rather pay for toys than insurance.
    I do not believe this is the fault of the insurance industry, the health care providers, or the government, it is a choice that people make, I have not had the problems that many people describe, yet I can not be the only one who could find health insurance, had a major health issue, and was able to get through it without a catastrophe.
    We need a way to educate people how to do this, how do you get insurance, how do you know if it is a plan that fits your needs, what are your options, and how do you run your business to make it profitable enough to pay for it.

  49. eclectro says:

    Thanks Dan for pointing out a critical issue that needs addressing, though the countless pro-business (and healthy) types will do everything in their power to put off reform. I am not encouraged.

    @#10 Morgan

    Take Care of Your Own Health!!!

    This is the kind of rank ignorance and insensitivity that simply has not dealt with a troublesome health issue of their own, hence it’s a “non-issue” for them and they would rather have the sick people shut up and go into a corner and die already. Which, ironically, ends up happening as people being devastated by out of control costs are wiped out and can’t pay.

    @#18 ZUZU

    Your life depends on being able to eat. Is every grocery store and restaurant “exploiting” you with their for-profit motives?

    Why is it that health care was largely non-profit in the sixties/seventies (and before)? Also, how is it fair that a sick person (who will never ever be able to get health insurance) have to pay 5-10 times the cost as some insurance company does? It would like be going into a supermarket and because you are hungry, you have to pay 5 timnes as much as someone who is not hungry and has coupons that only he could get. Why should healthcare only be given to people who can be employed?

    Another thing Dan, I have been unemployed, and being middle-aged I really think I am being descriminated against for this reason. Many companies have “self-insurance” federal policies (another whole issue) to where they would rather hire a twenty something with no experience rather than face the possible medical costs of me being on their rolls. Get health insurance out of the workplace and you lower the jobless rate. Obama is very right when he says this needs to be addressed immediately. Largely being a social conservative, I find this refreshing. I am truly disapointed that the Republican party under the banner of “compassionate conservatism” (code words for we’re going to sweep problems under the rug so people can forget about them) failed so miserably (as they intended to) at even mentioning these issues outside of the state of the union address. Stunning really, I truly hope the GOP is dismantled. Really, I do.

    Beyond that, this thread exemplifies the obstacles that an uncaring and uniformed citzenry is creating for those who happen to need to go to a doctor.

  50. Anonymous says:

    I wish it was as simple as this. Unfortunately Medicare and Medicaid pull the same sort of BS that Mr. Gilmor eludes to by quasi-private health care companies. You may be “covered” by Medicare but it doesn’t end the worries nor the problems. Those institutions along with others like the VA play many if not more games than the insurers Mr. Gilmor mentions.

    And of course Mr. Gilmor fails to mention that there are solutions to address this issue that don’t involve total government takeover of the system. Many states offer insurance plans for those who can’t get them on their own.

  51. Jonathan Badger says:

    I’m all for nationalized health care (I worked for a time in Canada and discovered that health care there wasn’t any worse than it is in the US, and I didn’t have to worry if something was “covered” or not), but the idea that nationalized health care has anything to do with entrepreneurship is bizarre. With the exception of Rhythm in Motion (the Blackberry people), I can’t think of a Canadian startup that made it big time. Canadians and Europeans *leave* their countries to come to California to create startups.

  52. noen says:

    Zuzu
    “Please explain, in step-by-step chain of causal relationships, why “that will never work”.”

    Libertarianism is not a science, it is a utopian political ideology. In economics we can, at best, submit policy proposals to a real world pragmatic test. Does it work or doesn’t it? Does the policy have unintended side effects and if so can we moderate them with appropriate measures? What are our goals and objectives and how does policy A help us to achieve those goals?

    Libertarianism (including the Austrian school, which is a subset) does none of these things. It more closely resembles religious fundamentalism in that it proposes several Absolute Truths which are believed to govern all of Reality. They are economic creationists and have failed to convince very many people of the “Truth” they believe in.

    The best antidote is to simply take any college level course in macroeconomics or if you like:

    Some Fallacies of Austrian Economics by Robert L. Vienneau. Also good is Daniel Davies (D-Squared) who also posts at the most impressive Crooked Timber.

    “Would it really be so strange if medical products and services were sold just like every other commodity”

    Health is not a commodity. People are not machines and should not be treated as though they were. I agree with you that the market for medical products and services is hopelessly borked. That doesn’t really work to your favor though because it shows that we do not have a free market and it’s unlikely we ever will. There are powerful forces who have an interest in keeping the system broken and your belief that one can just wave one’s hand and those interests will voluntarily give up their billions is a little unrealistic.

    We all make assumptions and then proceed to act as if those assumptions were true. When reality inevitably intrudes and falsifies those assumptions (re: the collapse of the global economy) the sane response is to re-examine them and make changes. Ideologies like Libertarianism do not do that. Typically they believe if they just yell louder The Real will go away. It won’t.

  53. Bob Rossney says:

    Long story short, it appears that Appendicitis has a lot to do with keeping your colon, intestines, digestive system clean.

    Long story short, no, it bloody well doesn’t.

    It amazes me how much flack I’m taking here for suggesting people look after themselves. Seriously folks – Hospitals are overpopulated, staff is overworked and a very large percentage of those people in Hospitals need not be there.

    A very large percentage, you say. How large?

    Here’s the thing. Preventing illness doesn’t significantly lower health care costs.

    This sounds counterintuitive, but it’s so. 80% of the health-care expenditures that the typical American will ever make come at the end of his life. This comes whether you spent your life jogging and drinking wheatgrass juice or washing down burgers with bourbon. And end-of-life care is not any cheaper for healthy people than it is for the unhealthy. Unhealthy people get sick sooner. Healthy people stay sick longer. The use of health-care resources is not significantly different.

    If that’s so, why does an HMO like Kaiser Permanente, say, put so much emphasis on prevention? Well, not to be crass, but Kaiser would much rather its customers have their expensive life-ending illness at 65 or 70, when they’re covered by Medicare, than at 55, when they’re covered by Kaiser.

    Don’t get me wrong: prevention makes good sense for the individual. But it’s not in any way something that’s going to fix the nation’s health-care system.

  54. wolfiesma says:

    Not that pot is the answer to everything, but aren’t the legal marijuana dispenseries essentially start-up businesses by doctor/entrepreneurs? Medicine people can afford without insurance?

    Lately, I’ve been taking medical appointments at local clinics that charge a modest fee for access to a doctor. (Not one who can prescribe pot though, gom dangit.) These clinics tend to be open late at night and work well for immediate access, an alternative to the emergency room for non-catastrophic issues.

    In college and for some years after I didn’t have insurance and used Planned Parenthood for routine medical care. You paid on a sliding scale and access was never an issue. How do they get their funding? I’m guessing a combination of local, state and federal funding, corporate underwriting, small patient fees. It was a tremendous benefit to the community. Free birth control, STD testing and treatment. Why shouldn’t that be available in every neighborhood?

    Anyway, local clinics seem like a good solution for out patient care. How to fix stay-in hospitals, though, I really have no idea.

  55. franka_645 says:

    I was all for nationalized heath care.

    A few years a ago, I had my tonsils out, uninsured. Last year in September, I broke my ankle, uninsured. Of course I was for nationalized health care, I couldn’t afford it! However, after looking into systems like Canada’s, I heard (just heard, I don’t really know) that they are stricken with long wait times. In the U.S., with enough money, you can been seen and treated almost immediately. The trick here, of course, is only if you have money. I, however, waited in the Highland Hospital of Oakland’s ER for 9 hours with a sideways foot. You get what you pay for. I got free surgery eventually, after proving that I was indigent, but I suffered for it.

    But isn’t having the freedom to choose where you get your service a great part of the U.S.? Or, on the other side, if you work in health care are you condemned to work for the government? No more health care entrepreneurs?

    I think Kaiser Permanente has a good system. Began by an entrepreneur, Dr Sidney Garfield, they run hospitals and insurance in the same company. Hospitals get paid the more services they perform, and can actually make more money by keeping you unhealthy (however I have never heard of this). When tying insurance to them, hospitals have a reason to keep you healthy. Kaiser also has a Medical Financial Assistance program, for people who actually cannot afford to be a member. So, if you buy toys like #26′s employee, you don’t qualify, and are s.o.l. for making a terrible decision.

    Health care is fully 1/6, or 16%, of America’s economy, according to Kaisers C.E.O. Dr. Robbie Pearl. This probably included drug companies as well, but thats one huge government if we were to nationalize it. Not that thats all bad.

    Don’t get me wrong, I’m all for nationalizing if we really can’t fix this mess and find a way to insure every last American. I had a terrible time uninsured, and nationalization would be a great way to even out the playing field for everyone, employed or not.

    How did we end up giving health care as employment benefits in the first place?

  56. franka_645 says:

    I missed one point, it’s all about preventative care.

    @ #8, yes! drug companies are the worst offenders, no?

    @ #13, I heard that the government sets the prices through what they are willing to pay for Medicaid and Medicare services, and they insurance companies follow suit. However, if the provider bills you, it can be considerably more than what the govt can settle for.

  57. Bob Rossney says:

    What about ending the protectionism, subsidies, and bureaucracy that’s made healthcare products and services so artificially expensive to begin with?

    If we nationalize health insurance we probably don’t need to nationalize health care. Nationalized health insurance addresses all of those issues. I mean, assuming we don’t all become vegans and our health care system reforms itself because nobody ever gets sick or dies anymore.

  58. Ian Holmes says:

    Zuzu @18

    as if we all relied on “insurance” for our food, our clothing, and our housing.

    After a fire, we generally do. This is really bizarre: you apparently don’t think insurance is a valid mechanism for aggregating small probabilities. But insurance has been around since ancient Babylon, and health insurance is ~160 years old. What’s your magic bullet?

    Or, if people were clamoring for nationalized production of food, clothing, and housing

    Seriously, what alternate history are you living? People HAVE clamored for national subsidy of all of those – that’s why we have things like the USHA, food aid, etc. Somehow it didn’t cause the socialist catastrophe that you seem to be predicting.

    I am starting to think the charges of libertarian extremism are justified… the way you dismiss all counter-arguments as not being true examples of what you actually have in mind… that’s kind of a giveaway. It’s like the SWP-ers who insist that true communism has never actually been tried. Well, maybe not; perhaps because it’s a pipedream?

  59. zuzu says:

    Why is it that health care was largely non-profit in the sixties/seventies (and before)?

    Wait, are you talking about the same timeframe that Richard Nixon gave his blessing to the creation of HMOs?

    Also, how is it fair that a sick person (who will never ever be able to get health insurance) have to pay 5-10 times the cost as some insurance company does?

    Huh? What insurance companies pay the hospitals and drug companies? Or the premium you pay the insurance company? It seems you’re citing the former by speaking about the latter.

    Beyond that, this thread exemplifies the obstacles that an uncaring and uniformed citzenry is creating for those who happen to need to go to a doctor.

    Hey, I just want to pay my $100 for a consult just like I would a plumber, electrician, or car mechanic. Maybe I’ll pay another $50 to get blood analyzed, and whatever the least expensive global generic price for whatever drug I need (via parallel trade).

    Bureaucracy in healthcare is quite literally deadly.

    Health is not a commodity.

    Health products and services certainly are, in as much as cars, clothing, and food are.

    People are not machines and should not be treated as though they were.

    Your body is an organic machine, whether you like it or not. Human exceptionalism is not reality-based.

    The best antidote is to simply take any college level course in macroeconomics

    Macroeconomics is just rebadged Keynesianism. What about “any college microeconomics” course? I’m pretty sure all of the Austrian School economic theory can be derived consequentially (i.e. causally) from microeconomic theory. (Hence their “teaching aid” of “Crusoe economics”.)

    There are powerful forces who have an interest in keeping the system broken and your belief that one can just wave one’s hand and those interests will voluntarily give up their billions is a little unrealistic.

    Actually, a significant portion of what I do as a knowledge worker is working towards empowering everyone else with equivalent ability in health informatics and what’s been called “DIYbio“. Just as Lee Felsenstein ignited the personal computing revolution inspired by Ivan Illich’s Tools for Conviviality, expect another such revolution in crowdsourced biotechnology and medicine. In 20 years, in silico high performance drug discovery will be as commonplace (and politically charged) as Free Software development was in the 1990s. (Right now it’s more like the academic BSD microkernel experimentation at Berkeley in the 1980s.)

    There’s a lot of truth in the adage, “Cypherpunks write code.” (i.e. direct action, technological determinism)

    c.f. Computer Lib, Augmenting Human Intellect: A Conceptual Framework

    When reality inevitably intrudes and falsifies those assumptions (re: the collapse of the global economy) the sane response is to re-examine them and make changes.

    Yes, perhaps it’s finally time to attempt Libertarian monetary policy, instead of the failed god of Keynesian inflationism. i.e. Stop causing the boom-bust cycles.

  60. zuzu says:

    If we nationalize health insurance we probably don’t need to nationalize health care. Nationalized health insurance addresses all of those issues.

    No, nationalized insurance does precisely the opposite. That’d be the one thing that could actually take this broken system and make it worse.

    Government, via banks / insurers, funneling money into the medical-industrial complex, causing massive medical cost inflation (i.e. bubble) is already the problem!

    Now you want government to overtly legitimize that whole process???

  61. Ian Holmes says:

    Franka_645 @32 & @33:

    yes, I have experienced longer waits in the UK, but there are plenty of pluses too. There is infinitely less paperwork, for example, and no trick questions like “did this problem start at work?” (for US immigrants: never, ever answer yes to that question, unless you want to be shunted off to whatever clinic they run at your workplace)

    There is also far more continuity: most HMOs in the US feel like factory conveyer belts, and doctors have few opportunities to follow up; on the other hand, private practices tend to have inefficient and fragmented information systems, and often drop the ball.

    Most of the advantages of HMOs like Kaiser apply even more to large, govt-sponsored systems like the UK’s NHS. For example, the larger the system, the clearer the incentive to provide preventative care.

  62. zuzu says:

    How did we end up giving health care as employment benefits in the first place?

    According to David Gratzer, M.D.:

    How did this come about? Wage and price controls during the Second World War. Everyone knows the story about price controls. Perhaps some of the older members of this group have lived through it; perhaps you simply heard stories from your aunt or grandmother talking about rationing butter and so on. Everyone remembers the price controls, which were quickly abolished; few remember the consequences of wage controls. Employers all of a sudden needed to attract employees but couldn’t offer better wages. So they started to offer benefits, and in particular, they offered health insurance, something employers really hadn’t done before the Second World War; and what was a fringe benefit initially became the mainstay of private insurance for Americans after October 26, 1943. All of a sudden you could entice employees with health insurance.

    Why did that make sense from an employer’s point of view? Wage controls. Now you could offer them a benefit in pre-tax dollars; you got around wage controls. But for employees, it was also a good deal. Think about it: If your boss offers you $1,000 in bonus, how much are you really going to take home? Depending on what the marginal tax rate is, depending on your bracket, you might only take home $500. But he offers you $1,000 worth of health insurance, and you could potentially take home $1,000 worth of benefits. That is why, well into the 1970s and ’80s, employers offered health insurance and lots of it; why sunglasses, marital counseling, hair transplants were all at one point in time covered by health insurance. All of these things are important, but they aren’t really insurance as we understand it in other aspects of the economy.

  63. morgan says:

    @Bob Rossney

    “Long story short, no, it bloody well doesn’t.”

    So then, what does it have to do with?

    “A very large percentage, you say. How large?”

    Heart disease, atherosclerosis, cancer, colon cancer, diabetes, osteoporosis, hypertension, stroke, high blood pressure, high cholesterol levels, kidney disease, kidney stones are just some of the diseases related to poor diet.

    Here’s some examples, these people, btw, are well known, their cases well documented:

    Father Igor at age 38 had developed hyperthyroidism with white hair, insomnia, fatigue, heart rate of 150 and a progressing arthritis. He was advised to have radioiodine therapy. Igor began the raw food diet and in a few months all his symptoms were gone.

    Daughter Valya had been ill from infancy and developed asthma at age 9 with fatigue. On the raw diet her asthma disappeared as did the fatigue.

    Doug Graham DC grew up taking antibiotics. He had nasal tubes to drain his sinuses and was annoyed by severe dandruff and a progressive spinal arthritis. At age 23 he already had severe changes of osteoarthritis in neck xrays. At age 25 he started a raw food diet. Within 3 years all his symptoms had disappeared and his neck xrays had returned to normal. The healing of bony abnormalities by simple dietary changes gives strong proof about the importance of what we eat.

    I guess links are not allowed in comments, but check out rawfamily, Igor Boutenko, Victoria Boutenko, Doug Graham.

    Also check out Brenda Davis, who’s doing an amazing program in the Marshall Islands (2300 miles southwest of Hawaii) where the rates of type 2 diabetes in this population are among the highest in the world (due to an influx of junk food in the last 60 years, previously, there was no diabetes). An estimated 28% of individuals over 15 years of age have type 2 diabetes. For those over 35 years, the figure is nearly 50%. Close to 75% of women and over 50% of men are overweight or obese.

    Approximately half of all surgeries performed on the island are amputations due to complications of diabetes.

    Brenda Davis is leading the program wherein people are seeing dramatic improvements with, among other things, engaging a 100% plant-based diet.

    ***

    Again, I’m suggesting a healthy lifestyle frees up space, time and money in hospitals for those people who need it, when they need it.

    Eating crap will clog your arteries and clogs the hospitals.

    It’s a simple matter of clearing some hard drive space.

    ***

    The entrepreneurs who really benefit from health and healthy eating are farmers who offer good, organic fruits & vegetables.

    You don’t have to take my word for it, I’m on no kind of crusade – just start out by eating raw or vegan for a few months and see how you feel.

    ***

    There is no real magic bullet, of course. No matter who you are — you will die, from something.

    ***

    Here in Boing Boing land, I’m surprised that people aren’t connecting all this with things like DIY, Copyfight, Open Source, DRM, remixes, mashups, hackers and so forth.

    Remember- Government healthcare ( & Big Pharma) has some real serious “DRM” things going on.

    Fruits and veggies, on the other hand, have a whole lotta Magical Unicorns.

    :)

  64. CharlieX_the_Mastadon says:

    #7

    My wife and I personally have a dentist in Utah that 1) knows we don’t have dental insurance, 2) knows we don’t live in California, and 3) charges us very reasonable rates for dental work. So much so that it saves us $$ versus getting insurance.

    Where are the rest of them? He’s happy because we give him a check right then and the for the entire amount, he doesn’t have to file with insurance, and we get decent dental care. I can name 2 GP doctors in my past that have dropped me because they dropped my crap HMO. No one like insurance companies. Especially the people who want to take care of us.

  65. Summer says:

    Oh, for fuck’s effing sake.

    Morgan, for someone who “isn’t on a crusade”, you sure as hell remind me of the nutjob preacher on the street corner soapbox, ranting at anyone he thinks might listen. Only instead of railing against sin and condemning people to hell, you’re going on about a raw food diet like it was the ticket to salvation.

    And you’re just as wrong as that preacher.

    No amount of raw food won’t change a person’s genetics. It won’t prevent appendicitis, influenza, gray hair or even the common cold. Veganism, while it might well help to reduce cholesterol levels in people whose high cholesterol is dietarily-induced (in most people, it isn’t), it can also cause protein deficiencies and a host of other problems.

    In short, your personal choice of diet might work well for you, but it is NOT a panacea, and it will NOT replace a proper and easily accessible healthcare system.

  66. heydemann3 says:

    to that person who said “you were smart enough to get insurance before you had a kid”-how do you know? Perhaps this coverage only started a year or so ago.
    And for all of those who tell me to just BE HEALTHY!!! I’m 48, I’ve spent 20 years working on my feet, carrying 50# bags of flour and sugar around, getting burned at least once a week, slipping on wet floors-I’m a baker. I was only offered health insurance at one job-working in Antarctica. I’m getting out of the kitchen to get a job with health coverage because I can’t afford to pay for needing help with old knees, back issues and starting to age in general.
    I have no kids, and I’ve done something I love for a long time. But I can’t make enough at that job to get reasonable coverage to keep me going. I would have a much larger range of choices if health coverage wasn’t a growing concern.

  67. Takuan says:

    human-time isn’t like physics-time, or even economic-theory time. Why does someone past a hundred years old and wracked by a body long since worn out still fight to draw another breath? And what man would fault him? Government provided health care might indeed as Zuzu said prove a systemic failure. Over time. I myself look at Cuba and Canada and France and the UK and many other places and see it still functioning. I also look at the poor dying in the streets in Calcutta, Washington and Lagos. Perhaps if America did adopt universal health care, it would fail eventually. How many otherwise lost lives might be saved before it does though? And can anyone say what might be devised in the interim to save the situation? How many lives today would you sacrifice by either continuing the present bankrupt model or by doing nothing to save the desperate while you figured out the most economically efficient approach? If you had cancer, would would grasp any therapy if it gave you a little more time in the hopes that a real cure might emerge?

  68. zuzu says:

    to that person who said “you were smart enough to get insurance before you had a kid”-how do you know?

    I was giving benefit of the doubt. The alternative is to imply flirting with disaster.

    But I can’t make enough at that job to get reasonable coverage to keep me going. I would have a much larger range of choices if health coverage wasn’t a growing concern.

    Again, the real problem is that insurance companies have priced the healthcare you need out of your financial reach, using artificially cheap money from banks supported by a government “easy money” policy.

    We need to make healthcare (not insurance, healthcare) affordable again.

  69. Summer says:

    Urgh. Make that “no amount of raw food WILL change a person’s genetics.”

    That’s what I get for attempting to post while simultaneously holding a meatspace conversation. Blargh.

  70. imthefuture says:

    Calling entrepreneurship one of the biggest reasons for health care reform is ridiculous.

  71. zuzu says:

    Takuan, but another question to ask is: How many people does nationalized healthcare kill each year?

    Consider the Type 2 error.

    This is another example of Frédéric Bastiat’s That Which Is Seen and That Which Is Unseen.

    One of Bastiat’s most important contributions to the field of economics was his admonition to the effect that good economic decisions can only be made by taking into account the “full picture.” That is, economic truths should be arrived at by observing not only the immediate consequences – that is, benefits or liabilities – of an economic decision, but also by examining the long-term consequences. Additionally, one must examine the decision’s effect not only on a single group of people (say candlemakers) or a single industry (say candles), but on all people and all industries in the society as a whole.

  72. morgan says:

    :) @Summer

    Whatever… it’s up to you. Choose to let “easily accessible healthcare system” take care of you.

    In some cases it’s like saying “Credit and the economy will always be there for me, so I’m gonna be fine” or “Big Brother can watch over me, because I’m not doing anything wrong, so it’s OK”.

    And, really I’m on no crusade and I’m not fanatical as I might sound. Diet is just one thing, one main thing. But there are many, many avenues to health that do not involve the “Mainstream Healthcare System”

    Just start looking around.

    Or not.

    ***

    This is from a scholarly article (links not allowed?)

    “A paradoxical pattern has been suggested in the literature on doctors’ strikes: when health workers go on strike, mortality stays level or decreases.

    We identified 156 articles, seven of which met our search criteria. The articles analyzed five strikes around the world, all between 1976 and 2003. The strikes lasted between nine days and seventeen weeks. All reported that mortality either stayed the same or decreased during, and in some cases, after the strike. None found that mortality increased during the weeks of the strikes compared to other time periods. The paradoxical finding that physician strikes are associated with reduced mortality may be explained by several factors. Most importantly, elective surgeries are curtailed during strikes. Further, hospitals often re-assign scarce staff and emergency care was available during all of the strikes.”

    Solveig Argeseanu Cunninghama, Kristina Mitchellb, K.M. Venkat Narayanaand Salim Yusufc,

    aHubert Department of Global Health, Emory University, 1518 Clifton Road NE, Atlanta, GA 30322, United States

    bGeorgetown University, Washington, DC, United States

    cMcMaster University, Hamilton Health Sciences Corporation, Hamilton, Ontario, Canada

    Available online 10 October 2008.

  73. eeyore says:

    I have to respond to all the ‘I’m a vegan, Im into yoga, I never get sick’.

    I’m very happy for you, but that doesn’t mean you aren’t being horribly irresponsible by not carrying health insurance.

    What happens when you fall down the stairs because the fat-ass that lives upstairs leaked grease from his microwave burrito on the stairs. What happens when you hit a gopher hole on your 20 mile nature hike and compound fracture your leg… or hit a slick spot or washout on the bike path and break your arm, break your collar bone, or end up with serious head trauma. Or your dog runs into the back of your legs while your cutting veggies and you sever a tendon in your thumb.

    No amount of healthy living of conditioning can keep you safe from random, stupid accidents. No amount of healthy eating or lifestyle can overcome genetics. If you are going to get Lou Gherig’s disease, you’re going to get it whether you are fat or skinny, or anywhere in between… you might be able to delay onset, and slow progression with those practices, but that is all you can hope for.

    Say what you want about the relative merits of any of the plans or approaches put out here, but ‘I live healthy’ has no place in this discussion – at all.

  74. Duffong says:

    When I got married, I jumped on my wife’s insurance program at her job. Then, when I started my own company I realized that without being on her company’s plan, there would have been no way for me to be able to do this.

    So yeah, I can totally dig that health insurance and the lack of affordable and readily available insurance to all does stifle entrepreneurship to a tangible extent.

  75. uknowbetter says:

    Though nationalized healthcare will hurt healthcare innovation.

    The US healthcare industry currently subsidizes the rest of world (in terms of drugs, devices, etc.).

    I say for those serious about nationalizing healthcare, let’s pass a law that any healthcare professional salary is capped at $30,000 a year. They should sacrifice ‘for the greater good’. Would you have a problem going to a doctor making $30,000 a year?

  76. Takuan says:

    in most cases, the mental stress of starting and running one’s own business is why you need medical insurance (public or private). In the best of times,what’s the failure rate? 80% in two years or so?

  77. Antinous / Moderator says:

    imthefuture,

    Would you care to explain that assertion?

  78. Takuan says:

    I’m inclined to believe some health care is better than no health care. Particularly from the point to view of the sick.

  79. Bob Rossney says:

    A lot of fallacious arguments in this thread.

    “Canada’s health-care system hasn’t resulted in a higher entrepreneurship rate.” A more correct formulation of this might be “Canada’s health-care system is not enough to compensate for the many other ways in which Canadian law and custom inhibits entrepreneurship.”

    “Stay healthy.” Yes, and while you’re at it, stay young. Don’t be born with genetic predispositions to anything. Fine advice. Anyway, it turns out, if you look into the numbers, that a remarkably small portion of American health care costs are attributable to preventable illness.

    “Real entrepreneurs overcome obstacles.” Real entrepreneurs fail. The difference between entrepreneurs and ordinary folks is that they’re willing to face the risk of failure. But it’s one thing to gamble with your economic security. It’s another thing entirely to gamble with your life. I’m a 48-year-old entrepreneur whose business right now is hovering on the verge of modest success. I don’t know if we’re going to be able to get there, though, and one big reason is that our health insurance (and care) costs are high and we cannot simply stop paying them. If we make it, two or three years from now we’ll be employing a dozen people at least. But health care costs are a significant threat to our survival.

    “American health care costs so much because of AMA price-fixing.” In fact, if you look at the total amount of American health care costs that doctors’ pay comprises (small), and the differential between doctors’ pay in the US and the rest of the industrial world that can reasonably be attributable to the AMA (also, small), you don’t get anything like the kind of numbers that explain why American health care costs per capita are more than 50% higher than those of the rest of the OECD nations.

    “Government-sponsored health care doesn’t address the fact that health care is expensive.” Arrant nonsense. Simply nationalizing *health insurance* would eliminate one of the most significant components of American health care costs: the phenomenal amount of money and energy that get expended on administering private health insurance. Look at how much of the cost of running a hospital or medical practice is administrative. The great bulk of that administrative expense comes from the overhead of dealing with dozens of different insurers with dozens of different sets of rules. The entire underwriting department of every single private health insurance company is pure waste: it exists entirely to keep the company profitable by figuring out which applicants are high-risk; in a single-payer world of universal insurance, that inefficiently is not just mitigated but eliminated. The differential in drug pricing between the US and the rest of the industrial world is directly attributable to the fact that we don’t have a single government agency negotiating with pharma on the behalf of all citizens, the way every other OECD country does. (Note that the VA gets better pricing on drugs than any other insurer in the US. Note also that the Medicare-reform bill that passed during the Bush administration expressly forbade Medicare from performing those kinds of negotiations.)

    And that’s just what comes from nationalizing health *insurance*.

  80. eclectro says:

    @ZULU

    Huh? What insurance companies pay the hospitals and drug companies? Or the premium you pay the insurance company? It seems you’re citing the former by speaking about the latter.

    I’m sorry you do not understand. The insurance companies pay an *entirely* different rate to the hospitals/doctors that bill. The Hospitals/Doctors bills the person *several times* the amount for the same services if he walsk through the door without a card. And, as you should know, if something major (like cancer) is diagnosed, it easily could bankropt a person. In fact, the majority of bankruptcies today are related to being unable to pay medical bills.

    Hey, I just want to pay my $100 for a consult just like I would a plumber, electrician, or car mechanic. Maybe I’ll pay another $50 to get blood analyzed, and whatever the least expensive global generic price for whatever drug I need (via parallel trade).

    You missed my point entirely. The uninsured pay more for healthcare than the uninsured do. Many times more, If there was free market competition driving down prices *which there isn’t* your point might aply.

    Bureaucracy in healthcare is quite literally deadly.

    As opposed to the completely dysfunctional system we have now? People who can’t afford a doctor – now that’s what’s deadly. There have been instances where the freemarket has been demonstratively shown to be dysfunctional to the population at large, which case government has stepped in with a remedy. That’s why there is a government. Healthcare is another such case.

    There are well monied interests that want to keep the gravy train the same. And then (as another poster pointed out) are fanatical libertarian ideologues such as yourself that agree with such a goal. Really, I know that every segment of society has them, but at a certain point arguments with them are completely unproductive as it is a kind of religion that doesn’t solve problems. Gratefully, they are only a minority.

  81. zyodei says:

    @ Eeyore: And that’s exactly why health INSURANCE should be just that, insurance. Something you use in a worst case scenario.

    You don’t rely on your auto insurance to change the oil in your car, do you? And yet that is exactly how health insurance works in this country. This is why insurance is so catastrophically high.

    95% of the health care we use, we should pay for out of pocket. You research the options, and choose the type of medicine that is best for you – natural or allopathic, whatever you feel most comfortable with.

    ************************

    I live in Korea. Whenever I get any sort of ailment, I go down to the herb vendor at the market, and pantomime my illness. He goes to all his little bins and makes me a big bag of stuff to boil up. It tastes awful, but only costs five or ten bucks. So far, he is three for three in making my illness go away in 24 hours.

    All this is to say, there are hundreds of different types of medicine in the world. Nutrition is one. We impoverish ourselves by relying on only one.

    As the founder of the Mayo Clinic said, (to paraphrase) “The wise physician first tries to treat the patient with food, before moving on to medicine.”

  82. morgan says:

    @TheMadLibrarian , eclectro, Roger Stanton:

    Yes, if you break your arm or something of that nature, no vegan diet is going to put it back together.

    And no, I don’t feel as though the sick should just crawl away and die.

    But in general health terms, the key is prevention and strengthening. Raw and/or vegan diets along with various traditional and natural medicines can go a long way to strengthening and improving health so that you don’t need to rely on the government (etc) saving your ass, or your arteries, some years down the road.

    I surely don’t mean anyplace should cast away Hospitals, nurses, doctors and so forth. But why not take the strain off of these people (the docs, the hospitals) by seriously taking care of your own body and your own health so that there is more space and more money for those things that cannot be fixed or prevented with diet and healthy lifestyles.

    Additionally- it just makes sense to me that if there is a growing entrepreneurial spirit out there, coupled with a growing dissatisfaction with the healthcare system – than someone would do well to address that “gap in the market”.

    Here’s something related to all this from Mark Pesce, regarding hyperconnectivity, education and medicine:

    “Let me give you one example, happening right now. The classroom walls are disintegrating (and thank heaven for that), punctured by hyperconnectivity, as the outside world comes rushing in to meet the student, and the student leaves the classroom behind for the school of the world. The student doesn’t need to be in the classroom anymore, nor does the false rigor of the classroom need to be drilled into the student. There is such a hyperabundance of instruction and information available, students needs a mentor more than a teacher, a guide through the wilderness, and not a penitentiary to prevent their journey.

    Now the students, and their parents – and the teachers and instructors and administrators – need to find a new way to work together, a communion of needs married to a community of gifts. The school is transforming into an anarcho-syndicalist collective, where everyone works together as peers, comes together in a “more perfect union”, to educate. There is no more school-as-a-place-you-go-to-get-your-book-learning. School is a state of being, an act of communion.

    If this is happening to education, can medicine, and law, and politics be so very far behind? Of course not. But, unlike the elites of education, these other forces will resist and resist and resist all change, until such time as they have no choice but to surrender to mobs which are smarter, faster and more flexible than they are. In twenty years time they all these institutions will be all but unrecognizable.

    All of this is light-years away from how our institutions have been designed. Those institutions – all institutions – are feeling the strain of informational overload. More than that, they’re now suffering the death of a thousand cuts, as the various polities serviced by each of these institutions actually outperform them.

    You walk into your doctor’s office knowing more about your condition than your doctor. You understand the implications of your contract better than your lawyer. You know more about a subject than your instructor. That’s just the way it is, in the era of hyperconnectivity.”

    • Antinous / Moderator says:

      Morgam,

      Your blog link can go on your profile page.

      And good luck on performing your own appendectomy. Make sure to upload the video to YouTube.

  83. Anonymous says:

    This all sounds rather mental to me. I am a UK citizen so all health care is provided for me by the NHS (which is paid for through our taxes). I recently had to have a minor eye surgery and managed to get into a clinic three weeks later. This to me seems normal. I don’t have to wrangle with employers, lie on application forms or pay astronomical insurance fees to get this service.
    Yet every week there are complaints on the news regarding waiting times, drug policies, nursing shrotages etc. regaring the NHS. We have an exemplary national health service (and no, I don’t work for it, nor any government body related to it) which is continualy denigrated by UK tax paying citizens. Hopefully some of them will read the horror stories detailed above.

  84. Summer says:

    Morgan,

    I have a genetic abnormality that causes me health issues that cannot be avoided by a vegan diet. Sorry dude, but you really haven’t got a clue what you’re talking about.

  85. joeposts says:

    “It’s a Darwinian unleashing of talent into the entrepreneurial ecosystem.”

    Poor Darwin. If only he had known the fittest were the ones best able to bullshit people in job interviews. He could have saved himself a lot of time.

  86. newe1344 says:

    I’m pretty sure Dan Gillmor just became my first ever “favorite web celebrity.” If there is such a thing.

    I’m with zuzu,

    *eats a girl scout cookie* but I wonder if making bureaucracy manage our cavities will produce results not unlike the likes of AIG…

    *brushes teeth*

  87. joeposts says:

    “Would you have a problem going to a doctor making $30,000 a year?”

    Lots of Canadian GPs make about that, lol. It’s not usual for them to take home around $60,000 a year or less, after paying off business expenses, salaries, etc. I’m not scared of visiting my doctor. Assuming I can find one. If we were smart enough to pay smart people to go to school to be doctors and nurses, etc. perhaps more of them wouldn’t mind making (relatively) crappy money once they’re in the workplace, doing stuff for the greater good of humanity, and we wouldn’t have to pay all these doctors exorbitant salaries to attract them to the field, and then complain about how gosh-darn expensive it all is. Nationalize everything, or nothing, dude.

    And believe it or not, some people aren’t driven by a need to collect little green bits of paper, and then invest them in the latest ponzi scheme. Some people prefer to give than to receive.. however antiamerican that is.

  88. Bob Rossney says:

    Health insurance is profitable entirely because insurance companies cover only the least expensive customers. Insurers certainly reduce costs by negotiating lower rates with providers, but they control their costs the most by not insuring people that are going to lose them money. This is such an important component to their profitability that they have large underwriting departments that do nothing else.

    So how do these expensive customers pay for their health care? Out of pocket, for as long as they can afford to. Then it’s through Medicare if they’re old, the VA if they’re veterans, or public emergency rooms if they’re neither – which is to say, if they get any health care at all, it’s at public expense.

    This is an almost perfect example of privatizing reward and socializing risk.

    This is a bad situation if you’re one of the people who can’t get coverage. But it’s a perverse one if you’re one of the ones who can. Americans with private health insurance, considered as a whole, are paying *all* of the health-care costs of the privately insured, *all* of the administrative and marketing expenses of private insurers, *all* of the *profits* of private insurers, and on top of that they’re *still* paying a significant part of the health care costs of the uninsured.

  89. joeposts says:

    …It’s not “unusual”…

  90. kondspi says:

    Boo!

  91. zootboing says:

    Oh boy- there’s nothing worse than getting a new-minted MPH started on her favorite topic!

    Patience, please- I’ll try to be short and worthwhile.

    #16- To quote the Stanford geneticist who spoke to my (lowly state school) class when I was in undergrad: “Are you so certain that your genes are perfect that your children or grandchildren won’t need a nationalized accessible health care system?”
    Are you so sure that the current system won’t someday force your own children to choose between their entrepreneurial potential or health care?

    You mean well, I know, but your words are written with the true ignorance of the healthy who have no idea what it’s like to fall down the rabbit hole into the distorted world of uninsured chronic illness.

    Entrepreneurs may be “a breed apart” but those of us who has been saddled by the fates with the need for medicine in order to breath or accomplish other vital functions, insurance is no kind of “luxury”.

    Free clinics and online prescriptions exist, but the time/effort/mind space negotiating these expensive patchwork systems is ovewhelming and a part time job unto themselves.

    Failing to recognize the need for accessible healthcare is basically volunteering to play eugenics and shrug as you toss us unfortunate unhealthy and all our potential onto the dust heap for wont of a drug and office visit with an actual cost of $20 apiece (but retail cost of $200).

    But I’m not an advocate for the single-payer system, because while I believe we need universally ACCESSIBLE healthcare, I think the tax burden that the Canadian and UK single payer system places on taxpayers suppresses business start-ups and job creation.

    I have an Masters in Public Health, and from my studies and talks with analysts who actually work for the UK system, here are the problems with the single-payer system:

    1- Working citizen / tax payers pay into the system and are registered clients. But non-working or illegal residents present in the same area are either given the same benefits as those who buy in (burdening the system without paying in), OR still overload the local ER by using it as a source of primary care.

    2- A tax/citizenship based care system forces illegal residents underground where they avoid regular medical care/vaccinations that protect everyone from epidemics or expensive indigent emergency care.

    3- A single-payer system where people don’t see the immediate fiscal impact of how they use the system encourages people to wrangle for expensive upgrades and extras for fear that if they don’t “get their share” someone else is going to get it. This means that folks make poor health choices that cost the system millions of dollars, or abuse the “free” system with careless usage like (my favorite) clogging up beds in the local ER by using them as a free, safe way to recover from deliberate binge drinking because, hey, we’ve paid our health taxes, and there’s no co-pay to eat into our beer money! (Yes, this has been a problem in urban ER’s in the UK in the past years).

    4- The “invisible” manner in which people lay burden after burden on a single payer system eventually makes the tax cost of supporting this system oppressive to the small business entrepreneur who wants to start a company and create more jobs. In fact, many residents of the UK who make a pile of money switch their official citizenship to Monaco to avoid the heavy taxation that comes with becoming successful in the UK. This kills entrepreneurship and the tax base.

    5- And finally, we can’t afford to tear down an entire industry and wait while we rebuild a new single-payer system. The UK and Canada had no big private insurance industry when they decided to install single-payer care. Now in the US we have to work with what we’ve got or risk interrupted care and spend millions trying to work against the Insurance Lobby who will fight with every politician and dollar they’ve got to stay alive. And really, can we afford to kill another industry and put more people out of work?

    My suggestion is this:

    1-Start making what we’ve got work for everyone. Simply make it illegal to do business in the US unless you make a basic health care package (including prescriptions, visits and basic screening)available to everyone on a sliding scale based on income. Make buy-in available to everyone who lives in the area. Period. Allow people to buy “extras” (non generics, private rooms. Etc.) on the same sliding scale. Require co-pays so people see immediate impact of their choices. Also legislate that they cannot refuse to provide SAME PRICE CARE for those with pre-existing conditions. States can offer some underwriting to ease the burden, but insurance companies can no longer innocently insist that they are making insurance available to these people while demanding $5k+ premiums per month.

    2-Require those who opt out to buy a simple yearly package that covers catastrophic care exceeding $5000, and a few doctors visits. Make the healthy young adult demographic at least cover their own assets.

    3- Cut out Insurance companies cost-based denial of care by appointing “Quality of Care” boards for each city/county/state made up of non-insurance paid, non-elected members of the medical and academic community. Make it illegal to for acute care to be stalled or denied beyond 8 hours. We have similar committees in post-Tuskegee medical research to ensure fair care for research participants.

    There will be other issues to tackle, but I really believe that this would be a good start towards a country where access to healthcare, personal responsibility and entrepreneurs can have a healthy co-existence.

  92. eeyore says:

    The problem with the insurance system in the US is a classic Moral Hazard problem – on both sides of the coin.

    Insurers have a fiduciary responsibility to maximize shareholder value. They have a duty to minimize costs whenever, wherever and however they can, and to keep their risk profile as flat as they can without running afoul of the law. The employment, and compensation of claims managers is determined by how far above or below a relatively arbitrary financial goal the come. This is not, and has never been a safe or viable model.

    On the flip side, in states like New Jersey that do not allow pre-existing condition penalties, there is a perverse incentive for the individual to not pay for insurance until something goes terribly awry, since there are no penalties at all for not acting responsibly ( eg carrying insurance when healthy ).

    I’ve always believed that the best real solution to this was a simple co-op model, since an insurance company should never have a responsibility to share holders they do not cover.

    In this way, you remove the perverse incentive found in current insurance companies, allow market forces to operate, and preserve maximum choice. However, as good as that is, I think there is still a role for government to play in terms of market balancing.

    For example, the need to address pre-existing condition and conservative underwriting issues. I think this could be reasonably handled by government establishment of a ‘target risk profile’. Coops falling within a ( socially ) desirable risk profile would be eligible to join a national risk pool for purposes of negotiating procedure and pharmaceutical prices. Thus, there would be a real counter-incentive to overly conservative underwriting. Conveniently, you may have noticed that this requires only minimal federal funding.

    To go what may prove to be a necessary step further, co-ops that find themselves with an unusually risk heavy profile could elect to join a pool making them eligible for a Federally mediated partnership with one or more other coops with a lighter risk profile to bring all of them within the boundaries of the target risk profile.

    Implicit in this model is either a legal mandate of insurance coverage, or some other incentive for maintaining coverage – most likely come form of lapse penalty. I would tend to favor the latter so long as the penalties were not permanent. Lapse penalties could come in the form of increased premiums, or increased out of pocket treatment costs for some period of time.

  93. aeon says:

    There is no perfect way to fund and provide healthcare. Every system has it’s problems and unintended consequences.

    If the user pays and doctors provide service for a fee, doctors have the incentive to over treat and individual patients can find their illness too expensive and may get nothing if charity is not forthcoming.

    If insurance companies fund then there is constant gaming between doctors, hospitals and insurance companies as each tries to maximise their own profit. Costs spiral and those who can’t afford the premiums get nothing.

    If there is a single payer, national scheme then patients try to maximise their personal gain and bleed the system. Costs are capped from above to try and contain the escalating expense and those who shout the loudest or most eloquently get care at the expense of the quiet and unassuming.

    So what to do? How about a mixed payer system under which the state underwrites the care of anyone within it’s borders. But (and here’s the catch), the state system provides the most utilitarian of care – only those interventions which can be shown to improve the tax income of the state itself long-term. Anything that gets people back to work and paying taxes is covered. Any complaint about failure to cover would need to demonstrate a good economic reason to provide care. Meanwhile everything else is insurance funded or user pays. Under this kind of system paediatrics, obstetric care, trauma care and preventative medicine would be well funded. Other things rather less so…

  94. Charles Platt says:

    Gilmore’s post is the most tenuous justification I have ever seen for socialized medicine. I have been self employed for almost my entire life, and was uninsured for at least 20 years. Anyone who burns with a desire to start his own business is going to go ahead and do it; thinking about health care is far, far down the list of concerns. Plus, the advocates of socialized medicine always, always skip over the little detail that anyone in the United States can get free service at the nearest emergency room if unable to pay. Yes, you may wait for a while if your life is not endangered, but having grown up in a nation (England) with socialized medicine, I can assure you that waiting becomes a way of life in such a system.

    I am so, so tired of seeing absurd justifications for social engineering, on pseudo-rational grounds.

  95. Drew from Zhrodague says:

    Hi. I imagine myself an entrepreneur, and one that has had both success and failure. Health insurance is not an issue for me, but I am lucky that I have not needed much medical care — I rolled high on the constitution. In this case, insurance does not dissuade me from trying to make it on my own.

  96. stanfrombrooklyn says:

    Funny but the most heavily socialized medicine countries (France, Sweden) are about the worst for entrepreneurs because it’s so difficult to get license, permits, bank accounts, etc. Once a societ gets used to relying on government for every little thing, then it becomes very easy to not put up a fight when government blocks every little thing. The health system in this country certainly stinks but somehow I doubt nationalized medicine is going to spring forth a new fountain of entrepreneurs.

  97. Takuan says:

    medical care is a “little thing”? I would think it is one of the few things I would DEMAND from society and government, along with security of person and property. How about that socialized military, huh? So worth the billions in “defense” as proven by the way it turned back the Vietnamese Invasion and the Iraqi Hordes Attack. Yep.

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