diabetes, insurance, market

Anton Sherwood (dasher@netcom.com)
Thu, 22 Jan 1998 18:20:56 -0800 (PST)


John Clark:
: > If diabetics pay less than they should
: > then non diabetics will have to pay more.

Charlie Stross:
: That's the 'market knows best' answer. I am not happy with it. It
: subordinates ethics to market realities. (The ethical viewpoint being
: "everybody should have access to equal treatment, in an ideal world"

Hey, if all you want is *equal* treatment for diabetics, no problem.
I had assumed that you wanted *more* treatment for diabetics.
(This is not a joke.)

: and the market viewpoint being "you get what you pays for".)

Not exactly - the market ethic (imho) is more like "everyone has
different priorities, and to rank them externally is favoritism."

(later)
: What I was going on about is the problem that there's a conflict of
: interest between people selling health care insurance and people buying
: it, and this conflict of interests may be a side-effect of the market
: system itself.

There's always a conflict between two people who want to use the same
resources for different purposes; you can't blame that on the market.
Exchange is a way of bringing these conflicting desires into harmony.

: > ( ... the NHS does it so badly, and severely restricts treatment
: > for the elderly folks who need it the most).
:
: The NHS _doesn't_ do it badly; it does it very well indeed, given
: that it is grossly underfunded and massively oversubscribed.

By its very nature, the NHS will inevitably be oversubscribed (and
a Public Choice economist might say it's inevitably underfunded).

Venice handles floods very well, considering that it is awash,
but I still wouldn't store valuable papers there. (Now accepting
nominations for a better metaphor)

: (Compare the situation with the USA, where per-capital healthcare
: spending is 30-50% higher but something like 30% of the population
: have *no* healthcare cover at all.)

That's largely an artifact of WW2 wage controls, strangely enough.
Employers forbidden to raise wages tried sweetening the deal by
throwing in benefits like medical insurance; eventually this was
made tax-exempt, which meant that job-tied insurance was suddenly
far cheaper than private insurance, which meant that the whole
medical industry was soon geared to job-tied insurance, which is
a stupidly brittle way to run it.

(There are sporadic attempts to level the field, and thus open it,
with such devices as tax-exempt medical savings accounts; I gather
that bills to this effect usually fade under cries of "tax giveaways
for the rich!", but the idea isn't going away.)

Burden the system further with rules mandating, for example, that I
can't get medical insurance that does *not* cover drug addiction rehab
(surely after thirty-odd years I should have a good idea whether or not
I'm at risk?), or that private insurers *must* give premium discounts
for X but must *not* take Y into account -- and it's no wonder that
the insurance market is a mare's nest.

And then of course there are the byzantine Medicare rules, under which
physicians big-hearted enough to accept Medicare patients spend hours
on paperwork to get paid a fraction of their normal fee ...

And now we hear the government announce that there are too many doctors!

: The problem is, life is a 100% fatal condition, and almost everyone
: will be willing to spend infinite resources if they can stave it off
: for just one more minute; faced with that kind of demand, what sort
: of system _can_ allocate resources fairly?

The first problem is defining "fairly".

Anton Sherwood *\\* +1 415 267 0685 *\\* DASher@netcom.com