…because I’m an economist and a mom–that’s why!

Waste Is in the Eye of the Beneficiary

September 10th, 2009 . by economistmom


Around the Concord Coalition offices today (the day after the big speech) my colleagues and I were talking about how President Obama likes to make it sound as if all we have to do to save health care costs (to “bend the health cost curve”) is cut the “waste” and “abuse” that no one should want anyway.  That’s how he can claim his plan would reduce federal health spending without cutting any federal health care “benefits”–because it wouldn’t cut any spending that actually “benefits” people.

But as I said late last night, one man’s “waste” is another man’s precious benefit.  It seems there are a lot of different meanings in different people’s minds when they hear the terms “waste” and “benefits.”  So what we really need to do to better inform the health reform debate is to better define those terms and the grey areas between them, and then get the Administration and the other policymakers in town to explain exactly what it is they would cut and what they would not.

So I’ve come up with a “workbook” exercise of sorts for the policymakers to “fill in” that could really help us better understand what it is they’re proposing and better figure out whether we’re willing to accept the tradeoffs their policies imply.  Here it is:

FILL-IN-THE-DETAILS INSTRUCTIONS for “EconomistMom’s Health Care Reform Workbook”:

Step 1: Consider this spectrum of the value or wastefulness of health care spending, from most beneficial down to most wasteful:

  • “Valuable Benefits”:  many people like them, and they’re essential;
  • “Unnecessary Benefits”:  many people like them, but they can live without them;
  • “Unworthy Benefits”:  some people might like them, but they are “uneconomic” in that they wouldn’t pass a cost-benefit test;
  • Beneficial Waste” (not necessarily an oxymoron):  only a few people like them, and they fail the cost-benefit test miserably, because there’s a lot of “deadweight” loss in getting the “benefits” to those few people;
  • “Complete Waste”no one “likes” them because the spending is completely thrown into the wind–pure and utter waste.

Step 2: List specific examples of health care spending that you consider to fall under each of the five categories above.  (e.g., “Medicare spending that goes toward these procedures: [list] or to those households making $_____ or more.”)  More points/extra credit given for greater specificity and more examples.

Step 3: “Draw the line” somewhere within the list above that allows you to fill in these blanks:

“Our plan, by having the federal government stop paying for/subsidizing any health care spending below the line, is estimated to reduce federal health spending by $___ billion over the first ten years AND $___ billion over the next ten years.  Coupled with a sustainable new source of revenue from [name the sensible revenue-raising policy], our plan would expand health coverage to ___ million more Americans, including/not including (circle) illegal immigrants, in a deficit-neutral or (better yet) even deficit-reducing manner over the first ten years and beyond.

Step 4: Listen to the cheers or the boos…

Step 5: If cheers outweigh boos, CONGRATULATIONS. You’ve just come up with a fiscally-responsible bill that might actually pass.  If boos outweigh cheers, go back to Step 1.

Ok, so who’s gonna try first?  President Obama?  I’ll even let you have Peter take the test for you.  ;)

22 Responses to “Waste Is in the Eye of the Beneficiary”

  1. comment number 1 by: SteveinCH


    This test is impossible and indeed, wrong to conduct. It’s essentially an NPV (net present value test). Does any given procedure have sufficient value to be included/subsidized after taking into acocunt, it’s cost, benefits over time and the time value of money.

    The reason the test is impossible is benefits and the discount rate vary highly among individuals. I may value an extra month of life much more highly than my wife or my neighbor. I may also value money today differently than moeny in the future. And finally, my willingness or ability to pay influences all of the above.

    So on any given procedure for any individual at any point in time, there will be an outcome. The test requires one to create some form of average or point in the distribution to test but in doing that, one over or underestimates the NPV for almost every individual. As a consequence, the deadweight loss of this approach is enormous.

    So while it is conceptually possible to conduct this test at some point and on average, it is impossible to get anywhere close to a utility optimizing solution using it.

    Beyond the theory, there are policy issues. Even if we could this, we wouldn’t. Politicans will always fudge the math and make out year assumptions that make the costs look lower than they are. For fun, I will try a version of step 3.

    “Our plan, by having the federal government stop paying for/subsidizing anything other than catastrophic coverage and well baby care is estimated to reduce federal spending by hundreds of billions of dollars per year over the next 10 years. As a consquence, we will be reducing the current Medicare tax by 50% and making health coverage available to millions of Americans by removing any mandatory elements to health insurance beyond well baby care and catastrophic coverage. As a result, insurance will become cost accessible to all people above the poverty line. Illegal immigrants will not be covered but will be eligible to buy catastrophic coverage if they choose to do so.”

  2. comment number 2 by: BillSmith

    What’s your number for catastrophic coverage? Individual / Families? Would it move up with incomes?

  3. comment number 3 by: SteveinCH

    Catastrophic coverage would be directionally, all expenses above a fixed number, more like auto insurance. I’m fine with numbers between $2000 and $10000. I think you could then offer subsidies to those who truly need it below the threshhold.

  4. comment number 4 by: Brooks

    Diane — didn’t you hear? It’s simple. Obama explained it very clearly. Everyone will get the beneficial blue pill, avoid the completely benefit-less red pill, and we’ll all be healthier and wealthier* (and wiser).
    (* Well, everyone wealthier except the evil maker of that red pill.)

    Seriously, great post.

    Of the two points I was going to raise, Steve hits on one: difference in value different people associate with different types, levels and quality of healthcare and related benefits (or increased probability of benefits). Having the same set of restrictions on coverage apply to everyone covered (or whose insurance is subsidized) by the government (i.e., the taxpayers), rather than would bring the typical inefficiencies of government rationing (”inefficiencies” in the sense of allocation of resources that are not aligned well with the value that people attach to alternative uses, related to the deadweight loss you mention). Which leads to the question of to what extent and how consumers (patients) should bear the cost of care so that (1) each consumer can seek to maximize value for himself, and (2) in aggregate, spending will be more efficient in the resource allocation sense (and, as a result, probably also in every sense of efficiency because providers will have more incentive to provide high value [benefits per dollar]). Granted, people with government coverage or subsidies generally wouldn’t have a lot of room to pay for healthcare, but more incentives would be better than fewer in this regard, and I assume some system could be structured such that people in these segments could essentially choose between ending up with more cash from the government or getting more healthcare, or between getting more insurance coverage (or more specific healthcare) of one type vs. another. Although not perfectly analogous, the basic idea of my “Barry vs. me” contrast applies to this efficiency issue

    Your “Beneficial Waste” category, if I’m interpreting it correctly, makes an important distinction and an important point, one that is, of course, deliberately lost in Obama’s silly, misleading “blue pill, red pill” convenient oversimplification. Everyone knows there’s a lot of waste in the system, but the question — for any given policy intended to reduce/eliminate a particular type of waste — is how much worthwhile (sufficiently cost-effective on an individual patient level) healthcare would we end up eliminating as we reduce/eliminate this type of care that is insufficiently cost-effective in aggregate and for most individuals (a kind of healthcare “collateral damage”). Far too many people on the “reform” side — unfortunately led on by the president — seem to just jump from the existence of a lot of waste to the conclusion that we can eliminate it (and thus save boatloads of money to fund expansion of coverage AND deficit reduction) without any adverse effects on the quality of anyone’s healthcare and health outcomes.

    I would suggest a refinement to that category (Beneficial Waste) which is to distinguish between types of healthcare services that are low in cost-effectiveness* for everyone or almost everyone vs. those that are low in cost-effectiveness for most but very high for some. The latter (which I think you intend your Beneficial Waste category to address) presents a different — and tougher — values question involving morality (potential harm to others) and the value we attach to the related security (health risk reduction for ourselves). It’s one thing to decide we’re going to eliminate some expensive treatment that simply isn’t very effective for anyone, and quite another to say, for example, that we’re not going to cover testing people in X segment (e.g., people age 40 - 49) for Y cancer, even though we know that means some in that segment will die from that cancer who would have been curable had the testing detected the cancer in an earlier stage. Both types of “beneficial waste” (some benefits, but, at least in aggregate, not “worth” the cost) should be addressed, but they are very different in nature and involve different considerations.

    * I’m excluding placebo effects, as I think is appropriate in setting such policy, although I see room for reasonable disagreement to some extent.

  5. comment number 5 by: SteveinCH

    The problem Brooks is that a political process will always avoid any option that results in bad outcomes happening to people. To use your example, the political process will always screen X people for Y cancer even if the incidence is low and the aggregate cost/benefit is low. The reason is spending money is low cost politically relative to being blamed for bad outcomes.

    Hence my concerns about costs. The political process will always produce a higher cost outcome because it’s cost/benefit calculus says that being blamed for a bad outcome is much higher cost than any particular amount of dollars.

  6. comment number 6 by: Brooks


    I think the line you draw is reasonable and sensible (which isn’t to say others aren’t).

    Personally, though, I’d like to see all children covered (and covered comprehensively) rather than just have well-baby care. It’s one thing, however troubling in some cases, for adults to decide for themselves what health risks or drawbacks they prefer over spending money on healthcare, but another to put kids in a situation in which their parents make such choices for them (even without approaching legal parental neglect).

    Second, I’d like to see some preventive care covered, even some preventive care that would, in aggregate and net of savings in some cases, add to federal spending. For some of the preventive care that would fall into what I’d consider the “big gain for a few, little/no gain for most” sub-category of Diane’s “Beneficial Waste” category, I’m willing to pay more in taxes so that a relatively poor person or financially insecure senior (who, in many cases, does not have a good sense of risk levels) does not have to choose between risking some preventable painful, earlier death (by forgoing preventive care) vs. forgoing other expenditures (to pay for that preventive care) that are far from luxuries. Of course, the higher the cash subsidies offered to such people, the less of a problem this is, because those “other expenditures” that one would have to forgo would move farther from necessities.

    Re: The problem Brooks is that a political process will always avoid any option that results in bad outcomes happening to people. To use your example, the political process will always screen X people for Y cancer even if the incidence is low and the aggregate cost/benefit is low. The reason is spending money is low cost politically relative to being blamed for bad outcomes.

    Valid point and well said. But sooner or later the fiscal imbalance sh*t will hit the fan and the American public (and in turn, politicians) will be confronted with actual hard fiscal policy choices, and the point of the exercise Diane suggests would be to force that responsibility and rationality sooner rather than later. Second,

  7. comment number 7 by: Brooks

    Meant to delete that “Second” at the end.

  8. comment number 8 by: SteveinCH


    I personally would like to see all children get care. I’m not sure that means all children need to be covered. To argue we need to make care free to ensure children get it doesn’t make sense to me. What I often wonder about is whether allowing the government to mandate that all children get care is a slippery slope to allowing a whole bunch of other things that government could imagine mandating for the benefit of childern.

    I support well-baby or maybe well-child care because I think it’s the easiest to forego and relatively low cost (in the scheme of things) but as you rightly point out, reasonable people can disagree.

    With regard to preventative care, I believe in subsidies for the poor to recieve preventative care but I would prefer to put them in the context of a high deductible insurance policy. To wit, we provide subsidies for those near and below the poverty line to cover their deductible on a catastrophic policy. It limits liability for the government and still leaves a price metric in the hands of the citiizen.

    I would point out that what we’re discussing is light years away from any proposal currently or likely to ever be on the table in the halls of Congress.

  9. comment number 9 by: Jason Seligman

    This is a great post, but some of the criticisms are unfair to level against –just–the government.

    The points about value varying by person & procedure are correct, but that has not stopped the private sector from adopting the “miracle” of three-part pricing {premium, deductable, co-pay}. How do they do it? I saw a wonderful paper on this at the American Risk and Insurance Meetings a few years back. Lots of math all pointed at finding the optimal 3-part pricing schema. Great, but after a while you realize that a lot depends on the pool. After all each procedure should have a different set of prices across all three components… and across all individuals based on expected productivity gains etc, etc.
    But you see, insurance relies on pooling heterogeneous risk across heterogeneous individuals, so big pools can allow for greater pricing tolerance. That is why universal coverage is so dang alluring, because you do not have to worry too much about differences across pools & price according to specific pool dynamics.
    The problem though is one of politics and, to be fair, path-dependency. We have a great infrastructure but it is built around our balkanized insurance markets. The trick may well be either to incent competition with something like the public option, or to aggregate the pool, and auction it off to the private insurers, something I have been playing around with for a few months now. Either way the idea is/has been to set up cost based competitions that might improve the functioning and efficiency of private insurers and damp premium growth.
    Now private insurers have cried foul, that the public option would be unfair competition, etc, but I’m not so sure they would experience it in quite that way.
    The trick with the public option (co-op, geographically dependent public option, what have you) is that the Public is probably looking at a different pool that is, frankly, less well. Thus it is possible that the public option will appeal only to those who would be expensive in private pools. As they unzip out of private pools, the private sector may be comprised of predominately healthier persons. Thus I thik it is possible to expect to see private sector premium growth slow, or reverse—seemingly good news. But the risk is that all of those savings are absorbed by the public pool, which persistently carries a greater risk profile.
    I think in addition to Diane’s very difficult test, I would suggest that public coverage be limited to the same care that regs would impose on the private pools (not really that informative, but useful in describing the bound of what public insurance now would be)… and this answers most of the questions on the test) – except that revenue one.
    Okay, I’m game, I’ll try. In parts:
    -1- Iff (two f’s) the care given under the public pool is more effective than at current where many fail to receive preventative and health maintenance care, and sub ER visits for cheaper visits, etc, etc., on net, then your new funding problem is smaller than your current one (Medicare & Medicaid (at the State and National level), SCHIP, etc. Probably not, not even the Administration is making that claim…
    -2- Iff the administrative efficiency of the public program is superior to the private programs to the extent that the required increase in taxes is less than the counterfactual growth in premiums, then what ever revenue increase is required to fund the program is more affordable than a bankrupt Medicare program (remember folks that trust fund is already shrinking), coupled with high rates of growth in private premiums. Not impossible—but as Diane is good to ask – how plausible?
    Well… it depends on the pool we wind up with. The bigger the better in all likelihood. The thing to do here I believe it to start simulating pool dynamics. CBOs Long Term Modeling Groups focus on health care is really heartening to me. I think like any product launch public or private the action here is in figuring out the market, and estimating economies of scale.
    As for which tax is best for this… there are many options. We’d prefer one that was not regressive since regressivity is in essence something health insurance solutions are addressing, but if I may two sexy ones would be a carbon tax (the health insurance should lift a burden off employers, so there is a partial offset, or a limited VAT.


  10. comment number 10 by: Rodger Malcolm Mitchell

    President Obama assures us his health care plan would not cover illegal aliens. While that statement is untrue, it cheered Democrats, who want to pass a health-care bill – any health care bill.

    Republican Representative Dean Heller said, “Congress should do everything within its power to curb abuse. Requiring citizenship verification for enrollment would ensure only citizens and legal residents receive taxpayer funded healthcare,” which cheered Republicans, who use the law and citizenship as excuses to exercise xenophobia.

    When Democrats and Republicans, liberals and conservatives, agree on a major principle, we all need to tremble. Here are some thoughts on this frightening situation:

    Despite all the claims, no one knows how many illegal aliens reside in America. Depending on whom you believe, the number could be anywhere between 12 million and 70 million – from 3% of the U.S. population to 17%.

    Despite all the claims, no one knows how much income tax, Medicare tax, Social Security tax, sales tax, property tax and all other taxes they pay. Some right-wingers claim the illegals pay no taxes, which is ridiculous on the face of it. No sales or property taxes? No income, Social Security or Medicare taxes withheld from their paychecks? No excise taxes, like gasoline tax? Please let me know their secret. We all might like to try it. Many illegal aliens pay taxes out of deportation fear. Many pay out of a sense of obligation and morality. Many pay for many reasons.

    Despite all the claims, no one knows the degree to which illegal aliens may “steal” jobs from American citizens. Usually the jobs in question are at the low end. We don’t hear doctors or lawyers complaining that illegal aliens have stolen their jobs. Who does most of the low-end jobs in America? Disproportionately, blacks (aka African Americans) and Latinos (aka Mexican Americans). Who are the complainers? Mostly the right-wing whites, who wouldn’t take those jobs under any circumstances.

    Despite all the claims, no one knows the net economic contribution made by illegal aliens. Conservatives claim it’s very little. Liberals tell us about all the industries that depend on illegal aliens.

    So, despite much heat, shouting and claims, no one knows the fundamental facts of this debate. It’s like arguing religion. Everyone believes strongly, but no one has facts.

    We do know this, however. When illegal aliens don’t have insurance, they use emergency rooms, for which we citizens pay, or they get sick and become a burden on society, for which we also pay.

    We know that people who pay tax are entitled to government services. So to deprive all illegal aliens of federal support is unconscionable and may be unconstitutional.

    We know illegal aliens are not going home. They will be here with us until they die, as will their children and their children’s children. Of course many of these children, and most of the children’s children will be born-in-the-U.S.A. citizens. Shall we deny these American children health care? Shall we deport their parents?

    We know illegal aliens are people. They have families. They love each other and they love God. They go to churches. They build; they clean; they bathe; they plant; they reap; they cook; they eat. They have hopes and fears and pride and regrets. They mourn. They are very much like you and me, except fate has not given them that piece of paper we were so fortunate to have received, most of us merely by the accident of being born in the right place. They are not monsters or criminals, any more than we are.

    Most right wingers are Christians. Are we naive to expect Christians to be more Christian toward their fellow human beings?

    We don’t know what President Obama really believes. He’s a politician. But it is sad to see a President pander to the xenophobes who espouse hatred of a minority, under the guise of law, especially when there is so much we don’t know.

  11. comment number 11 by: SteveinCH


    For what it’s worth, I’d try to avoid sentences that start with we all know as in “we all know that people who pay taxes to the government are entitled to government services”. I don’t think we all know that. I pay taxes to the government and there are quite a lot of services (most of them in fact) for which I do not qualify. Let’s see there social security, medicare, medicaid, afdc, farm price supports, housing assistance under tarp or talf, the litany would be quite long.

    Your contention that there are 70 million illegals in the country seems like a bit of hyperbole to me. I agree we don’t know the number but I don’t know any reasonable study that argues the number could be 70 million or even 30. Please provide some cite if you can.

    Christianity is a set of beliefs that governs mans interaction with his fellows, not government interaction. If you would like to criticize me for what I contribute to my fellow man as being insufficiently Christian, I’m happy to engage. The fact that I think government should not force Christian charity on the entirety of the country does not mean I am a Christian. To the contrary, the values of Christianity are applied by individuals without force or they are not indications of those values at all.

    I have no doubt that some people who oppose providing benefits to illegal immigrants are xenophobes. To argue that all people who hold that belief are xenophobes is either hyperbole or a sad misunderstanding of the beliefs of your fellow citizens

  12. comment number 12 by: Brooks


    Good luck with this Rodger fellow (lol). I’ve seen him elsewhere insisting that all our fiscal imbalance problems would be solved, and our economy would thrive, if the Fed just printed as much money as we want (the federal government) to spend. (Rodger, if I’ve misrepresented your view, please advise) And wherever he posts he links to his website where he tries to sell some whack-job book (probably self-published, in effect) advocating this lunacy.

    And as for his line, “We know illegal aliens are people. They have families. They love each other and they love God,” I suppose he thinks believing in God is a requirement to qualify as a person and/or makes one more worthy of help and compassion from others. I would beg to differ, and his implication is quite (obliviously) jackassy.

    As for your paragraph on Christianity and government, although I’ll stay away from theology, if the question is one of morality, I would say that if one accepts as a premise that there are some ways in which government is the only or best way to help people in need (for example, many cases of immediate disaster relief, or military intervention to stop genocide), an argument can be made that preventing government from doing it (on libertarian ideological/philosophical grounds that philanthropy should be restricted to private, individual decisions) could be immoral. And yes, people can have different morals and preferences and thus choices of whether or not (or how much) to help people in need, but given the “free rider” problem, I think there are roles for government that would be immoral to stop simply because there isn’t complete consensus and some people wouldn’t want their money taxed for that purpose.

  13. comment number 13 by: SteveinCH


    I certainly agree that there are cases where government is the best (or only) was to provide assistance to people in need. Having said this, I think emergency response is quite different than programmatic support.

    I will leave aside issues of transnational intervention as I agree those are ares that are limited to government.

    What I object to is the use of government to impose a religious driven view on a minority. The interpretation of religion is, in my view, a personal matter. Mr interpretation should not be proscribed for other citizens by use of the force of the government. To me, it is less a libertarian ideological perspective than a fear of precedent.

    I think in these mattters we need to stand on principle. There are too many people who support government intervention when they like the outcome but vehemently oppose it when they don’t. For me, I will oppose regardless of the outcome unless there is a social cost to individual action. For me, it’s a bit like Constitution law. If you are outcome based in interpretation of the constitution, you ultimately open yourself to outcomes you vehemently oppose and deny yourself the best, principle-based argument in opposition.

    In the end, it’s less about the interpretation of religion and more about whether any person’s or group’s interpretation should be enforced using the power of the government. I believe it should not, even when I might personally prefer the outcome. That means I don’t get some outcomes I would like, but I avoid a far greater range I would despise.

  14. comment number 14 by: Brooks


    Re: What I object to is the use of government to impose a religious driven view on a minority.

    Yer preachin’ ta’ the choir on that one, brother! I’m big on separation of church and state, explicit and implicit.

    Re: I will oppose regardless of the outcome unless there is a social cost to individual action

    If by that you mean that there would be no loss of efficiency, no free-rider problem, etc., if left to individuals and private groups, then I certainly consider that a respectable ideological perspective. Using government — meaning confiscation of private property — for spending that would not present those problems if left in the private sector generally amounts to the majority (roughly speaking, as sorted out imperfectly by our political process) imposing it’s morality on the minority, which still, in my view can be appropriate, but there’s room for reasonable disagreement.

  15. comment number 15 by: Jim Glass

    “We have a great infrastructure but it is built around our balkanized insurance markets. “

    Do we ever! The separate states have horribly cartelized, protected, segregated markets.

    Where I am in NYS just two insurers, GHI and Empire Blue Cross, have 47% of the market. In NJ, one insurer, Horizon Blue Cross Blue Shield, has 43%. In Connecticut, Wellpoint has 55% all by itself. This is … not good.

    “The trick may well be either to incent competition with something like the public option, or to aggregate the pool, and auction it off to the private insurers…”

    Why? What’s the point of adding layers of new layers of regulated administration upon old layers of administration — just to counter the effect of the old layers? It seems to make more sense to look at the cause of the current market segregation and remove it.

    The cause of all the market segregation and cartelization is very simple, and it is not “the free market” — it is federal law.

    For historical reasons during WWII, long obsolete today, the Supreme Court allowed (encouraged) Congress to enact the McCarran-Ferguson Act, which as to commercial health insurance exempts state governments from the Commerce Clause — so state regulators can block all interstate competition at the border and establish other anti-competitive regulations as they wish — and which also exempts state-regulated insurers from anti-trust law.

    This is really extraordinary, in the bad sense. No other business ever got such treatment — not even alcohol after the repeal of Prohibition.

    The Commerce Clause and anti-trust laws exist for reasons. What does one expect to see in a major interstate industry in regard to which local politicians are exempt from the former and businesses from the latter? What you’d get in the caricature of Latin American protectionism in the bad old days — “iron triangles” of “champion” insurers charging above-market rates, protected from competition by politicians who impose all kinds of protectionist mandates, with big unions expanding their gold plated tax-favored benefits in the process, all sharing the financial and political booty. Which is exactly what we’ve got in about 20 states.

    In NYS where this situation probably is worse than anywhere there’s also Dennis Rivera’s hospital workers union, one of the most powerful political forces in the state, driving up mandated benefits at every chance. Look at these premium costs which are five times that in many other states.

    The regulated-by-government anti-competitiveness is hard to exaggerate. A 55-year-old man can go online at and be offered 99 policies in Pennsylvania (from $140 a month) but only 12 in NYS. I mentioned previously a NYC doctor who was set to open a string of low-cost clinics charging a flat rate $79 per month. The state put him out of business saying he charging a flat rate for service is “insurance” (tell that to your cell phone company) and he was charging too little, below regulated insurance rates. Putting a firm out of business for charging too little is a pretty darn clear violation of federal competition law — but the feds have exempted the state regulated insurance industry from it.

    OK, say the objective is to “incent competition”, does it make more sense to…

    * create one new public plan that will have to meet all the existing mandates in every state, as all local protectionism, cartels, and anti-trust immunity stay in place?

    * repeal McCarran-Ferguson, open inter-state competition, bar states from anti-competitive practices, break up the local cartels, make 87 more health plans available to 55-year old men in NY, and let medical entrepreneurs innovate new flat-rate services and such.

    It’s not a very hard question for me — but the problem in political reform is that every big interest group first has to keep what it has and then will only negotiate from there.

    In particular, take NYS, here the entire “iron triangle” of state politicians, big insurers, and big unions both taking and providing health services, are major players in the Democratic power structure and have no interest at all in making themselves subject to competition. Dennis Rivera is not giving up anything he’s gained gracefully.

    So the only new “competition” being discussed keeps all the current anti-competitive practices in place. (In fact, it could make Dennis even happier. Once coverage becomes universal and right-to-purchase is enacted, with the feds picking up costs for those who can’t afford policies, mandates can go up even higher, because if more people are priced out of the market the feds will pay for them. See Massachusetts. )

    We have a market for health care that’s been shattered and rigged like no other market in this country has ever been, by regulations layered on 60 years ago. Now we see that’s created competition problems. But rather than repeal those regulations, we have to keep them to get the votes of all the stakeholders in them, and now lay on another layer of regulations and artificial market manipulations on top of them to counter their effect.

    Considering “the law of unintended consequences”, and the ham-handedness of politicians designing economic systems, we can guess that this in turn will result in … well, you know.

    Call me a cynic, but I am not sure this process equals progress.

  16. comment number 16 by: Jason Seligman


    I enjoy aloof the detail and the perspective in your post. I agree that interstate commerce is muted in the face of segregated insurance market, and the industry, or at least some of the larger players have been saying ad much for a long time. Perhaps more even that “tort reform” (of of the née-right’s least sexy titles) this is something that should be added to the mix. It would allow a co-op, or private market entrant to pool more efficiently improve competition and should be beneficial to a well standardized (regulated) market.

    As for your question as entry, yeah the auction I envision would in essence hot-wire the old bad regs, but I think it actually work netter in the standardiEd world you propose.

    Finally to empasize your point once more let’s acknowlege that Medicare&caid bypass the state’s disparities by and large
    from an adminstrative point of view, so this is one place we really should be more sympathetic to the participants in todays malfunctioning market

    Bravo Jim!

  17. comment number 17 by: Jim Glass

    “Bravo Jim!”

    I’m sending this to my mother. ;-)

  18. comment number 18 by: Jason Seligman

    …and it should have been “a lot” not “aloof” in that first line…. in case Mom wonders.


  19. comment number 19 by: Rodger Malcolm Mitchell


    Re. “People who pay taxes are entitled to government services,” I never said entitled to *every* government service. But people who pay FICA should receive Social Security and Medicare at the appropriate times, and if health care becomes universal, don’t you think taxpayers are entitled to its benefits.

    Re. the 70 million upper estimate, I can’t remember the cite and don’t want to take the time to find it. Here’s an estimate of 40 million — Will that do? The point is the same.

    I don’t think people can say, “I’m not being mean spirited; it’s the government that’s doing it. I’ve seen the manic, frothing mobs. But you’re right, not all anti-aliens are xenophobes.

    The subject can’t be discussed without making generalizations. Sure, not “all” and not “every.” So feel free to put “most” and “many” wherever you please.

    Now that we have picked at details, what about the overall meaning? I say these people and their children (some of whom are citizens) should be covered because they have paid for it, deserve it, it’s cost efficient to do so, and it’s morally right.

    Rodger Malcolm Mitchell

  20. comment number 20 by: Rodger Malcolm Mitchell


    1. Yes, you misrepresented my position.

    2. I suspect you neither have read nor have any idea about what’s in the “whack-job” book. I’d be glad to read your book, however. Where can I get it? Or are you limited to sneering?

    Rodger Malcolm Mitchell

    Rodger Malcolm Mitchell

  21. comment number 21 by: SteveinCH


    On the question of payment equaling qualification, I still disagree I’m afraid on two grounds. First, I don’t believe that paying a tax qualifies you to receive a service. As an example, I pay SS and Medicare taxes today but don’t receive either and, assuming I am reasonably well off upon my retirement, I would prefer the government not give them to me because paying benefits to the wealthy is nothing more than subsidizing intergenerational wealth transfer, something in which I cannot perceive a public interest. So I don’t agree with the generalization.

    Second, I don’t believe that people who violate the law to enter the country are entitled to the same benefits as those who have not. As long as we as a country choose to limit immigration, those who enter illegally should have a different right to benefits than those who do not. You clearly have a different point of view but this discussion is at the level of philosophy.

    On the question of cost efficiency, I simply don’t know the answer and I rather doubt you do either. What I do know is demand will rise with coverage but the cost of coverage will decline. How that equation will sort is beyond my ability to predict.

    As to the moral argument, I again will respectfully disagree, though not specifically as it relates to illegals. I do not see a moral obligation to provide health care to others. In my mind, there is a difference between a moral obligation and something that is morally positive and a difference between fulfilling a moral obligation out of choice and fulfilling one because you have been forced to do so. Using government to force moral obligations is something that I will resist regardless of whether I agree with the moral obligation in question.

    As for your point about generalizations being details, I would simply suggest that when posting in the future, you use some, many, most and all when you mean the word in question. They may be details to you but to many (myself included) they will not be.

  22. comment number 22 by: Rodger Malcolm Mitchell

    Distance makes the difference. If you knew a seriously ill child, you would try to help. You might even offer your own money if that is needed. You surely would not first ask, “Are you a citizen?”
    But you don’t know any undocumented aliens. They are distant. They are numbers, not even people. So it’s easy to turn your back and hide behind what most people know is a strange, unfair, unfeeling set of laws — our byzantine citizenship path.
    Yes, they are illegal. Their crime is wanting to live here. Whether this crime actually has hurt or helped the U.S. is heavily debated. Not much proof either way. Nevertheless, there are angry people who say, “They are lawbreakers, so they should be punished to the full extent of the law.”
    Why so harsh? Why so irate? We have drunken drivers who are more a danger to Americans than the undocumented. They get a tap on the wrist.
    I guess it boils down to this: If you personally knew a person whom you later discovered was an undocumented alien, would you report him to the authorities, or would you aid and abet his “crime” by being silent?

    Rodger Malcolm Mitchell