🚀 go-pugleaf

matt@pumatech.com wrote:

> "Bryan D. Buckman" <buckman@tamu.edu> wrote:
>
> > On Tue, 10 Mar 1998 15:52:41 -0600, sacosta@tamu.edu (Sergio Acosta)
> > wrote:
> >
> > >buckman@tamu.edu (Bryan D. Buckman) wrote:
> > >
> > >/snip/
> > >
> > >-> I did read it.  I think it is either phenomenally malign or
> > >-> phenomenally ignorant, I'm not sure which.  Socialized medicine may be
> > >-> a bastardization, but it's based on the same faulty pemise:  tampering
> > >-> with the value the free market places on a good or service.
> > >
> > >/snip/
> > >
> > >
> > >Free market grouppies may want to read Robert Kuttner's "The limits of
> > >Markets", found at http://epn.org/prospect/31/31kuttfs.html -which is an
> > >adaptation from his book "Everything for Sale: The Virtues and Limits of
> > >Markets"-  before you put all your eggs in one basket.
> >
> > Kuttner's analysis of health care is particularly interesting to me,
> > since I tend to favor the Chicago school of economics and its Public
> > Choice offshoot in political science.  Kuttner says that market
> > economics is insufficiently useful in analysing the health care market
> > because health care doesn't have some of the free market principles
> > such as free entry.  I agree.  But he goes on to say that this
> > reflects a fault in free market theory, rather than a fault in the
> > health care market.  I disagree.  I'll leave my eggs in the free
> > market basket, although I think Kuttner makes some ineresting points.
>
>         Moreover, health care is not driven by direct market forces;
>         it's driven by forces filtered by insurance companies. Medical
>         insurance is the primary reason we have such high medical
>         costs - health care pricing isn't determined by what the people
>         as a market can bear, but rather what the insurance industry
>         as a market can bear. Since insurance simply passes off the
>         high costs (plus some added profit) to the consumers in the
>         form of premiums, and the consumers in this case are mostly
>         corporations, the public and public market strenth has almost
>         no direct effect on medical care pricing.
>
>         The insurance industry is using the "collective" effect of
>         thier customers (corporations) to hide the true costs of
>         medical care from the actual recipiants of that care. Of course,
>         we all pay for it in the end (in lower salaries, mainly) but
>         we don't notice it. We also pay *more* than if the money was
>         put back into our salries as cash and health care was direct
>         market driven. The profiteering going on in the "medical/
>         insurance complex" is the single most significant factor in
>         high medical costs.
>
>         When I worked for a company making nuclear pharmecuticals, we
>         would produce a single dose of medicine (including costs for
>         all labor rates, building, fleet of cars to deliver, etc.) for
>         about $50 . We then sold this to the hospital for $250, who
>         then sold it to the patient for $400 . All this price gouging
>         was possible because the insurance industry gleefully paid
>         this $400 price, and then upped the premiums appropriately
>         (with another 10% or so added for themselves). So, a product
>         which should really cost the hospital perhaps $70 and the
>         patient $100 is now a "skyrocketing health care cost" statistic.
>
>         Insurance industries now make a lot of noise about "controlling
>         costs", but don't really do much about it (or do the wrong things),
>         and in any case it is too late. Too many people are too wedded
>         to the status quo to permit any real reform.
>
>         The time to fix all this was in the 1950's, when giving medical
>         insurance as a "benifit" to get people to work for you became
>         a big "fad" with companies. Making medical care direct market
>         driven would be the best solution, but it would be very painful
>         in the short term.
>
>         -Matt
>
>

Well put.  Also, insurance companies are exempt from anti-trust laws.  Market
forces *really* don't effect insurance companies.  Perhaps we should first
rethink how we do our insurance companies first.