Showing posts with label free market. Show all posts
Showing posts with label free market. Show all posts

Wednesday, July 22, 2009

Empathy, Taxes, Personal Responsibility, and Healthcare Reform

Two years ago I wrote a four-part blog post presenting answers the questions: Who is worthy of having adequate health insurance and high-value (safe, cost-effective) care; and what makes them deserving? And who, on the other hand, is unworthy; and what makes them undeserving? It includes debates with others about issues including free market forces, as well as government and individual responsibility, universal healthcare, taxation, smart economic growth, and problems with healthcare insurance. Here's the link http://curinghealthcare.blogspot.com/2007/09/worthiness-socialized-medicine-and.html

In January '08, we presented an in-depth analysis of the presidential candidates' healthcare proposals. The analysis included a discussion that compared (a) a publically funded universal healthcare program that included a private insurance to (b) a single-payer program (no private insurance) at http://www.nhds.com/candidate_analysis/healthcare.htm#EN3. Then we discussed whether it's necessary to increase taxes in order to fund a publically-funded universal healthcare system at http://www.nhds.com/candidate_analysis/healthcare.htm#EN4. The bottom line is that the Republicans' main focus appeared to be on minimizing taxes and making only minor changes to our current healthcare system, while the Democrats appeared more focused on providing some form of universal coverage (be it single payer or a hybrid system). The debate today seems to be along the same lines.

From a psychological perspective, here's how I see it:

Many fortunate people with plenty of money or a secure job with an excellent health plan do not want to pay more taxes nor to risk changing the coverage they believe benefits them; even if such changes may benefit many others who are suffering.

Some of those fortunate folks likely experience cognitive dissonance (i.e., are conflicted) when considering the plight of the millions of Americans who cannot afford adequate insurance and top quality care. Some may reduce this emotional discord/distress by believing that those less fortunate are somehow less deserving and should even be punished for having health problems. They may, for example, believe in the "moral hazard" myth, which states that providing adequate health insurance for all encourages risky and wasteful behavior by the insured persons since the cost of healthcare consumption is paid by someone else. So, they conclude that there ought to be considerable "skin in the game" (i.e., out of pocket expense to reduce consumption), which can have a devastating impact on the working poor and other struggling to make a living; see http://curinghealthcare.blogspot.com/2006/11/moral-hazard-idea-myth.html.

Interestingly, one key thing absent from all this is EMPATHY (i.e., the ability to put oneself in the shoes of another). That is, it's much easier for many who are better off financially and health-wise to blame those who struggle and suffer for their own woes, than it is for them to feel others' pain and willingly pay increased taxes to help them. This is not surprising since:
  • Judge Sonia Sotomayor Supreme Court confirmation hearings in which empathy—the quality President Obama has proposed as a criterion for his judges—was considered a dirty word.
  • Many of the bankers, brokers, and others responsible for our economic collapse didn't feel empathy for those losing (or destined to lose) their homes while they profited.
  • Empathy is often absent in the health insurance industry as evidenced by insurance exec turned whistleblower Wendell Potter, who spoke out against health insurance industry at http://www.democracynow.org/2009/7/16/former_insurance_exec_wendell_porter.
Based on all this, I'm not at all surprised with the current opposition to universal healthcare—I'm saddened by it—but not surprised. After all, the "me generation" and their children are in power in the USA … and focusing on "me and mine" to the exclusion of others does not promote empathy (or compassion). This bodes very poorly for the future of our civilization, btw!

I'm not without hope, however. President Obama appears to be pushing strongly for change in a direction that will help level the playing field and improve the lives of those who suffer. Increased taxes from the more fortunate to help the less fortunate cannot be avoided, imo. So, we can expect pushback from those lacking empathy.

In my next post, I have a contentious debate with people working in the health insurance industry.
Related links:

Friday, September 14, 2007

Universal Healthcare, Free Markets, Taxation, Smart Economic Growth, Government, and Insurance Problems

This post is a continuation of my last post, in which I debate with someone the issues of universal healthcare, worthiness, free markets, taxation, smart economic growth, problems with healthcare insurance today, and more. As always, I welcome your feedback.

In this round of the debate, he began by referencing the following statement I made in a previous post: “The best kind of Capitalism fosters 'smart economic growth' through the right combination of small company entrepreneurial (technological) innovation and big- firm market capabilities, without restrictions on free trade, brings about a higher standard of living for just about everyone in that country.”

He then said: This is essentially what I have been espousing, with the state keeping the corporations from manipulating a free market, and leaving the rest alone. Incentives for productive entrepreneurship being profit, and the disincentive for unproductive entrepreneurship being hunger, no further incentive is required.

Next, he pointed to a reference I made in my previous post to France Lappe’s book, “Democracy’s Edge,” and he said ...

I would flatly disagree with Ms. Lappe, arguing that free markets are NOT the product of democratic gov’t, but that only a democratic gov’t will ALLOW free markets. The apparent battle between the free market and the gov’t issuing from the gov’t failing to keep the welfare of the people their priority by interfering with the free market, and allowing the corporation to interfere.

‘If our government begins to spend money wisely and without corruption; if it implements policies to control waste, inefficiency, fraud, greed etc’ will be a point we disagree on, as I have no confidence this or any other gov’t is capable of doing so. None has so far. Gov’t is inherently evil, as it attracts those who desire power over others, however altruistc, or not, their motive.

Those who find themselves in a poor economic situation, through no fault of their own, should be taken care of through charity. That’s the problem with entitlements, the recipient is “entitled” to the benefit, automatically deserving, while with charity, if the recipient is of no inclination to improve their lot, is ungrateful, or is deemed unworthy for some other antisocial reason, the charity may stop. The advantage to the donor of charity is that it promotes an individual’s humanity, and their sense of community. Something the IRS does not. We are a charitable people, and the gov’t has taken advantage of it. We need a drastic REDUCTION in taxes. The gov’t has stolen our humanity and used it to buy votes.

I am convinced that most of the blame for our current health care problem lies with industry providers. Their inefficiency, incompetency, and exaggerated opinion of the value of their service, has put their pricing well above what the market will bear. Add to this funds spent on research (much of them by the gov’t) to develop methods/ equipment/etc. that we as a people can’t afford. In a free market, prices automatically level at what the market will bear. The health care industry has exceeded that level. There will be a correction, one way or another. If the gov’t gets involved, they will dictate fees and services, and we will get $1 of service for $2 in taxes, that will cost $3 to deliver. In other words, much like what we have now, only instead of not being able to afford health insurance, we will be taxed for it, whether we can afford it or not.

And then I replied ...

Where we agree on the following:

1. The benefits of smart economic growth
2. The state keeping the corporations from manipulating the market
3. Our Gov’t having an inherently negative side because it attracts those who desire power over others with less than altruistic motives.
4. The need for a drastic reduction in taxes (and I’d add: on the middle class especially)
5. The Alexander Tyler quote
6. Stopping those who can afford to pay at least a portion of their healthcare, but who manipulate the system to receive free care through taxpayer handouts.

Where we disagree:

1. Since we agree that government is needed to keep corporations from manipulating the market, and since we agree that our gov’t fails to do (and actually encourages corporate manipulation), then we don’t have a free market; instead, we have a corporate controlled market that has emerged due, in part, to lack of good gov’t policies and the existence of bad ones.

2. I do not blame any group—not the healthcare providers, patient, insurers, employers, big pharma, labs, medical device makers, nor researchers—for the current healthcare crisis. Yes, we do agree that there is plenty of greed, incompetence, inefficiency, ineffectiveness, ignorance, inertia, corruption, etc., but these human shortcomings are manifested by virtue of our badly broken healthcare system. But I see it as a system’s problem that actually rewards poor performance (e.g., fix it and fix it again when it breaks), despicable processes (e.g., insurance practices exposed in the movie SICKO), as well as excessive pricing and other ways to “play the system.” I contend that we need gov’t controls to fix the system because no one else will do it, but I don’t trust our current gov’t to do it either!

My hope is that we will develop a healthcare strategy that will change this by making gov’t responsible to the people. I don’t see the need for tax increase to accomplish this, but I don’t have the numbers to support this claim.

He responded ...

Our first disagreement isn’t one. We appear to agree that our current criminal electorate, acting outside the boundaries of the Constitution, and failing to act inside those boundaries, has created the problem by interfering in the operation of a free market.

Our second disagreement remains, as I see no possibility of one of the agencies largely responsible for the problem, successfully solving it. I suspect that soon (2-4 years) we will have some form of UHC [Universal Health Care]. I doubt it will be fiscally sound (Medicare, social security), or will provide care of any quality (Veteran’s Administration).

I have no confidence in a man who “believes” the Cuban gov’t, or ours for that matter. Mr. Moore does not believe any of what he “exposes”. He has merely found a lucrative market for his fictitiously manipulated “research” among those of liberal/socialist persuasion.

The only way we can SUCCESSFULLY solve the problem is to find a way to force the gov’t to act responsibly, and within the boundary of the Constitution, by “promoting the general welfare” not financing it. A tall order indeed

To that, I responded ...

OK, you don't trust Michael Moore. So here are problems with the current healthcare economic models, as related to insurance, which create a chaotic system and encourage destructive practices (with references from this page of our Wellness Wiki):
  • Cost-shifting — Charging higher prices (above cost) to one group of patients in order to offset lower prices (below cost) to another group of patients based on their insurance coverage.
  • Price discrimination — Charging different patients different prices for identical healthcare goods or services irrespective of cost.
  • Cherry-picking — Choosing to provide insurance coverage to the young and healthy, and treatment to the most profitable patients, while not providing the same level of coverage and care to others.
  • Retroactive coverage cancellation — Payers cancel coverage retroactively for people who need expensive care in order to escape its obligations to members who become seriously sick.

A more sane payment system would encourage continuous quality improvement, while controlling costs and insuring everyone through shared risk. It would recognize the responsibility of all stakeholders in creating a sustainable healthcare system that brings greater wellness to all in an effective and affordable way.

Methods having been proposed include pricing transparency, informing consumers of the value of care providers render in terms of performance and cost, and pay-for-performance. There are serious issues with each of these proposals, but they may contribute to the development of a better payment system. In addition, it may be useful to give consumers incentives for maintaining healthy lifestyles and complying with sound medical advice.

Anyway, I happen to agree in part with your final point: The only way we can solve the problem SUCCESSFULLY is to find a way to force the gov’t to act responsibly, and within the boundary of the Constitution, by “promoting the general welfare” not financing it. A tall order indeed.

The disagreement, or should I say confusion, with that strategy is that, even if our gov't is forced to act responsibly, it has to spend considerable sums to promote general welfare through writing and policing the implementation of radical new policies that foster the delivery of high-value care, as well as supplementing coverage for those who simply cannot afford it. In other words, I just don't know how anything can be accomplished without the wise expenditure of tax monies. Do you?

He responded ...

No, nor do I expect the wise expenditure of tax revenue, it is seldom done.

A few things not adequately addressed that would require relatively little revenue:
  • The monopoly of healthcare by the AMA through the FDA.
  • The ineptitude of the FDA. That is, the FDA should not approve alternative health care practices not endorsed by the AMA. That which is not approved, or endorsed, will not be insured, and, in fact, may be criminally prosecuted.
  • Policing/regulation of the insurance companies (corporations).
  • Policing/regulation of the provider companies (corporations).
  • Eliminate gov't sponsored research, except in the most dire national situation.
  • More gov't control of medical licensing. (doctors mostly police themselves).
  • Criminal charges and sentences for fraud/theft equitable to any other common robbery. The only difference between “white collar” and “blue collar” crime is how it is dealt with. Theft of your life savings through fraud is just as violent as a mugging.
  • Elimination of regulation defining what groups are eligible to negotiate with insurance and/or care providers. Most states currently have strict regulation, which is obviously a protection of the insurance/provider companies.
  • Here is an idea that just popped into my head. Reduce the tax bill of all individuals by the amount they spend on their own, or their family’s, non-elective health care. I’ll have to think about that.

Monday, September 10, 2007

Worthiness in Capitalism, Free Market Forces, and Government and Individual Responsibility

I began this series with a post that examined the issues about universal healthcare and worthiness, which led to a heated discussion that continues on another forum. In this blog post and my next, I will represent a debate I had with someone arguing for a “free market” approach to healthcare in which human value is measured by one’s wealth and government monies ought not to be used to ensure care for everyone.

Following I present his initial points and give my replies.

Point 1) He wrote: “Our value to our society is measured by our wage.” In other words, the value of a human being—the essential/basic/inherent worth of a person—according to the American Capitalist model, is measured by how much money one makes/has.

[My reply] Yes, this is a shameful reality of our society. The more wealth you have, the more “worthy” you are considered and the more “valuable” a person you are. That’s crap! The wealth you have, the more you can buy … PERIOD! It has nothing to do with your inherent worthiness or human value. In fact, human worthiness and value are just concepts; there are no such things. Even the concept of “deservingness” is made up.

Yes, there is such a thing as “buying power,” but the question is whether it should apply to the delivery of essential healthcare. One’s opinion on this matter, I suggest, depends on one’s wealth. People who can afford excellent insurance and cover out-of-pocket costs would say they deserve (are worthy of) better healthcare than a homeless person. That’s because our Capitalistic system promotes such an irrational belief. The reality is that they can afford better care only because that’s the way our economic system operates. But if they have a financial catastrophe, they will be reduced to the realm of the unworthy … the undeserving … and, I bet, will suddenly change their perspective on who should have access to good care.

That means everyone, no matter how much money and possessions one has, is worthy of the best possible healthcare.

Point 2) He wrote: “My friend, you have a serious psychological problem with the ordinary general sloppiness of human existence. Saint that you are, you are never going to make it tidy. People are just messy.”

[My reply] While I never claimed to be a saint, I do try to think and act wisely, although I’m not always successful. Being human, I realize that I, like everyone else, am a fallible creature with all sorts of weakness I must recognize and deal with in order to develop my potential. So, yes, humanity is “sloppy,” people tend to think irrationally and overreact emotionally, seek pleasure and escape from life’s pains/frustrations in self-destructive ways, be short-sighted, be greedy and self-centered, engage in wishful thinking, let their egos get in the way, be self-deceptive, and so on. I’ve spent the past 40 years studying human nature and almost two decades treating psychological disturbance, so I know much on the topic. Anyway, you’re right: Humanity is never going to be “tidy” (that would take mass enlightenment and major social evolution).

Point 3) He wrote that: "[I appear to condemn] the American Capitalist model as some villain passing judgment on us…It is, after all merely a modified economic extension of natural selection, a process that does a fine job improving the species.”

[My reply] Well, I’ve never said that any model can be villainous our pass judgment; only people can act in ways defined as “villainous” and pass judgment on others. But the American Capitalist model does encompass rules and processes that enable people to claim certain groups to be more worthy of good healthcare than other groups based solely on one’s material wealth. I do have a problem with that.

As far as natural selection goes, I take issue with your claim that our modified economic extension of natural selection has been improving our species. After all, our species is as messed up as ever and, with all the negatives in the world today (from global warming to religious warfare to political corruption to the concentration of wealth), we are doing a poor job in converting them to positives.

What it has help improve, however, is the quality of life for many people, which is good, even though the degree of improvement is increasingly lopsided in favor of the wealthy and against the middle class, but that’s another issue.

Point 4) He wrote: “I'm not interested in living in a mud hut so I can afford to pay my tax bill to support universal health care.”

[My reply] Neither am I. Although I don’t have the means to do the actual research and number crunching, it seems to me that reducing waste in our healthcare system by delivering high-value care consistently, by focusing on prevention and effective self-maintenance, and by minimizing unnecessary administrative overhead, as well as by reducing waste and (legal and illegal) corruption in government and reallocating our national resources, then we could pay for universal healthcare without increasing taxes.

BTW, I do think a system such as QALY should be instituted as a means of controlling costs, and that we should focus more on developing more effective and efficient ways to

He then wrote:

It appears you support a socialist economy in general, since "the American Capitalist model" also passes judgement regarding housing, education, clothing, food and drink, etc. In a Marxist "Shangrila", what motive would the species have for improving their condition. Without struggle, there is no advance. What motive for anyone to excel at anything, when the wealth they earn is confiscated "for the public good" and those without ambition, industry, or moral conscience, are considered deserving of their share.

The beauty of a free market system is that if you have no worth to society, you are immediately made aware of it by your poverty, and thereby motivated to develop some worth. I find nothing shameful about it. The poorest among us are living longer, healthier, wealthier lives than we have in any other period in human history. While there are those few that are unable, through no fault of their own, personal charity is the moral solution. The problem being the gov't has usurped this very human role with their handouts and ridiculous taxes. They have stolen our humanity, and used it to buy votes.

If we are going to use a totalitarian method, let's cap the earnings of everyone in the medical profession at about twice the median income. That would be just as fair as socializing health care (and may be one of the end results).

I applaud your altruism. I am afraid, however, that your lofty goals would require as much bureaucracy as we have now, possibly more. The only way to bring waste, inefficiency, fraud, greed etc. under control, is with free market forces. The corruption in an unconstitutional gov't is the biggest hindrance we have in reaping the rewards of a true free market. They are no more likely to surrender their power to socialism.

…I am a person of moral conscience, and have no desire to burden my countrymen with my problems.

The EARNING of wealth is the measure of our worth to society. If you have value to society, someone will pay you for it (without the gov't putting a gun to their head).

And I responded:

According to Baumal, Litan and Schramm’s new book, “Good Capitalism, Bad Capitalism,” the Capitalistic model, in general terms, is an economy in which a substantial proportion of its means of production (farms, factories, etc.) are in private hands rather than owned and operated by the govt. They argue that the best kind of Capitalism fosters “smart economic growth” through the right combination of small company entrepreneurial (technological) innovation and big- firm market capabilities, without restrictions on free trade, brings about a higher standard of living for just about everyone in that country. I’m certainly not at all opposed to this. On the other hand, there is “state-guided” Capitalism, in which government tries to guide the market by supporting particular industries it expects to be winners, and “oligarchic” Capitalism, in which most power and wealth are held by a small group of people. There are pros and cons to each form, but the first two are the best way for Capitalism to serve the greater good, and American Capitalism has that potential. But what’s needed to sustain it, they contend, is three preconditions: (1) Adequate incentives for productive entrepreneurship, (2) disincentives for unproductive entrepreneurship, and (3) continued rivalry among and innovation by large firms. All this require government regulation, but that’s not socialism.

What seems to be happening is that American Capitalism is becoming oligarchic by virtue of not having truly free democratic markets.

Although Baumal, et al. say nothing about “free markets,” Frances Moore Lappe, in her book, “Democracy’s Edge,” argues that there is no free market. She writes: “In complex societies like ours, markets that work to create wealth for all are the product of democratic governments. The market depends on truly representative government—the obvious point that is lost on those who see the market and government in eternal battle. Also …we’ve been taught that there’s only one way [or organize a market]: Make business decisions using a single criterion—maximum return to shareholders. So every decision returns wealth to people who already have it. … [No wonder] the richest 1 percent of American households now control more wealth than the bottom 95 percent combined. … We’ve been made to believe that this game of concentration…’is fundamental to the success of capitalism because it weeds out the weak and allows the fittest to survive … [but what] it really does benefit is a select few who know how to play this new game while it threatens almost everyone else.’” (pgs 63-64).

Now I don’t claim to be an economist, I don’t promote a “totalitarian method,” and I never thought of myself as a socialist; but it seems to me that our government has an important role to play if our form of capitalism is to benefit the masses …and it is failing miserably. I’d rather see a government bureaucracy assure healthcare for all, than assuring the continued concentration of wealth.

If our government begins to spend money wisely and without corruption; if it implements policies to control waste, inefficiency, fraud, greed etc.; and if people were charged for healthcare based on their ability to pay … I believe we could support universal healthcare without the tax increases you fear.

In many ways, we actually seem to be in agreement.

My problem with defining human worth in monetary terms is a philosophical/psychological issue, as well as a moral one. If poor people have no worth to society, as you say, then do they have any worth … or are they just worthless nothings who better get motivated to become worthy by making good money, or else die of untreated illness because their poverty make them undeserving of the care received by people with financial means? Lack of wealth ought not make someone undeserving of the essentials of life (food, water, shelter, education, healthcare, opportunity, etc.).

Click here for part 4 in this series.