After SCOTUS Ruling, Then What?
Over at the Huffington Post, Sanjay Sanghoee resurrects the left wing obsession with government-run insurance with a paean to the “public option,” a blistering diatribe against the very idea of private insurance — all warming up to this zinger:
If private insurance companies can compete with the public option on price or service, more power to them; but if they cannot, then to hell with them.
Earth to Sanjay: Do you know who runs Medicare? It’s BlueCross, Cigna and other private (for-profit) contractors. Do you know who is managing the care of about two-thirds of all Medicaid enrollees? It’s the same evil villains.
The government doesn’t know how to run an insurance company, let alone compete with private carriers. Our problem is the exact opposite: There is really no important difference between public and private insurance in this country. The former is public sector socialism. The latter is private sector socialism. And socialism, as 99% of the rest of the world has come to discover, doesn’t work.
The U.S. government is in debt to the tune of $107 trillion dollars from unfunded liabilities from Social Security and Medicare. These are two services politicians decided the government should offer. The United States Postal Service is losing billions and may stop Saturday mail delivery. This is another monopoly service governments typically run. Since the government’s track record of innovation and staying afloat in the marketplace isn’t that good, what makes Sanjay Sanghoee think it should administer all health insurance for the entire country?
In the ideal world, the profit motive drives businesses to innovate and lower prices, which isn’t good for the businesses but it’s good for their customers.
Insurance, however, is paid for with an EXPECTATION of receiving the product. How much “innovation” have you seen from insurance companies, @Buster? The way an insurance company makes money is to lower costs… which it does by delaying reimbursements and being absolutely unfriendly to their customers. Most of their customers don’t even pay for the insurance, so it’s not like insurance companies have to compete on service either. I would stake a lot of money on the statement that most people have never met the person who chooses what insurance plan they will receive.
As it relates to products and services, there is a huge disconnect in customer and insurance coverage, allowing for many of the things about which Sanjay lamented. Single-payer (meaning government gives people a check for insurance) would probably solve that problem better than a public option, but people have much more control over what the government does than what the insurance companies do.
Also John, Sanjay didn’t say they were “evil villians.” They are workers within a capitalist system, meaning they take orders to put profits above people, though the two are not always mutually exclusive. That Medicare and Medicaid are managed by private companies doesn’t help your argument because they provide services the government tells them to provide. Who gets the money from it is irrelevant.
I see a big difference between public and private insurance in this country. For one thing, a number of the docs that treat me don’t take goverment insurance.
Some of those on the Left eventually want private sector entities completely removed from the healthcare picture so that the government can run everything. For them, it’s just a challenge of how to get there.
@Brian – Agreed.
Informative post Dr. Goodman.
According to John’s post, socialism doesn’t work because it has been proven that it does not work. According to David’s post, capitalism provides incentives to workers to put profits above people. Are we dealing with the worst aspects of both systems in the U.S. healthcare scenario?
@David
“In the ideal world, the profit motive drives businesses to innovate and lower prices, which isn’t good for the businesses but it’s good for their customers.”
“The way an insurance company makes money is to lower costs… which it does by delaying reimbursements and being absolutely unfriendly to their customers. Most of their customers don’t even pay for the insurance, so it’s not like insurance companies have to compete on service either.”
I think this is a gross misrepresentation. If you define “customer” as the individual enrollee, then yeah, the insurance company really has no incentive to court the customer. After all, they aren’t selecting that insurance company, but are more or less being assigned to it, regardless of the amenities offered, by their benefits-providing employer.
However, if we correctly define “customer” as the policy-purchasing company, then we see that insurance companies are just like all others: motivated by profit, and consequently forced to provide competitive services and amenities. You suggest that insurers can get away with treating people like crap because they themselves do not select their carrier. Nevertheless, businesses do have choices when choosing plans, and if there truly were a company that so blatantly abused the insurer-insured relationship, word would get around.
Further, businesses want to attract superior employees to their firm. This means offering competitive salaries and, crucially, offering benefits that people want. This hypothetical insurer that everyone knows is terrible would therefore be weeded out, because firms would slowly understand that offering their plans would undermine their ability to attract talented labor.
To argue that insurers are not constricted by market motivations is disingenuous. There is a competitive supply and ample demand – add in enforcement of property rights and you have the ingredients for a market.
Actually Imrana, John says 99% of the rest of the world has discovered that socialism doesn’t work, which is clearly a false number. I can think of 3 socialist states (1 of which is a very serious economic competitor to the US). The two most populous states in the world are either socialist or have socialist leanings. There still exists a Stalinist state…
Also, much of the world hates Americans because of our military and paramilitary operations opposing communism around the world. It is hardly fair to conclude that socialism has failed when it was facing the largest armies in the world and has still survived.
What the rest of the world has discovered is that American capitalist greed and opposition to labor movements around the world has caused a great deal of suffering… perhaps this discovery is just recently being made in America?
I of course did not say that insurance is not a market, but the purchasers of insurance (customers) are disconnected from the end consumers (enrollees). While there are competitive forces at work, the intermediaries also apply their interests–which are not directly those of the end consumer–thus decreasing the need on the part of insurers to meet the needs of the end consumer.
Also, insurance is not a product demanded by all or often. Meaning, poor service is not reflected proportionally in the value assessments of the end consumer. You also assume that workers have the power to demand a different carrier when service is poor. This is imperfect because A) people put the job above the benefits B) workplace turnover further decreases the actionability of workers to demand a change in insurers and C) the disconnect between those who receive insurance and those who purchase it makes the buying channel opaque.
Rather, I think the more likely scenario when people are weighing employers (if they even have a choice–few do) is the nominal value of benefits in addition to the tax savings value, not the intrinsic value of service.
@Sergio,
So much LOLing, I don’t know where to begin.
I guess I’ll start with, “American capitalist greed and opposition to labor movements around the world has caused a great deal of suffering.”
– American capitalist greed has led to some of the greatest advancements in the history of mankind.
– The inventions and new processes brought about by greed and that all-too-pernicious profit-motive have eased suffering around the world and advanced the causes of fighting social ills to unprecedented heights.
-Entrepreneurialism and economic opportunities brought about by America’s historic rise, furthermore, have provided incredible prosperity to workers around the world. Though denigrated by the current administration, outsourcing by the United States has brought jobs to the jobless (what you call exploitation, they call feeding their families).
“Also, much of the world hates Americans because of our military and paramilitary operations opposing communism around the world.” Where to start?
– Countries around the world are not inherently opposed to America’s interventionism. If I recall correctly, there were quite a few big fans of our actions in 1918 and 1941. Thus, there is not a prima facia problem with intervention abroad.
– Countries hated SPECIFIC components of our war on communism (Vietnam didn’t go all that well), but others were much more popular like the Korean War.
– You entire claim is incorrect (http://americaintheworld.typepad.com/home/opinion_polls/) it would seem that the world dislikes the United States, but that this unpopularity did not settle until long after the fight against Communism was over.
“I can think of 3 socialist states (1 of which is a very serious economic competitor to the US). The two most populous states in the world are either socialist or have socialist leanings. There still exists a Stalinist state…”
– Please name all 3. I’m curious about your classification standards.
– Lol that you claim China, much less INDIA, to have socialist leanings. That is so laughable I don’t know what to say, but I think I’ll just offer you a simple fact that command economy does not equal socialism. What a jokester.
– If you have any basis at all for which states have “socialist leanings,” North Korea would be there – a veritable paragon of brotherhood and prosperity that is.
@Ambrose, I hope you won’t object to my answering your concerns in reverse order.
North Korea is of course the last Stalinist state. Stalinism is only one branch of Marxist ideology–that of the Bolshevik authoritarians. It is not, however, the only Marxist ideology.
Socialism in the most basic sense is public ownership of the means of production. Command economies are public control of the means of production. Economically, that may be a slight difference but philosophically there is none.
Vietnam, Laos, and Cuba were the three I could think of.
The preamble to the constitution of India reads: “WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens:
JUSTICE, social, economic and political;
LIBERTY of thought, expression, belief, faith and worship;
EQUALITY of status and of opportunity;
and to promote among them all
FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation;
IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.”
If a nation doesn’t become socialist by declaring itself socialist, then I admit I probably cannot argue to your standards.
Your link proves nothing, only citing opinion polls dating back 10 years and countries hardly representative of our foreign actions. Also, the Soviet Union (and thus, for the most part, our war against communism) fell apart a decade earlier.
Indochina is only the most popular example of an anti-communist failure on the part of the US. Southern Europe is a good example. Iran, Afghanistan, Iraq, Nicaragua, Cuba, much of South America, the Caucasus region, etc. all equally apply.
Everything in Eastern Europe after WWII is also a good example. You could hardly argue that our involvement in WWI caused people to like us (it led to, after all, the rise of nationalist socialism in Germany).
Also, I never said countries were opposed to interventionism, I said anti-communist intervention policies that defined American foreign policy throughout the cold war and did, indeed, create a great deal of suffering around the world including what amounts to war crimes on the part of every president since Nixon (save perhaps one or two). It can hardly be said that it was the communists who led these actions…
The only reason America and Great Britain do not own the rest of the world is because of nationalist movements, most of which were highly socialistic and faced severe opposition from both Britain and her strongest ally. Certainly, trade with America does more for foreigners than war, but our actions throughout the 20th century consisted mostly of the latter.
Have you ever met someone who invented something and said they did it so they could make a profit? Is creativity dependent upon the profit motive? Would the Sistene Chapel be less beautiful had Michaelangelo been paid less by the Catholic church?
I never said it hadn’t led to many social advancements, but merely that those were not devoid of social detriments.
Sergio, I don’t think you’re analyzing those various conflicts fairly. The overthrow of Mosaddegh in Iran was a success. Now, the eventual loss of the Shah was a failure, but that occurred at a later time.
So in the case of Iran, for example, one could argue that there has been both success and failure in U.S. policy.
Reza Shah was overthrown by Homenei (both of those are probably spelled incorrectly) because the Islamists didn’t like that he was Western and the secularists didn’t like that he was a puppet of US policy.
I will cede that the Shah’s social policies (banning the Hijab, for instance) were better than the current status quo (where Hijab is enforced by stoning), but that also came along with a great deal of repression and monarchical recklessness.
On top of the fact that the overthrow of Mossadegh (again, probably spelled incorrectly) led to the 79 revolution and was the reason for the hostage crisis, I fail to even see how that could be called a “success” in any way, shape, or form. Mossadegh was overthrown for instituting such communist policies as… the elimination of what was basically agrarian feudalism? Public works? Control of Iranian oil against the imperialism of Britain and the US? How did the opposition to those things help the Iranian people?
If you can’t see that every nationalist or socialist threat to American and British capitalist control of world resources in the 20th century was met with a military action on the part of one of those two countries, then you quite simply don’t understand American foreign policy.
I won’t say all of those “interventions” were all bad for the people of those countries, but it’s hardly fair to say that socialism has failed when it is an ideology that has been so viciously oppressed by war. Saying 99% of the world has discovered that socialism doesn’t work (aside from being an exaggeration) would be like saying 99% of 2nd or 3rd century Romans had discovered that Jesus wasn’t the messiah. You would make that discovery too, if it meant you wouldn’t be killed by American capitalist imperialists.
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