Shostack + Friends Blog Archive


Some Chaotic Thoughts on Healthcare

Passage of this bill is too big for my little brain, and therefore I’ll share some small comments. I’m going to leave out the many anecdotes which orient me around stupid red tape conflicts in the US, how much better my health care was in Canada (and how some Canadian friends flew to the US for optional procedures), etc.

I am glad that some of the worst elements of the American health care system are getting reined in. I can think of few worse ways to accomplish that goal, and many better ones. People thinking as I do are why the system perpetuated in the form that it did.

I am pessimistic that the system proposed will achieve its broader goals. The Massachusetts model is cumbersome and ineffective. Optimistic ideas about how prices would fall in a regulated market did not come to pass. The likely next step is a government run health system with supplemental insurance available. I expect this will come to pass in 10-20 years. Medicare seems reasonably well run for an American government program.

The Republican failure to push a coherent and principled alternative will haunt them. Going into the next election cycles, 32 million people will have some idea that the Democrats gave them bread and circuses health care. David Frum describes it as a Waterloo. I’m hopeful but not optimistic that the Tea Bagger Party will follow in the tradition of the Know Nothings and just fade away. I used to be hopeful that the Libertarians would split from the Republicans, but they’ve failed to. I would not be surprised to see the Republican minority shrink in 2010 and 2012, and I think some (but not all) of the shrillness I hear is people who fear that outcome is now inevitable.

I do expect that removing the health care impediment to entrepreneurship will be very positive for smaller companies. I wish we’d apply that same thinking to health care, enable people to make choices for themselves, and let the government own the residual risks, as it does today. But no one offered a credible way to un-couple employment and insurance that would let people keep their doctors, short of nationalization.

Anyway, there’s my negative 8 cents on the bill.

Please keep comments civil.

10 comments on "Some Chaotic Thoughts on Healthcare"

  • PHB says:

    I am pretty much in agreement, which is not something I would have expected given the usual libertarian bent of this blog.

    The big problem with health care as an insurance model is that risk is not randomly distributed. Old people are more likely to get sick than young people. People who have been sick are more likely to be sick in the future.

    When insurers can predict risk too well, the value of the insurance collapses. Unlike fires or floods, illness is an ongoing expense. An insurance plan that the insurer can opt not to renew if the patient gets sick has no value to the customer. But requiring insurers to continue coverage without requiring people to have insurance creates an opposite market failure in which the people who are sick are more likely to keep renewing their insurance when costs rise than those who consider themselves healthy enough to self insure. A self-reinforcing spiral of cost rises ensues in which by the end the insurers are only insuring the sickest patients at a cost nobody can afford.

    Markets are not idols, they are merely a tool and a flawed one. Technology has rendered insurance an inappropriate model, so we either need to abandon the market altogether and go to a state run scheme, or we need to create rules for an insurance-like product that prevents either the insurers or the customers making use of their ability to calculate risk.

    On the ‘civility’ issue. There are a lot of folk out there on the net that have the most bizarre idea of what the bill does as one can imagine. They have been told that the bill is a ‘baby killer’, that it creates ‘death panels’. This morning, I heard a call in program where a caller was arguing that the bill ‘must’ be unconstitutional because the framers of the constitution were ‘men of genius’ who ‘believed in liberty’ and thus could not have allowed such a bill to be constitutional. In particular, the slave-owner Jefferson who signed the Louisiana purchase while admitting he lacked the authority under the constitution was invoked.

    This is what happens when a political party starts listening to the country and starts only listening to itself. A lot of people would like to lay the blame for this at the Web, but it is pretty clear that the principal blame lies with Fox News and the Murdoch press. Both have shamelessly lied from start to finish.

  • Chris says:

    I think your 10-20 years estimate for incremental improvement is optimistic. It took us 50 to get where we are now (100 if you believe take the Teddy Roosevelt endpoint).

    If you look at this cross-nationally, it is clear that there are systems that work, and that various schemes can get you there: France, Canada, Switzerland, and Japan have very different mechanisms, for example, yet it is hard to argue that overall any of them does not provide better *and* more cost-effective health care overall than does the U.S. The feature they all share, of course, is that doctors are paid much less. There is no way that dethroning the medical Ueberclass will go down easy in the U.S., so I think it will be 30 years before we see any real improvement beyond what we just got. This is NOT to say that all the money we waste in healthcare here is due to doctors making too much – clearly it is not. It IS to say they represent an extremely powerful interest group that will fight additional reform tooth and nail, just as the AMA opposed Medicare in the early 1960s (it was incipient socialism, doncha know…)

  • Rob Sama says:


    This has to be the single most obnoxious thing I’ve seen written on the topic.

    “Keep the comments civil”? Do you mean like calling the people protesting the further intrusion of the federal government into their lives as “teabaggers”, a term used to refer to people who insert other’s scrotum and testicles into their mouths? Or do you mean making snide ad hominem remarks implying that those who oppose ObamaCare do so only because they have not yet had a bad experience with the current system?

    Furthermore, to assert that the Republicans have offered no plan or alternative is an exercise in willful ignorance. A simple Google search under “McCain Health Plan” yields 1.75 million results. The second such result is a 1080 word analysis from the National Center for Policy Analysis describing the plan McCain put forth during the last election cycle. Go read it.

    Further, I don’t know exactly how deep a hole one would have to bury one’s head in to be unaware of the controversy stirred up by Whole Foods CEO John Mackey when he proposed a similar type of plan in the pages of the Wall Street Journal. Go read that too.

    Taking an “aw shucks” attitude and saying that something is above your pay grade doesn’t exempt you from defending the positions you take. If you think the Canadian system is better than the American one, defend it, and not just with anecdotes. If you think that Obamacare is better that what the Republicans have proposed and have been proposing, then say so and defend your proposition. If you are no longer an economic libertarian but now believe in a planned economy then say so. But to do what you just did is obnoxious at best, and dishonest at worst.

    Allow me to demonstrate just how rude, obnoxious and yes, uncivil your post is by doing the exact same things you do but taking the opposite position:

    “Aw shucks, gee wizagiz, I wish I knew what to think about this big and complex ole bit of legislation they done passed in Washington. But for what it’s worth, here’s my two cents: it really is too bad that the Democrats just went along with exactly what Obama wanted for a health care plan and didn’t ever propose anything different, because what they passed sure seems similar to what they have in Canada. I could tell you the horror stories about what happened to my cousin Binky once when he had to go to the hospital in Canada, but instead I’ll just say that hopefully now the American people will finally wake up, and make all those sexually deviant hippie Democrats go the way of the Whigs and the dodo. I welcome comments, but please, keep them civil.”

    Do you now see why your comments were neither civil nor productive? Do you understand that a straightforward defense of Obamacare, even coupled with gloating and littered with expletives, is less obnoxious that what you’ve written here?

    You should change the name of your blog from “Emergent Chaos” to “Command and Control” because it seems to better reflect what you honestly believe.

    And really Adam, you should apologize.

  • PHB says:

    The teabaggers chose the name themselves.

    Given that the teabaggers have been threatening to kill people, have called people ‘faggot’ and ‘nigger’ in the Capitol building and at least one has attempted murder, I don’t think Adam has anything to apologize for in calling for civility. The tenor of protests from opponents has completely crossed the line and the GOP is continuing to try to amp up the anger and doing nothing to condemn the people advocating or threatening murder.

    Sarah Palin currently has a facebook page with Democrats who voted for the HCR bill marked with sniper targets.

    Last time we had this situation was in 1994 when hate radio whipped GOP supporters up into a lather and one of them, Timothy McVeigh then went and murdered 168 people. Now they are doing it all again.

    The attitude of the Republican party has essentially been to not take part in the organization of the protests, but to make sure that they do hamper any that may arise spontaneously. And yes, if you understand the reference, that is exactly what I mean.

    McCain and Romney have both repudiated the Health Care Reform proposals they ran on during the campaign. This was a particularly idiotic move for Romney since the Obama bill is modeled on the one he signed in Massachusetts. There is no way that Romney can run away from what he did, his only chance of survival was to attempt to become the Howard Dean of the GOP and challenge the party by sticking to his earlier principles when it was unpopular to do so.

    The Republican party has had plenty of opportunity to contribute to the bill. They could have cut a deal with Max Baucus. But the fact was that the centrist Democrats who really wanted to cut a deal could not find a single GOP Senator willing to negotiate in good faith.

    The right has to take a deep breath and remind themselves that this is why we have elections. Obama and the Democratic party won the last election on a campaign platform that promised Health Care Reform. They have a clear mandate for the two bills that they passed.

    I don’t expect that they will take my advice. On the contrary, they will continue the current behavior until someone gets killed. Then they will be trying to explain why nobody could have expected that their behavior would lead to that.

  • beri says:

    I bet that those people who vociferously oppose the health care bill HAVE health insurance and have never been without health insurance. One might feel differently about the bill if you had to go to a hospital and risk bankruptcy because of the costs of medical care. I know someone who literally went bankrupt and lost their house in such a situation. So try to think about others when you think about this bill and its value to people besides yourself.

  • Jason Calley says:

    Be warned. What follows is a brief rant, one triggered by observation of the usual left/right dichotomy .

    Well, honestly, how can anyone do a serious comment on politics and remain civil? This is not meant to be an oxymoron, but politics is not a civil subject. Here’s the truth: Republican politicians are father stabbers and mother rapers. On the other hand, Democrat politicians are father rapers and mother stabbers. That’s about the only substantive difference. Republican Presidents are murdering war criminals; ask the surviving relatives of innocent dead in Iraq and Afghanistan. Democrat Presidents are murdering war criminals: ask the surviving relatives of innocent war dead in Afghanistan and Iraq. They are not nice people; they are merely very good at appearing to be nice people.

    Here is a little more truth: the politicians who rule this country never do ANYTHING for the good of the country. War, peace, health care, markets, subsidies of any flavor — it doesn’t matter. No matter what they do it is done for political reasons, to gain power and money. NONE of it is done for YOUR good.

    It is important to understand that our politicians are neither a loving Mother nor a firm and disciplined Father. They are ranchers, and YOU are cattle. Until you realize this, you have no way of being free.

    Sorry to come off as a verbal slap-in-face rant, but face the facts. You’re a grown-up. You are the world’s expert on YOU. You ought to run your own life, make your own decisions. Don’t believe that government is better at arranging your affairs than you are. Don’t believe that any health care bill is a step forward for YOU. It isn’t. It is a step forward for the ranchers. Don’t believe that any war is fought to protect you. It isn’t; it is fought to benefit the ranchers. Nothing the Republican leaders do, nothing the Democrat leaders do, is for YOU. It is for themselves, the ranchers. If they were actually serious about helping you, they would let “the word’s expert on you”, (that would be YOU) make more of the big decisions on how to run your life.

  • Scott Bieser says:

    Libertarians failed to split from the Republicans? You mean, we should have sided with the Democrats? I don’t understand this remark.

    The Libertarian Party platform isn’t the be-all and end-all of libertarian thinking on the subject but its health-care plank is a good starting point:

    “We favor restoring and reviving a free market health care system. We recognize the freedom of individuals to determine the level of health insurance they want, the level of health care they want, the care providers they want, the medicines and treatments they will use and all other aspects of their medical care, including end-of-life decisions.”

    Like the Democrats, Republicans seem to assume that the skyrocketing cost of medical care is a given, written into the ineffable laws of the Universe, and the only debate is about how it should be paid for. Libertarians point out that the status quo is nothing like a “free market” system, it is one of the most extensively-regulated systems we have. And the effect of this web of federal and state regulations has been to vastly increase the cost of medical services while stifling development of low-cost alternative treatments.

    Would we even be having this debate if an office visit cost $35 rather than $100-150, or a cardiac-bypass surgery cost $20k instead of $100k?

    Health-care providers will of course mount a vigorous defense of their fees, and we’d all much prefer to demonize insurance companies than hospital companies, but those high fees are not established in a free market — they are the result of a market held captive by government diktats.

    Not to let insurance companies off the hook — a large portion of the cost of routine medical services is the enormous bureaucratic overhead providers must pay for in order to deal with insurance as well as Medicaid/Medicare billing. Here is a problem that Obamacare might have addressed, but completely failed to.

    Nonetheless even the fact that insurance companies loom so large in the health-care system is a result of government policies — from the World-War II era wage controls that resulted in health insurance becoming a routine employment benefit and thereby trained us to think of medical care as something someone else should pay for, to Medicaid/Medicare which introduced complex billing systems and the HMO laws which massively expanded that bureaucratic overhead.

    It’s not that Libertarians “failed to split from” Republicans. Our ideas were never on the table.

  • PHB says:


    Believe it or not, the Oxford Union has been holding debates on political issues in a civil fashion for almost two centuries.


    I think Adam was talking about the libertarians rather than the Libertarians. That is the people who consider themselves libertarian but vote for the Republican party rather than try to build up the Libertarian party into a viable alternative.

    The same thought puzzles me as well. The modern Republican party is a party of big government and diminished civil liberties.

    * A tax ‘cut’ without a cut in expenditure is no cut at all, it is merely deferring the tax to a later point in time. Cutting taxes to raise revenues only works if the tax cuts are sprinkled with magic fairy dust.

    * The attacks on gays and the attempts to force theology on the country to buy off the religious reich should make true libertarians bolt.

    Being a ‘libertarian’ Republican seems to be nothing more than a scam to let people who want lower taxes to vote for the Republican party while rejecting the warmongering, bigotry and racism that has become the core message of the party in recent years.

  • Peter Cohan says:

    Rob, I [… -editor] all the time. It’s awesome!!! I don’t know why you conisder Adam’s comments rude.

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