Call me a moral hazard meanie…

by on December 29, 2016 at 12:38 am in Economics, Law | Permalink

Pensioners who need help being helped back to their feet after a fall at home will be charged £26 by their local council.

Tendring District Council said it would introduce the fee as part of its Careline service for elderly people who require home care.

An elderly rights campaign group has described the charge as “shocking” and equivalent to a ‘falling fine’.

The £25.92 annual charge means a carer will come to pick an elderly resident up after a fall.

…”These people will have no other option but to pay because if they don’t, they’re going to be lying there on the floor aren’t they?” he added.

Here is the full story.  Do keep in mind that the number of phone calls will exceed the number of people who require public sector assistance.

1 Sam the Sham December 29, 2016 at 12:53 am

There are places in the US where if you haven’t paid into the fire insurance fund, firefighters will show up to put out the fire in your neighbor’s house and/or protect it, but leave yours to burn. I’m more or less ok with that – no one is *entitled* to your services (see the debate on positive vs negative rights). In the case of the firefighters, I’d prefer a middle solution where you can sign a contract to pay 5 years of back-insurance. A contract under duress, but… so what?

Wish me well on my trip to Britannia!

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2 kevin December 29, 2016 at 8:25 am

5 years sounds like a bargain. Why would anyone ever purchase annual insurance (surely theres less than a 20% chance your house burns down a year).

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3 (Not That) Bill O'Reilly December 29, 2016 at 10:29 am

Yes–in order to make the scheme actuarially sound, the cost of buying in after your house catches on fire would have to be equal to or greater than the actual cost of the firefighting operations; otherwise you gte moral hazard and a death spiral. But of course, once it turns into a PAYGO system, it’s no longer insurance (and also becomes financially unsound because the infrequency of house fires would deprive the fire department of the capital needed to maintain their equipment).

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4 Sam The Sham December 29, 2016 at 12:22 pm

Yeah, someone with more actuarial skill should calc it out, but I’d pay 5k$ easily to keep a 100k$ house from being 100% ruined. At some price point you may avoid moral hazard and provide spot benefit.

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5 My Bubble is Bigger December 29, 2016 at 12:59 am
6 carlospln December 29, 2016 at 1:39 am

Ho hum. The National Roads & Motorists Association in New South Wales will provide roadside assistance for an annual subscription [$199 pa]

If you DON’T subscribe, but call them in an emergency, there is a special ‘join and go’ surcharge of $139 on top of the annual subscription [both of which must be paid before any assistance is provided]. This surcharge was implemented in the ’90’s, and has been non-controversial.

I understand this surcharge is increasing, as per cent of total memberships [most call-outs are for keys locked in vehicles & dead batteries]

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7 dearieme December 29, 2016 at 5:09 am

When we lived in Queensland we discovered that many people seemed to treat paying for roadside rescue as preferable to having their cars serviced properly.

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8 Pshrnk December 29, 2016 at 9:12 am

26 quid a year is cheap. Trump and Tillerson should make it part of a foreign aid package to pay for it.

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9 BC December 29, 2016 at 3:14 am

1) If it is immoral to charge an elderly person for picking them up after a fall, then it must be even more immoral to charge the exact same elderly person even when they *haven’t* fallen. Of course, the only way to avoid the latter is to do the former because nothing is free.

2) If people would prefer to pay a fixed, predictable amount rather than a variable amount that depends on the number of falls, then it would be straightforward to sell insurance policies that cover these fees. Such policies could be sold by any insurance company and can be completely separate from the Careline Service. Thus, Careline is actually doing its customers a service by allowing them to choose whether they want to buy such insurance. Not charging per-fall fees is equivalent to forcing customers to buy such insurance. If no insurance company steps up to offer such fall-insurance policies, then either (1) there is insufficient customer demand, thus validating Careline’s decision, or (2) regulations somehow make such policies infeasible, in which case the problem is the all-too-common negative unintended consequences.

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10 bruce December 29, 2016 at 8:30 am

+1

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11 kevin December 29, 2016 at 8:33 am

I prefer not to argue about morality, but the elderly in this article don’t seem to mind paying a much smaller amount when they don’t fall, which is at odds with “then it must be even more immoral to charge the exact same elderly person even when they *haven’t* fallen”

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12 Brian Donohue December 29, 2016 at 9:50 am

Interesting exchange: BC lays out some classic amoral (not immoral) economic reasoning to which kevin objects, with a comment where the word “seems” is doing a lot of work.

The people in the article are basically saying that they already paid for this. If there is a shortfall, they are banking on OPM. That’s a different argument, an intergenerational argument.

If the insurance were explicit, say a one pound per month surcharge to cover against the risk of falling, well now we’re getting somewhere.

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13 Ilya December 29, 2016 at 4:40 am

According to the article, without the payment, there is still an option to call an ambulance.

Who pays in that case?

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14 dearieme December 29, 2016 at 5:10 am

The NHS i.e. the taxpayers.

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15 TMC December 29, 2016 at 9:16 am

So the NHS should be offering the service just to cut down on the more expensive ambulance trips.

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16 Dzhaughn December 29, 2016 at 1:08 pm

If there was in fact evidence that it is cost effective. The visit isn’t free, they may not reduce the number of ambulance trip, they may reduce cost but harm the patient (who really should go to the hospital).

Of course, some people will fall just to get a visit; but a 3 fall per year limit might make sense: any elderly adult who needs help getting up from falls that often needs a change of venue or lifestyle.

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17 Thiago Ribeiro December 29, 2016 at 5:41 am

If I pay for their being picked, can I go there taunt them before they are back on their feet?

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18 Thor December 29, 2016 at 10:34 am

Don’t bother. They probably wouldn’t be able to hear you.

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19 Thiago Ribeiro December 29, 2016 at 5:47 pm

Can I kick them while they are down instead?

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20 Heorogar December 29, 2016 at 7:40 am

Help! I’ve fallen and can’t reach the beer.

Seriously, among the blessings of socialist health care is killing off the elderly, er, rationing. “Over 130 000 [annually] elderly patients who die in British hospitals are killed off deliberately . . . “

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21 kevin December 29, 2016 at 8:35 am

Is that any different then here? Many people choose to forgo painful/expensive treatment that leaves them sick even though it would extend their life. I suppose that’s not “killing” them, but it is deliberate

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22 A.G.McDowell December 29, 2016 at 9:39 am

Searching for the quote, this seems to be a reference to the now outdated Liverpool Care Pathway (https://en.wikipedia.org/wiki/Liverpool_Care_Pathway_for_the_Dying_Patient). My Father died of cancer under NHS care – the doctor said at diagnosis “by the time it gets into the bones it’s everywhere” and this probably included the brain. Assuming that the only available treatment was to provide morphine in response to pain and wait for death – which I find plausible – I have no quarrel with their treatment. He wished to die at home, so they provided a hospital bed and scheduled nurse visits. The process took some weeks, with my Father unconscious most of the time. Comparing his initial dosages with those reported by pain sufferers on internet forums, I suspect that the disease, and not the painkillers, was responsible for the loss of consciousness. I dare say intensive care could have prolonged the process for some weeks more, but to what effect? My gut reaction at the time was that more deliberately lethal treatment would have saved everybody a good deal of time, money, and strain, but I don’t put that forward as a serious suggestion – I find the NHS response a sensible compromise to a number of conflicting requirements.

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23 Pshrnk December 29, 2016 at 10:32 am

http://www.nytimes.com/2013/11/20/your-money/how-doctors-die.html

It is what rational/knowledgeable folks choose.

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24 Pshrnk December 29, 2016 at 10:29 am

Source?

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25 Leo December 29, 2016 at 7:47 am

I’m not sure why it should matter, it doesn’t really make it less interesting or relevant, but this story is over a year old.

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26 Cassiodorus December 29, 2016 at 9:31 am

I’m going to make the bold guess that no one in this thread has a parent with mobility issues.

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27 Richard December 29, 2016 at 10:40 am

Another example of the strange contemporary tendency to use “issues” as a bland synonym for “problems.”

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28 Troll me December 29, 2016 at 8:36 pm

Some people find whiny people annoying. Also, it’s not very solutions oriented that way. And so they discuss “issues” or “challenges”, not “problems”.

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29 Hoonose December 29, 2016 at 10:07 am

Healthcare costs due to falls with the elderly, especially females after the age of 80, are huge. If the fee/fine encourages more seniors, families and caregivers to plan more appropriately for potential falls, that in itself might be a worthwhile endeavor.

https://www.cdc.gov/homeandrecreationalsafety/falls/fallcost.html

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