What are health care co-ops?

by  Tyler Cowen in

Here is one quasi-answer:

But so far, cooperatives have been defined in the health-care debate
primarily in terms of what they are not: They would not be run by the
government.

That may make the cooperatives more politically palatable to
conservatives, as well as to some Democrats such as Conrad, who fear
that the public option may be a bridge too far. But it also presents
new challenges: Cooperatives would face potentially greater difficulty
getting off the ground and obtaining discounted rates from doctors and
hospitals, observers say.

Whether this would end up as a public plan under a different name, I cannot say and indeed it seems that maybe no one knows.  Ezra Klein tries to clear up some issues. 

I am in any case puzzled by the topic.  If, say, rescission is a major problem, why do not health insurance customers seek out health insurance mutuals or co-ops, both of which offer the possibility of greater consumer control and thus less opportunism from the supplier. 

Note that mutual banks were quite common before the rise of deposit insurance and mutual life insurance companies played major roles in the history of the industry.  So mutual and co-op forms can arise when the market agency problem is severe.  Why don't health insurance mutuals or co-ops take over the sector today for that matter?  But hey, wait, Blue Cross and Blue Shield do in fact have long histories as co-ops.

So what went wrong?  If you read the Mark Pauly quotation on p.2 of the first link, it seemed that health care customers did not in fact end up controlling the co-op (or mutual).  The managers ran the show in their own interest.  Maybe so, but then will health insurance customers do so much better controlling or influencing a government-run plan?

There is thus an unusual implicit claim on the table.  It runs something like this: decisive customers, with exit rights, cannot control a health insurance co-op.  Those same individuals, in their roles as voters, being non-decisive, and with fewer exit rights, can control a government-run health insurance system, co-op or not.

I can think of some models in which that claim is true, but I would not want to go to the mat for them. 

Here is someone else asking why we don't buy health insurance from mutuals.  It's an underexplored question.

Addendum: Mark Thoma makes some excellent related points.

NPR Planet Money podcast on financial innovation and high-frequency trading

by  Tyler Cowen in

The participants were myself, Felix Salmon, and Mike Konczal (of the excellent Rortybomb) and the link is here.  I haven't heard the final editing but at the time I thought the questioners did a very good job.  They started off with the question of which financial innovations of the last twenty-five years — if any — have been of real value.

What if culture froze and had to be recycled?

by  Tyler Cowen in

Robert Wiblin, a loyal MR reader, asks:

Thought experiment for MR: what if the law said we couldn't make any new art (movies, novels, music etc). And perhaps said we ought to rerelease each year the art that first appeared 50 or 30 years ago. How would people's leisure activity and society's cultural evolution change?

I pose a similar question in my book Good and Plenty: The Creative Successes of American Arts Funding. After the adjustment process, I believe that matters would settle in an orderly fashion, although whether we pick the art from 30 or 50 years ago would make a big difference in terms of the required rejiggling of our aesthetic sensibilities.  We would pick out bestsellers from 30 or 50 years ago and some of them would be in demand, if only because people wish to share common cultural experiences.  Overall it is the more obscure books from that era that would likely rise to be the bestsellers today.

1979 is barely an aesthetic leap; could not The Clash be a hit today?  How about Madonna?  Is it so ridiculous to think that people still might go hear The Rolling Stones or Paul McCartney in concert?  How about buying a Stephen King book?  Here are the top songs from 1959 (yikes!), but recall that same year brought many excellent jazz albums.

The entire process would work better if the material from the past were temporarily unavailable prior to its rerelease.

It's an interesting idea to relive the release of the culture of the past but with today's sensibilities.  What we would like to think we would like is probably not what we would like at all.  And maybe some works we like only because they are in our past.

Finally, everyone is so ga-ga over arts subsidies, but it is remarkable how many models with microfoundations instead imply that we should tax the arts.

The view from your recession

by  Tyler Cowen in

Remember the durable goods monopolist?

While many of Southern California's luxury hotels are battling a severe
slump in business by offering extra services and more amenities, the Rancho Bernardo Inn is luring guests with the exact opposite — no frills and barely any basics.

Called the "Survivor Package," the hotel's deeply discounted promotion
lets patrons trim its standard $219-per-night rate on a sliding scale
of deprivation, lowering charges with each amenity stripped from the
room.

The most basic version: a room for $19 with no bed, toilet paper,
towels, air-conditioning or "honor bar," and only a single light bulb
in the bathroom for safety. The next level up adds in a bed — sans
sheets — for $39 a night. For a bed plus toiletries and toilet paper,
the rate is $59.

Here is more information and for the pointer I thank Deron Bauman.

The value of the Beatles

by  Tyler Cowen in

Don Boudreaux offers a simple calculation:

If each viewer of only The Beatles' first two "Sullivan" appearances
deposited $1 into an account in return for watching The Beatles on
these telecasts, this account would have had in it, on Feb. 16, 1964,
$143.7 million. If this money had been invested at the historical rate
of return earned by U.S. stocks, it would have earned an annual return,
on average, of 8 percent. Today, this account would be worth about $4.4
billion.

Divided equally among John, Paul, George and Ringo, Paul's share
today would be $1.1 billion — his approximate current net worth. And
this from only a small payment made 45 years ago by each viewer of a
mere two episodes of an American television show.

Adam Phillips on moderation and balance

by  Tyler Cowen in

Here is the closing bit of the essay:

There is, though, a third possibility, the one that I want to end on because it seems to me potentially the most interesting, though perhaps the most daunting. This is that the religious fanatic is someone for whom something about themselves and their lives is too much; and because not knowing what that is is so disturbing they need to locate it as soon as possible. Because the state of frustration cannot be borne – because it is literally unbearable, as long-term personal and political injustice always is – it requires an extreme solution.

In this account our excessive behaviour shows us how obscure we are to ourselves or how we obscure ourselves; how our frustrations, odd as this may seem, are excessively difficult to locate, to formulate. Wherever and whenever we are excessive in our lives it is the sign of an as yet unknown deprivation. Our excesses are the best clue we have to our own poverty, and our best way of concealing it from ourselves.

What I’ve been reading

by  Tyler Cowen in

1. Methland: The Death and Life of an American Small Town, by Nick Reding.  Maybe I should define a new category: "Good enough to finish."  This is one of the better recent books on the economics of culture.

2. The Great Contraction, Friedman and Schwartz.  Classic economics books like this are almost always worth a reread.  I had forgotten just how bad was the year 1931.

3. Chop Suey: A Cultural History of Chinese Food in the United States, by Andrew Coe.  There is way too much well-known diplomatic history in this book, but the best fifty pages are good enough to make it worthwhile.  That said, I could have saved a lot of time, by flipping rapidly through the boring pages. had I not been reading it on my Kindle.

4. A Schoolteacher in Old Alaska: The Story of Hannah Breece, collated and edited by Jane Jacobs.  A reasonably interesting look at Alaskan, Aleut, and Russian culture around the turn of the century, as told through the eyes of a settler woman and edited by Jacobs (with how much intervention I am not sure).  This makes for a good contrast with Jacob's work on urban economies.  It's not thrilling all the time but overall I would recommend it.

5. Middlemarch, by George Eliot.  No other book I have tried so profits by a reread on Kindle.  Given its density of information, it's simply much better when there is less on each page.

The path dependence of health care institutions

by  Tyler Cowen in

Let's say you favor one of the health care plans currently under consideration.  Should you believe it would have been easier to switch to your favored plan in, say, 1972 rather than today?  I suspect the answer is yes or maybe even "very yes."  And probably you are stressing the imperative for change now rather than ten years from now.  That strikes me as an internally consistent set of views.

Yet I worry.  The implication is that the reform in the U.S. won't work nearly as well as in Europe, which made the switch to a different system much earlier on.  How much less well would a U.S. switch work?  I haven't seen useful estimates of this. 

Are there any data for the null hypothesis that past some point countries — for better or worse — simply cannot or will not change the basics of their health care institutions?

Almost everyone thinks that the French health care system is better than the British health care system.  What is the chance that the British could be persuaded to switch?  (Although I cannot imagine the rhetoric: "under the French health care system, Jean-Dominique Bauby would have been put to death.")  What does this say about health care reform more generally?

One unintended byproduct of the current U.S. debate is that the British will dally in reforming their NHS.  It is now harder for them to admit they have a relatively bad system.

Paul Romer, ask and ye shall receive

by  Tyler Cowen in

For a man who likes the Kentucky Colonels, is that not how it ought to be?  Reality now brings Caribbean Charter Islands:

The UK has resumed day-to-day control of the Turks and Caicos
islands amid ongoing allegations of widespread corruption in the
British overseas territory, the Foreign Office said tonight.

Local
government in the islands, which lie 500 miles south-east of Florida in
the Atlantic, will be suspended for up to two years while their affairs
are put back in "good order", according to the FCO.

The Islanders themselves are divided over the idea.