Results for “markets in everything” 1878 found
Why is private health insurance such a disaster?
Why does private health insurance perform so badly in holding down costs? (Here is one story.) I can think of a few hypotheses:
1. Medical ideology portrays doctors as a priestly caste, accountable to no one.
2. The observed cost increases are driven primarily by government reimbursements and purchases.
3. The tax-free nature of employer-supplied insurance benefits encourages wantonness. (TC: Why? You can subsidize the purchase of apples, that doesn’t mean apples will be produced inefficiently or at “excess cost” for that level of apple output.)
4. The tax system discourages insurance policies with higher copayments. (TC: But if copayments are so great, companies today could offer higher-valued benefits along other dimensions, while increasing the copayment rate.)
5. Malpractice suits. This one is true for sure, but put it aside since the problem goes much further.
The most plausible answer is:
6. It is hard to contract in advance for which services should be covered. If you let everything be covered, costs skyrocket. If you allow for “outs,” insurance companies will use these loopholes to cut off high cost patients, thereby eliminating the benefits of insurance.
But why should this be such an insurmountable problem? Why can’t impartial third-party arbitrators arrive at a coverage solution that is reasonably efficient? After all arbitrators settle millions of legal disputes, issues where conflicts of interest could not be more pronounced. Or imagine third-parties that evaluates whether an insurance company covers reasonable expenses or instead screws over its customers?
Yes this does mean a cost-monitoring bureaucracy. But surely under all health care systems someone must decide which treatments are worthwhile or not. Why cannot markets allocate this function to the least cost decider? Why does the usual solution — intermediation — appear to be working so badly?
Inquiring minds wish to know. And simply citing the very large role for government in the American system does not do the trick. Here is one Cato account, you can agree with many of the points but it doesn’t answer my question. Here are some broader market-oriented links.
And this is why I find it so hard to come up with a good plan for health care reform. If we don’t understand why private health insurance functions so badly in our mixed system, we won’t understand how to fix things.
The cost of dieting
Why are Americans so obese? One factor is surely the decline in the relative price of carbohydrates. In hunter-gatherer society, you couldn’t get pasta or bread at all. But how about today?
“What’s really cheap are foods made with refined flour, added sugar and corn syrup and added fat.” People with limited income, he says, “buy foods that fill them up, and who’s to blame them? They get the most calories for their money.”
Not everyone is willing to pay for a good and tasty diet. Christine Davies speaks:
“I tried both the Atkins and South Beach diets, but pound for pound, protein is a lot more expensive than carbs,” she says. “The South Beach diet recommends fish about three times a week. I’d have to eat canned tuna three times a week to afford it, and I get tired of eating the same foods.
“Plus, you have to cook everything yourself,” she says. “Following it on a day-to-day schedule would be completely impossible because of the complexity of the recipes and the cost of the foods.”
She’ll get little argument from Phil Lempert, one of the nation’s leading experts on food prices and grocery-store shopping. Using exclusive data from AC Nielsen and menus from the best-selling diet books, Lempert calculates that strict adherence to the low-carb, meat lovers’ Atkins diet would cost about $100 a week (presuming you eat all meals at home). The salmon-rich South Beach diet priced out at almost $90 a week. That’s far more than the $35 that Davies spends at the grocery store each week to feed herself.
Many other people live in “food deserts,” where supermarkets with fresh vegetables are a long distance away. Of course all this holds only for North America. The world’s very poor find calories hard to come by, engage in hard physical labor, walk much more, or have better access to home farmed fresh foods. Only in the U.S. are carbohydrates so cheap.
Here is the full story. Here is a related article on the cost of dieting. Here is Bruce Bartlett’s excellent short piece on the economics of obesity, with links to the academic literature.
As for me, if you ignore price and delivery costs, I would gladly eat sashimi for at least half of my meals.
What’s wrong with perfection?
That’s the self-appointed topic of philosopher Michael Sandel. What if we could genetically engineer ourselves to be far “better” human beings? What would be wrong with that? Here is his answer, writ short:
A lively sense of the contingency of our gifts–a consciousness that none of us is wholly responsible for his or her success–saves a meritocratic society from sliding into the smug assumption that the rich are rich because they are more deserving than the poor. Without this, the successful would become even more likely than they are now to view themselves as self-made and self-sufficient, and hence wholly responsible for their success. Those at the bottom of society would be viewed not as disadvantaged, and thus worthy of a measure of compensation, but as simply unfit, and thus worthy of eugenic repair. The meritocracy, less chastened by chance, would become harder, less forgiving. As perfect genetic knowledge would end the simulacrum of solidarity in insurance markets, so perfect genetic control would erode the actual solidarity that arises when men and women reflect on the contingency of their talents and fortunes.
Here is the longer argument.
In other words, Sandel is saying that if we bring about a world where everything is the result of genes, people will be less caring. Social solidarity will diminish.
I doubt this. If you want to drum up sympathy, hold up a picture of a young child with birth defects.
And at what margin is contingency good for us? Would it also increase social solidarity to have our lives “contingent” upon diarrhea, malaria, and tuberculosis?
Going out on a limb:
The future of solidarity may be up for grabs, but for different reasons than Sandel recognizes. The real question is whether parents will prefer to genetically engineer children with more or less social solidarity. I’ll predict more. The benefits of sexual selection (attracting a quality mate) will outweigh the shorter-run benefits from greater selfishness. Don’t parents already scold their children to have a stronger social conscience? Wouldn’t caring kids also be more…obedient? Now you might try to breed a kid who loves only his spouse and children, and cares about no one else. How good a job will this person get? Remember, this future world may also allow us to test for what genes people have. What better for a job interview than to take a piece of hair and see how much the person is a cooperator? I expect genetic engineering to increase the gains from trade. As for politics, imagine if candidates had to reveal their genetic profiles.
Genetic engineering also will accelerate the pace of evolution. Given that birth control is cheap, the women on the future will love children more than do the women of today.