Saturday, August 22, 2009

Answering Requests, Part I

Paul Price asks,

"Please explain how our president can expect to provide health insurance for 47 million more people while SAVING taxpayers money.

Two possibilities come to mind:

1) The President actually doesn't think coverage can be extended to 47 million more people while reducing costs but he a) is more concerned about extending coverage than cutting costs; b) doesn't expect the big bills to come due for this until after he gets reelected.

2) The President believes that if a public insurance option is established, it will eventually achieve enough market share for the government to become the effective monopsony buyer of health care, at which point it could lower costs simply by lowering reimbursements to providers by fiat.

Anonymous asks,

"Please explain why fools always fall in love. Also, kindly explain why bad things happen to good, gritty people."

1) Because they are fools?

2) For two differing perspectives on this that have withstood the test of time, see Spinoza's Ethics and Leibniz's Theodicy. Their positions in a nutshell though:

Spinoza: Why not? Nature doesn't operate by the laws of human morality.

Leibniz: It could have been worse. We could have had another world where bad things also happened to good, gritty people but ice cream had never been invented. This is the best of all possible worlds.


Anonymous said...

Much more straightforward answer to the question about how Obama extends coverage but saves money: The uninsured population already consumes healthcare without paying for it. Extending them coverage may convince them to use cheaper, scheduled care, rather than expensive ER care. Auto insurance in many states have a loss-making 'public option' insurance company of last resort, whose annual losses are born by the private companies in the industry. This allows for nearly everyone to find auto insurance (which is probably good for society) and still allows for the private sector to innovate, cost-cut, etc.

DaveinHackensack said...

That sounds good in theory, Anon, but there have been some empirical studies on this, and the gist of them is that scheduled, preventative care increases costs for the population in the long run. On an individual basis, sure, it can save money if the scheduled care catches and fixes or ameliorates a problem before it becomes acute. But for every instance of this, you'll have numerous instances where the individuals were never going to get that acute, preventable problem anyway, and, in aggregate, you end up spending more overall on the population.

This isn't an argument against increasing scheduled, non-emergency care per se, just an explanation of why it won't lower costs.