Politics: Onward from New Hampshire

[Hank Chinaski]

Originally posted by ltl/fb
Did you even read her post? What Oregon was doing affected only people who did not have coverage through their (or their spouse's or parent's) employer -- i.e., people who currently qualify for Medicaid, and people who aren't quite poor enough to qualify for Medicaid but nevertheless do not have group insurance. While this is quite a large number of people, it is not the "vast majority" of the country.

I suppose that such a system could provide an incentive for employers to eliminate coverage for employees. However, that ought to result either in higher regular wages for the employees (or better other types of benefits) or lower prices for whatever the employer produces.

Sorry if this repeats what someone says; it bugged me too much to obey the "read THEN post" rule.

Fringe, I was trying to show SAM a problem with a government run system if it were extended to the whole country. I was not attacking the Oregon system, which, I'm sure is a very fine system indeed.

As to whether I do/do not read the entirety of posts, I'm afraid the question has been raised that it is somewhat irrelavent. I apparently often do not understand that which is written.

[ltl/fb]

Originally posted by Hank Chinaski
Fringe, I was trying to show SAM a problem with a government run system if it were extended to the whole country. I was not attacking the Oregon system, which, I'm sure is a very fine system indeed.

As to whether I do/do not read the entirety of posts, I'm afraid the question has been raised that it is somewhat irrelavent. I apparently often do not understand that which is written.

OK, but since SAM has said he isn't calling for a single-payor system, and RT and I have discussed what the Oregon proposal involved, what say you to that?

I do have to say I was expecting you just to ignore the whole thing since you were kinda sorta wrong in that you were using an example wrong, but you replied, and I kinda respect that. Kudos.

[bilmore]

Originally posted by ltl/fb
I suppose that such a system could provide an incentive for employers to eliminate coverage for employees. However, that ought to result either in higher regular wages for the employees (or better other types of benefits) or lower prices for whatever the employer produces.

Whether I pay for my employees' coverage, or I end that benefit and the state picks them up, the employees' compensation remains the same. I would certainly not pay them more unless I had to in order to attract workers. I might drop my prices to undercut my competitors who were still paying for coverage, and that would then pressure them to cut the coverage themselves, placing more people on the state program. Eventually, everyone who was paying for coverage for workers who could go on the state system would stop. We'd have slightly cheaper widgets, and a hugely expanded semi-Medicare. Widget buyers would be happy, but that seems to be a poorly targeted benefit, for no real gain except an expanded role of government, and higher taxes to pay for the program.

[Hank Chinaski]

Originally posted by ltl/fb
OK, but since SAM has said he isn't calling for a single-payor system, and RT and I have discussed what the Oregon proposal involved, what say you to that?
.

bacon tastes good!

[ltl/fb]

Originally posted by Hank Chinaski
bacon tastes good!

I knew there was a reason I was unable to bring myself to take the "kinda" qualifier out.

And can you switch to something like "celery tastes good!"? I'm getting fat from all the bacon. And thirsty.

[sgtclub]

Originally posted by Mmmm, Burger (C.J.)
Because my response was exactly that, so what. You have to demonstrate that hurting profitability is a bad thing for US society. It is possible, see Viscusi et al., to over protect. And it's my contention, admittedly without support, that we overspend on healthcare and therefore create incentives for overinvestment in health care R&D. So, if you lower the profits drug cos. make, just possibly you're reducing the amount of R&D to the socially optimal level.

I now understand your point. You are saying that R&D costs are too high because of the monopoly pricing, or in other words, that there is a lot of fluff in R&D because of the monopoly pricing. This raises a very important philosophical point that gets at the heart of the issue - who is to decide how much R&D/profit is too much? I am far more comfortable with each enterprise making that determination based on market incentives that the decision be regulated by the government.

[ltl/fb]

Originally posted by bilmore
Whether I pay for my employees' coverage, or I end that benefit and the state picks them up, the employees' compensation remains the same. I would certainly not pay them more unless I had to in order to attract workers. I might drop my prices to undercut my competitors who were still paying for coverage, and that would then pressure them to cut the coverage themselves, placing more people on the state program. Eventually, everyone who was paying for coverage for workers who could go on the state system would stop. We'd have slightly cheaper widgets, and a hugely expanded semi-Medicare. Widget buyers would be happy, but that seems to be a poorly targeted benefit, for no real gain except an expanded role of government, and higher taxes to pay for the program.

Whoa, is all that something to do with that "economics" thingy that was offered at the good college across the street from my jr. college?

You are assuming perfect markets, which simply don't exist. If the state coverage were not as good as the private coverage you had offered previously, and if employees actually knew what coverage was involved (unlikely), you would likely have to pay them more to make up for the coverage they were no longer getting. Or, you'd have to keep providing coverage. Of course, employees rarely make decisions about where to work based on the type of health coverage.

Your last sentence makes no sense. You are forgetting about the non-covered people who would have coverage. You aren't taking into account that those people go get emergency care after things get really bad, and that's more expensive than getting things taken care of up front, it doesn't get paid for by the people getting the care (because they can't afford it) so other health care prices are raised to cover those costs -- think of it kind of like shoplifting, which raises retail prices, but without the criminal stuff, the people who do get the emergency care but can't afford it frequently end up with fucked-up credit, the tracking of which raises prices and the costs of which make it harder for such people to drag themselves out of poverty.

So it's more than supplying "slightly cheaper widgets," though of course at the time I made the argument really the sole outcome I was looking for was cheaper widgets. All this other stuff is just the unintended consequences.

[Mmmm, Burger (C.J.)]

Originally posted by sgtclub
This raises a very important philosophical point that gets at the heart of the issue - who is to decide how much R&D/profit is too much? I am far more comfortable with each enterprise making that determination based on market incentives that the decision be regulated by the government.

I am too, but drug companies aren't facing true "market" incentives right now, so to say that changing the current regulation is pareto inferior is not a forgone conclusion.

I don't think it would be too unreasonable , if one has a national Rx drug plan, to offer a price that is equal to an exchange-rate adjusted average price in the 7 largest industrial countries other than the US.

[bilmore]

Originally posted by ltl/fb
If the state coverage were not as good as the private coverage you had offered previously, and if employees actually knew what coverage was involved (unlikely), you would likely have to pay them more to make up for the coverage they were no longer getting. Or, you'd have to keep providing coverage. Of course, employees rarely make decisions about where to work based on the type of health coverage.

No, they say "here, I make $400 per week, and I have health coverage. There, I make $400 per week, and I get state coverage". I think it evens out in their minds. If you want to put in stuff about "what if the state coverage isn't as good", well, if my aunt had balls . . .

Your last sentence makes no sense. You are forgetting about the non-covered people who would have coverage. You aren't taking into account that those people go get emergency care after things get really bad, and that's more expensive than getting things taken care of up front, it doesn't get paid for by the people getting the care (because they can't afford it) so other health care prices are raised to cover those costs -- think of it kind of like shoplifting, which raises retail prices, but without the criminal stuff, the people who do get the emergency care but can't afford it frequently end up with fucked-up credit, the tracking of which raises prices and the costs of which make it harder for such people to drag themselves out of poverty.

I understand all of that. There will be a benefit of coverage where there was none. I was simply pointing out (what I think was) Hank's point, that such a system is self-perpetuating and usually more expensive. I have not seen many systems where the government can do tasks that are being done by the private sector for as cheaply as the private sector does them.

So it's more than supplying "slightly cheaper widgets," though of course at the time I made the argument really the sole outcome I was looking for was cheaper widgets. All this other stuff is just the unintended consequences.

You say "unintended consequences" like they are rare, and surprising.

[ltl/fb]

Originally posted by Mmmm, Burger (C.J.)
I am too, but drug companies aren't facing true "market" incentives right now, so to say that changing the current regulation is pareto inferior is not a forgone conclusion.

I don't think it would be too unreasonable , if one has a national Rx drug plan, to offer a price that is equal to an exchange-rate adjusted average price in the 7 largest industrial countries other than the US.

Yeah, but if they go with the Medicare drug plan model, the gov't won't be able to bargain with the drug companies on prices.

So, club, do you think there's any connection between Billy Tauzin getting that provision into the Medicare bill and him becoming the head lobbyist for the pharmeceutical companies' trade group? I guess that's a market too . . . . would be interesting to know how much he's getting paid. Apparently the guy who currently has the MPAA (or something to do with the film industry) lobbyist job, which Tauzin turned down to go with the drug companies, makes in excess of $1 million per year. Peanuts compared with the CEO of oh say Tyco or Enron, but compares well with congressional salaries.

[Tyrone Slothrop]

Originally posted by Hank Chinaski
Why not regulate what the royalty is on lasik?

Because glasses and contact lenses are adequate substitutes.

Why not regulate what Lemuelson makes on bar code readers?

Why not always ask new questions instead of answering any of them?

how much should the gov't let GM charge for its new airbag systems?

You would have to have been in a coma for the last 30 years to think that GM has a monopoly.

What you're arguing then isn't really providing gov't ensured health care, you're arguing to pull the plug on patents for pharm. or at a minimum control how the patents are used. That will certainly kill incentive in a business that is already dealing with very tight margins.

I'm talking about regulating the industry to try to ensure that more people can afford more drugs.

Neither you nor sgtclub wants to explain this magical link between pharma profits and R&D, but my question for you is this: If R&D is such a wonderful thing, why not spend government money to encourage it?

[Hank Chinaski]

Originally posted by Tyrone_Slothrop
Because glasses and contact lenses are adequate substitutes.

and every drug has substitutes. There may be the hottest-newest, but there are certianly substitutes for them all.

Patents are seldom broad enough to prevent competition from providing a parallel Ty.

[ltl/fb]

Originally posted by bilmore
You say "unintended consequences" like they are rare, and surprising.

Yeah, bilmore, I'm totally unfamiliar with the concept of unintended consequences. Thank GOD you are around to educate me.

Hmmmm . . . one of the unintended consequences of the government having encouraged an employer-based system (through tax breaks etc.) is that a ton of people don't have any coverage. It's my understanding that the push for the employer-based system was part of the fight against the USSR/communism/labor unions, but I wasn't born at the time all that was formulated. Perhaps here you could provide some historical context?

So, yeah, I kinda get it that choices made by private and governmental actors pretty much always have unintended consequences.

[sgtclub]

Originally posted by Mmmm, Burger (C.J.)
I am too, but drug companies aren't facing true "market" incentives right now, so to say that changing the current regulation is pareto inferior is not a forgone conclusion.

I don't think it would be too unreasonable , if one has a national Rx drug plan, to offer a price that is equal to an exchange-rate adjusted average price in the 7 largest industrial countries other than the US.

You may be right for particular drugs made by particular companies, but to say drug companies in general are not facing true markets is ridiculous, and even for those drugs where they have a monopoly, you have not shown evidence of predatory pricing (I am not convinced that because they charge less in Canada they are engaged in predatory pricing in the States).

Setting aside my discomfort with regulating pricing in general, your exchange rate plan is interesting, but presumably would raise prices in the 7 other countries, which could have the effect of lower aggregate demand.

[sgtclub]

Originally posted by Tyrone_Slothrop
Neither you nor sgtclub wants to explain this magical link between pharma profits and R&D, but my question for you is this: If R&D is such a wonderful thing, why not spend government money to encourage it?

The link more precisely between revenues and R&D. In a simple example, more revenues + constant costs = more profits. Alternatively, more revenues + increased R&D costs = constant profits.

On your second point, we do spend government money on R&D in a wide variety of ways (e.g., public universities).