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On Health Care

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The Nobel Prize discussion quite reasonably morphed into a health care discussion.  So, if anyone wants to continue that, here’s a place to do so.  My position is as follows:

For purposes of this discussion, “profit” refers to money that comes from appropriating the labor of others (“exploitation” in the strict economic sense).  If a company bills a nurse practioner at $75/hour, and pays the nurse $20/hour, the $20/hour is wages; the portion that goes to the company out of the remaining $55 is profit.  Money earned by a doctor is not profit, money earned by an insurance company is.

That said, I do not believe it is possible to solve the health care problem, or even significantly improve it, while profit is still a consideration.

corwin

Author: corwin

Site administrative account, so probably Corwin, Felix or DD-B.

0 Comments

  1. There will always be some people making profit in any endeavor.

    But it is easy to see how the Health Care bill is about 50 times larger than the original core. Just follow the money.

    Follow the money to see who our Congress Critters work for.

  2. “I do not believe it is possible to solve the health care problem, or even significantly improve it, while profit is still a consideration.”

    I’ve heard the argument that what we’re trying to do here is just get something through to get people used to the idea that everyone deserves access to health-care, and then we can go back and push ahead with that idea later on after it’s been entrenched.

    That sounds a little wishy-washy to me, but it might be pragmatic.

  3. As a Brit, we have our own problems with healthcare. But I did get a better understanding of the current debate in America from this:

    http://www.slideshare.net/danroam/healthcare-napkins-all

  4. I would say the $55 is part profit and mostly waste.

    $75 = $20 for the nurse, $20 for the paper-pusher who wouldn’t be needed without the insurance system, $10 for the accountants to sort out where the money needs to go, $10 to provide the same insurance benefits to paper-pusher and accountant, $15 profit. Any system that’s on the table will have the waste that comes from not paying the supplier of services directly, and I have much more problem with that than with the profit.

    Single payer with total coverage – even through a for-profit system – would at least reduce the paper-pusher bit to closer to $5 and eliminate or reduce to $5 the accountant bit.

    Frankly, free-market capitalism should have already taken it to that place if it were what its cheerleaders say of it – they could be offering a better product, at lower cost, with higher profits that way. ($20 nurse + $10 support structure + $5 benefits + $25 profits = $60 instead of $75.)

  5. A point in your first description. You did not account for wage costs. Wages are about 2/3 of what companies pay per employee, sometimes less. There is corp taxes, unemployment premiums/taxes, health care, retirement benefits, and so on.

    And some may bring up overhead of the employee using company capital. ie electricity, A/C heat, water/sewer, and so on. I know this is a discussion on health care reform, but think about who has the employee, not just the employee.

    Another example is professional laborers. Like a carpenter or mason. Because they work 2 to 3 seasons a year and may or may not have a 40hr week, they charge 3x the basic labor rate to cover overhead. ie personal insurance, savings for off times, capitol costs(tools, truck…)

    So don’t assume labor is just the wage earned.

  6. @5: Wow, that’s a stretch–assessing the employees for the infrastructure cost of the enterprise? I don’t think so. Benefits are negotiated in the ‘free market’–if someplace else has better benefits they’ll get the best employees so it is incumbent on employers to at least have benefits that are close to their competitors’. Assessing the costs associated with market forces to the laborers? Again, I don’t think so.

  7. Steve, it’s good to be agreeing with you again. Profit creates a death spiral wherever it exists. In health care, that death spiral is literal: last I heard, it’s 45,000 deaths a year in the USA. (Apologies if that was in the previous post. Haven’t read the comments there yet.)

  8. Bawrence, I’m confused at what point you’re trying to make. All of what you said apply to wages just as well – should they not be assessed to employees? You refer to “the infrastructure cost of the enterprise”, and say “benefits are negotiated in the free market” – what does this have to do with the plain and simple fact that it costs money to run the company? When a company assesses the true cost of a laborer, it *does* include the “loaded wage” – which can in some situations be higher than the “real” wage. Just because you don’t get cash in your pocket doesn’t mean the company isn’t spending it on you. I’m rather confused at categorizing costs as profit! It’s reasonable to ask whether the company is wasting money or spending it on things like executive perks (or whether the nurse should have more input on the purchase of a fancy new hospital building, etc) but I can’t even half follow what you’re trying to do here.

  9. What we pay for health care is too expensive as it is. So many people go only when they have to. Without having insurance, or government health care, a catastrophe results in bankruptcy; and you may or may not be able to continue your treatment through to recovery. Then of course, you won’t get insurance coverage again after that. Or credit.
    They say the cost of health care is high because of “frivolous lawsuits” and malpractice insurance. Hm, someone gets messed up by a doctor or hospital, I think the provider needs to be taken to court and must pay up if found guilty. How’s that frivolous? We have the right to go to court for justice. I get furious when someone tries to limit or take that right away. Without it we have no protection.
    So if we need health insurance to cover our expenses, the insurance has to be affordable. Well hell, Cobra just for me costs $1k/month. I have no pre-existing conditions. How is that affordable? How has the free market made that affordable? Time for a government program that isn’t trying to profit from us. And time for affordable health care.
    Food for thought: The insurance companies provide the malpractice insurance. The insurance companies provide the health insurance. The premiums for both are skyrocketing out of control, and they escalate each other. Who’s in control of those premiums? Who’s benefiting from the situation? Well, my guess would be those very same for-profit insurance companies, or they wouldn’t be making record profits. Right? AND they get to make campaign contributions to the folks that set the laws those companies operate under? What’s wrong with this picture?

  10. @8: Those costs you mention would accrue for any business, whether it’s a multinational corporation or a SOHO. A business owner who assesses them against the labor which is actually producing the goods and/or services he or she is selling probably should’ve set lower goals.

  11. @9 Bingo.

  12. Bawrence, a nurse practitioner works in an office. Rental on the office is, say, $15,000/year. The employee is paid $30,000/year plus benefits worth $5,000/year. Customers pay the company $60,000/year for the nurse practitioner’s services in that office.

    I’m not saying the employee should be assessed the cost of the office; rather, the customer pays it. I’m saying it shouldn’t be considered the company’s profit, because it isn’t.

  13. Then that office is doing very well, as there are usually several other employees in an office with a nurse practitioner, and his or her efforts are paying the freight for the enterprise singlehandedly, according to your example.

  14. The US health care system is fundamentally broken.

    I didn’t really realise it till I started to live in a country where health care is provided at a much more simplistic and easy to use way.

    If I’m sick, I go see a Dr and show them a card. I do not sign anything. I do not pay anything. I then go down and pay for my medicines, and I get a portion of that returned if I take the receipt into the health care office.

    My wife and I make over a certain amount, I pay a 1% extra income tax at the end of the year (I can forgo that by getting private health insurance).

    It’s really a win/win. If you’re poor you can get good healthcare. If you have money you can either get private health care or continue with the public option and pay an extra 1% tax.

    The US needs to get profit out of medicine, news, and politics. Then it can start working on fixing all the fucked up systems that the almighty dollar has corrupted.

  15. From a non-USian perspective, this whole debate is nuts. Again and again, I am astonished at posts like “Writer/Artist/Person got sick/hurt/old and can’t pay the bills: please donate”.

    WTF?

    Isn’t basic health care a fundamental human right? We’re not talking gold plated pace makers or diamond studded fillings, but the equivalent of a municipal soup kitchen.

    It’s like reading the “5 major bridges collapse: people of Manhattan cut holiday shopping to rebuild”. (Subheader would probably read “Bankers, politicians rely on helicopter shuttle”…)

    No European I know worries about health problems eating his savings. His income might suffer during the illness, so he would have to fall back on savings, friends or aid programs — but he would never need to beg for, say, his pace maker.

    We Europeans all grumble about the 10% to 20% (depending on country, insurance level, age, income, moon phase, gold purity and diamond prices) that get subtracted from our pay checks, but every person I know is insured. Health insurance is mandatory. Period. Basic stuff, health care.

  16. GWW and Christian: Yes and yes.

  17. Christian,

    “Isn’t basic health care a fundamental human right?”

    What does this mean? What is a “right.” I ask this because it’s easy to say and sounds great if you don’t understand what it means. Please define what you mean by a human right?

    Ethan

  18. How come only ‘conservatives’ in the US don’t see it as a right? Every industrialized democracy on earth except the US has no difficulty with the concept.

  19. I’m not a conservative, or a liberal for that matter, I’m far “worse!” I don’t care what everyone else thinks the concept of a right is. If it’s so basic a concept then they should have no problem explicitly defining it. I find that most people accept that something is so, without understanding it. Much evil is done in the world through this.

    I know what I mean by a “right.” I wonder if everyone who talks about helath care being a mandatory human right really understands what that means. The first rule of understanding one anothers positions and argments is to define our terms.

    So, my question stands.

  20. Health care is evil?

  21. No, that is not what I said. I said evil is allowed to happen when people don’t really understand what they are saying and what they are voting for.

    Healthcare is great.

    Would you like to define what you mean by rights?

  22. Let me also be clear, in my opinion the U.S. healthcare system is a broken mess.

  23. No, I do not care to participate in semantic games. Rather than attack my position with such a vague premise, why not defend your own?

  24. I find that those who care not to define their terms are the ones playing the game, or who don’t know what they are really saying.

    I’m not attacking your position. I’m asking you to define your position by making it clear what you are saying.

    Never-the-less:

    If people have a “right” to healthcare, what does that mean. That means, no matter who they are, what they’ve done, or how they came to need it, or whether they can pay for it, by their very existance somone has a duty to take care of them. How does that come about? In other words, to put the question literally, Why do they have a demand of service on another human being?

  25. “If people have a “right” to healthcare, what does that mean. That means, no matter who they are, what they’ve done, or how they came to need it, or whether they can pay for it, by their very existance somone has a duty to take care of them. ”

    I would say that is true, yes.

    “How does that come about? In other words, to put the question literally, Why do they have a demand of service on another human being?”

    Because it is in all of our interest that people be healthier. This tends to make individuals more productive and less likely to spread diseases to others.

    It is, in my view, a fallacy to think of healthcare as a service offered to an individual; it is more useful, and more correct, to see it as something, like education, that is a general good for society as a whole.

    If you are all about the rights of the individual (I don’t know that you are, just supposing), then I’ll wave a red flag in front of you: If an individual carries an easily transmittable, communicable, dangerous disease (let us say pneumonic plague), I do not believe he ought to have the right to refuse treatment.

  26. Hi Steve,

    If he has a disease he doesn’t have a right to move about. He can refuse treatment but not refuse to be contained. Why and how can I say that? His contageousness effects those around him by his mere presence. It is a physical assault on others. In that way it’s not the sme as individual healthcare, that just affects the person.

    Not to make a slippery-slope argument, but it’s just these arguements that the governemnt makes. They take on a job and then realize that they have to exert further and further control in order to make it work. It’s beacuse they are trying to mandate and end to cause and effect. Even now, your’re life is not your own. More and more control is and will be loaded upon you because what you do affects everyones’ costs. If you don’t take care of your health, you cost others money, but you still have a right to healthcare, even if you can’t pay for it, and even if you live in a way that makes you unhealthy.

  27. @24: You put your position out and refuse to defend it, while requiring definitions from anyone with a different view. Are you someone we are required to take direction from? If that is your stance your bona fides are required.

  28. To be clear, I’m using your example of a serious plague like you mentioned.

  29. Bawrence,

    I am defending my position. If you just want to argue about arguing, I’m not interested. If you’d like to discuss the substance and meaning of what I’m talking about, by all means. Your comments are mostly just near personal attacks. They serve no purpose and resolve nothing.

    Debates like this are important. Most people pick a side based on something that sounds good to them. Most don’t dig in and see what it means. Then they join in the hurling of insults and yelling of meaninless slogans. I want to understand what things really mean and work to refine my view as well as understanding toerhs views. If I want minless yelling, I’ll listen to politicians. They love it and love those who do it for them.

  30. @Ethan: I hope you’re through with arguing about not arguing about arguing. I’m taking it on faith based on your attempt to return to the post topic. Using your example, wouldn’t it be more prudent to prevent whatever disease than to attempt to confine those who contract it? If everyone gets preventative care then it’s less likely you’ll have to hunt for Typhoid Marys.

  31. Ohhhhh-kay

    Preventing disease is great. Having universal healthcare, however, isn’t a silver bullet solution to this.

    People with healthcare don’t necessarily go to the doctor when they get sick. In fact, most don’t.

    My point here is that one doesn’t solve the other.

  32. They don’t go because it is prohibitively expensive even with health insurance in many cases. Remove that barrier and we’ll be getting somewhere. If it decreases the number of people we have to detect and segregate in the case of an outbreak isn’t this preferable to what we have?

  33. Actually they don’t go because they can’t be bothered to interupt their lives. Even if an office visit costs $25 they still don’t go unless and unti they are sriously ill in most cases.

    As for the “isn’t it preferable?” I say no. The end, which I don’t think this would acheive in any case, doesn’t justify the means.

    If the government gets involved in health care, pretty soon we’ll be seeing them outlawing everything that may make you less healthy, curbing your freedom, based on it being for the good of all.

  34. Do you have anything other than dubious anecdotal evidence to offer in support of your sweeping generalization?

  35. “If the government gets involved in health care, pretty soon we’ll be seeing them outlawing everything that may make you less healthy, curbing your freedom, based on it being for the good of all.”

    Yeah, because that’s what happened with Medicare over the years… oh wait, that isn’t what happened. Your tinfoil hat seems to be in need of repair.

  36. If you’re refering to people going to the doctor, I have the evidence of working with lots of lots of people who have health care and don’t go for the reasons I gave. How about your claim that cost is what’s stopping them?

    If you want evidence of government getting involved in taking things away for your own good: Restaurants and bakeries using transfats. It’s been outlawed in many places becasue it’s unhealthy and it’s raising costs for everyone. How’s that? Care for another?

  37. You are very rude. Insults are not an arguement. Tin foil hat? *shaking head*

    How about reason instead of rage?

  38. Do you have affidavits or is your claim a sweeping generalization backed by mere anectodal evidence? Any evidence of private citizens barred from using transfats in their own homes? Swing and a miss.

  39. If you’ll stop cherrypicking you’ll see the reason.

  40. Not yet…

    There is evidence of government controlling things and preventing you from using them in your own home. Marijuana for instance.

  41. Bawrence: Please improve your tone. Try not to be needlessly insulting. I especially object because we’re in agreement on the issue.

  42. Nice punt, except for the 14 states that permit the use of medical marijuana whose patients no longer face federal prosecution.

  43. @SKZB: The tone was created by his presumption that we had to jump through his hoops to continue the discussion. He got what he gave, I’m just better at it.

  44. 14 out of????

    What about other drugs?

    Who owns your life?

  45. Bawrence,

    My intial question about rights was not a hopp jump, it was a case of wanting to define terms. I explained that. I view the idea of a “human right to healthcare” as a “Positive right” that is, a “right” that requires someone else to fulfil it and as opposed to a negative right that requires only being left alone.

    Please don’t paint me with the “he wa rude first” thing. you took offense where I plainly didn’t mean nay. I said as much. In such cases I find it best to say sorry for the misunderstanding casued by the print medium and my mis-perception. I don’t expect that from you though. And yes, I have appologized for being rude on the net before. I’m better that 🙂

  46. I’d be more inclined to believe your protestation of innocence if you weren’t still doing it.

  47. Well,

    I can see you’d rather continue so I’ll say good-bye.

    People tend to see and hear what they expect to, and in this case you jumped to the conclusion that I was being insulting, despite when I explained that I was genuinely interested in discussing the issue and what rights are.

    I’m sure you’ll find plenty of “tin-foil” hat wearing people who’ll be happy to trade insults with you.

    In this day and age where everyone wants to hurl sound bites at one another rather than think and consider, it’s hard to find some really ready to talk. People like that only really enjoy hearing from people who agree with them.

    That is the shape of our world today.

  48. If that fairy tale helps you sleep better then congratulations.

  49. Bawrence #13: I’m thinking of several offices with just a nurse practitioner. There’s one in my office building, and one in a downtown Target store (and probably lots more I haven’t seen).

    If healthcare is a basic human right, who provides it? Are doctors enslaved? If a doctor wants to work no more than, say, 50 hours a week, is he allowed to if that means that the demand for medical services cannot be met by the supply?

    skzb@25: _Who_ has the duty to treat someone?

    An individual with a communicable disease has the right to refuse treatment. He does not have the right to infect other people; if there’s a way he can avoid infecting other people without being treated, where’s the problem?

    Ethan, government requiring that all use of trans fats be labeled is useful and fair (and accomplishes the desired result of a tremendous decrease in their use). Prohibiting them is not so good. What about naturally occurring trans fats? Those produced (in small quantities) as a side effect of cooking?

    Bawrence, yes, 14 states permit medical marijuana this month, and the federal government lets them, this administration. But neither of those is guaranteed to last, and that permission is only for people the states in question choose to provide it to.

    I know of a number of people who suffer severe pain that could be ameliorated, but their doctors are too afraid of the government to prescribe anything effective.

  50. Seth,

    Just to be clear, I don’t support governemnt involvement in regulating transfats at all.

    Requiring that it be included on ingredients is a good idea. But i don’t thiink it’s a role for government.

    I believe a private regulation/approval group (something like a TQM group like ISO or safety group like UL) would do a better job than the government. Consumers could support this regulation by supporting companies that opt to use it. Government regulation doesn’t work.

    I DO think it’s a good idea for people to take ownership of their lives. We have become too accustomed to the expectation that the governemnt or somebody else is going to save us even when we insist on making bad choices. I will gladly (and do!) support people who have been caught by bad luck.

    Those who wilfully act to harm themselves and not support themselves with the expectation that someone else will have no support from me by choice.

    When I go shopping I see the food-stamps used for a few staples and the the rest of the cash used for beer and cigarettes while those people complain about not being able to do aything fun with their kids, like going and picking apples for $8, or going to the zoo. Nope, when is the next school trip? When is the next school eye exam, when is the next perk benefit for the needy. But don’t take my beer, cigarettes, cable TV. NO WAY, those are my needs. Yuck.

    This doesn’t mean everyone out there on food stamps or goernment assistance is bad, but around me, it’s the majority.

  51. “skzb@25: _Who_ has the duty to treat someone?”

    Anyone with a medical license. I’m not talking ideals, I’m talking about the law as it currently exists. Doctors are legally obligated to treat patients in need of care. Of course, that is a drastic over-simplification, and there are many, many exceptions; but that is my understanding of the basis of the law as it exists. I’m open to correction if I’ve misunderstood something.

  52. @49: Shouldn’t the market provide more doctors if there is a need?

  53. @Bawrence: the government medical cost argument was used in the great tobacco lawsuit. Tinfoil hats preserve memory, it would seem.

    The math in the main post is stunningly bad. Try paying $20/hour for a nurse at a non profit hospital (they’re common!); you can’t. Medical facility costs are much higher dollar per square foot than residences. Cleaning bills are higher too. You want your hospital/doctor’s offices CLEAN.

    You can argue that the actual doctors are receiving profits, given what they make. But when computing profit we still need to compute costs for becoming a doctor: study hours, college bills, beer bashes foregone, time costs of waiting for that first paycheck, etc. There is still profit — exploitation of inborn ability to be a doctor — but gross is not net.

    Drugs are expensive because scientists aren’t cheap. And yes, scientists are profiting on their big brains, but they forgo many opportunities while developing those brains for socially useful skills.

    If you want to minimize exploitation of the labor of others, read up on Henry George. Ground rent collection is true exploitation.

    Corporate profits are a mix of true profit, compensation for risk, and time value. The passive pure profit component is subsidized by our government. See my site for details.

  54. I’m a fan of Henry George. Much less chance of tax evasion when the asset that is taxed can’t be hidden.

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