If $4000 for six IV’s and a few stupid tests and a three month wait to see an OBGYN is not “broken”, then I do not know what is.
As others have already said or referred to, ~50% of our healthcare is paid for by the government, the other 50% is so heavily regulated/mandated by the government that we do not have a free market in healthcare. I mean, you cannot even compare prices! Not only that, but the government limits the number of doctors and as someone else already stated, lawsuits can cost quite a bit as well.
If insurance is a terrible way to pay for health care, why would it work differently when paying for protection, like Rothbard and Hoppe visions it would? Strikes me as odd, that the reason that health care costs are high is simply because they are paid for by insurance. Also, it does not resonate very well with the Rothbardian idea of protection in a free society. I could definately never make that argument, and then in the next sentence blame insurance companies for raising the health care costs. I’d get eaten alive 
So, do you mean it is insurance, per se, that raises the costs, or do you mean that its because of the heavy regulations of the inusrance industry? If you mean the former, please elaborate.
Socialization of risk, whether public or private, always provides the incentive to maximize recovery. If you have to pay for your car repair out of your own pocket, you haggle for the best possible price. If it’s covered by insurance, you’ll spare no expense, and try to toss in every thing else you can into the bill as well.
Hoppe and Rothbard, like most anarchists, have never worked in the insurance industry so they don’t really have a handle on insurance. What they may be getting at is a no-fault scheme: everybody would be insured and if there was a negligent injury, the insurer would pay the injured party and pursue subrogation against the tortfeasor’s insurer. The two parties just go on about their business w/o even bothering w/ a lawsuit.
The idea of insurers funding PDA’s is completely off base though. Insurers compete for good risks, they don’t rehabilitate bad risks. Furthermore, it’s no longer insurance if you agree not only to underwrite the risk of loss but also to manage that risk yourself. That’s why if you buy insurance for your business you don’t see your insurer offering to come in and run the place for you. Some insurers used to have risk management departments, but all that did was provide plaintiffs with another defendant to sue in addition to the at-fault party so insurers got out of the risk management business.
A more likely scenario is large landowners (including corporate entities) will offer a complete “city-state” for people to move into. You will have either a leasehold or a fee simple (the landowner will hold allodial title) and the city-state’s owners provide utilities, security, living space, leases to businesses, etc. Of course, the city-state would want to maximize its property value, so credit risks, pathological individuals, and troublemakers become persona non grata and are evicted.
I hope nobody minds since I am lazy but I posted this on an older thread from some of the details for the modern US healthcare mess. Here it is:
Well, First off States have unconstitutionally placed barriers to the sale of health insurance across state lines, yet congress and the supreme court have done nothing to lower these barriers since the passing of a 1945 law explicitly allowing states to control their insurance markets. Then the state governments create on average up to 1,200 or more mandates on local insurance companies, forcing them to offer particular services to their customers regardless of if the customer wants them or not. So we cannot shop outside of our states for health insurance like we can with mortgages and loans and nearly every other product. On top of this the insurance premium we pay is hiked up by politically well connected interest groups wanting a guaranteed consumer market by forcing health insurance to cover things such as chiropractors, viagra etc (and a myraid of things that other Nationalized health services don’t even cover but our private health insurance must cover by law). So essentially our private insurance has to a cover detailed list of things in everyone’s health plans and on top of it things such as managed care and HMO’s are government mandated health insurance cartels to regulate the insurance industry which only aids the poltically connected health insurance companies on the inside and raises barriers to entry for competition. For instance Blue Cross Blue Shield is the name of my health insurance and they refuse to allow ANY sort of deregulation in the market, even getting rid of mandates, since they know it would introduce competition. Also they oppose any full blown government Health insurance such as the United Kingdom’s NHS. Lets not forget that mutual aid societies/ friendly societies use to provide doctors for their members that would visit patients at home but this practice was outlawed by the American Medical Association by creating strict licensing regulations through state governments and hence eventually creating a government/private doctors cartel that controls the licensing of medical schools and doctors themselves. And for the record this is just a very brief summary of the state of United States health care. The mandates alone create all sorts of markets problems. I suggest you read the link I will provide, that talks about what Health insurance Vs. a hypothetical Hunger Insurance would teach us about American Health care. Here is the link below.
http://www.fee.org/publications/the-freeman/article.asp?aid=2114
Hoppe addresses the nature of insurance in Democracy - the God that failed. He provides arguments to the effect that the type of insurance involved is not one in which there is a socialization of risk. It’s been a while since I’ve read it so I can’t recall the specifics though. That is where I’d recommend going to further pursue the topic.
I ordered it from the Mises store on Sunday. I’ll recieve it tomorrow if the fates don’t despise me.
Definately interesting. But how do you propose health care is paid for? By the individuals at the time they want to use it, like most other goods on the market? If If I want a bypass surgery, should I pay for it in full when I need it? Would you argue that this would be a better way?
Isn’t part of the reason insurance is good, that the future is uncertain? Having an insurance can be a good way to minimize risks. The money I pay for insurance is not just to pay for health care in case I need it, but also to pay for the good “mimizing risks”.
Yeah, I’ve read it too, but can not recall the specifics of the argument, other than that he proposed that insurance companies should, or at least probably would, be responsible for protection. I’ll have to go look in the book and find the argument then.
Presently, the only use that insurance has in health care is distributing a large payment over time, including the possiblity of being compensated immediatey.
In a private defense context, defense insurance is actually a part of health insurance, because your health is benefitted by keeping you safe.
The insurance industry is prevented from functioning properly as is.
The costs can indeed be outrageous. I completely agree with that part of the statement. However, if you show up with enough cash, you can get attention immediately. This is one function where US health care acts like a free market.
But I think that it is important to distinguish between the medical quality of care that is available (which I would argue is among the, if not the, best in the world), and the insurance/payment/costs/regulations that surround the care. Focusing on the latter, other threads have described typical health insurance as a “buffet dinner” - why would a consumer be satisfied with minimal consumption (the minimum use of health services) when they have already paid for “all they can eat” (as much and as expensive health care usage as they can get). I can state that my own experience has been that my friends and colleagues did not opt for the “minimum”, but that few are overtly abusive. However, very few do any shopping to get a good deal, or actually know what the care will cost prior to receiving it. I work for a large American corporation in the midwest that is self-insured, perhaps in an industry/area/population that is more fiscally conservative than others.
The AMA (American Medical Association) functions as a cartel that, with the backing of government, limits access to people who would provide medical care. The public reason for this is to protect consumers from hucksters that will advertise care they can not safely provide. But the cartel certainly limits competition directly.
Legal practice surrounding health care has become crazy. In my home state, laws were passed to allow unlimited* liability to the doctor for providing health care. The obvious result is that the doctor must pay more for malpractice insurance to cover the liability. Doctors in the state are “fleeing” the regulation because of the onerous costs - our OB/GYN paid $650000 in 2006 for malpractice insurance. She is a great woman who loves to help families bring children into the world, but even she has considered the financial risks of her business. The people really benefiting are the malpractice lawyers - they get to line their pockets with 50+% of the damages from malpractice cases. Of course, most of the people who make and interpret the laws are lawyers, so this may be another instance of a cartel (the Bar) taking care of their own with self benefiting legislation.
One of the major complaints is that the insurance company or HMO does not provide the care it stated it would. There are two parties in these cases, whom are both at fault part of the time. The HMO/insurance companies sometimes (or frequently, depending on the company) do not provide the coverage that their contracts say they should. If they deny service in violation of the contract, then they should be guilty of fraud. This guilt (proved in a civil court) should be used to sanction the offenders. However, the insured party often does not understand what care they are entitled to based on their contract. When they are denied uncovered care they need, or think they need, they complain about the insurer defrauding them (even though based on the contract the denial of coverage is legitimate).
Add on top of all this that health care and the grave consequences thereof (quality of life and death) are incredibly emotional issues, and a recipe for pandering and emotional appeals against reason is generated. No one asks “Is it ok to rob someone to pay for my surgery?”, because most would answer NO. However, if you ask instead “Is it right for my grandma to die because she can’t pay for her surgery?”, the answer given is also almost always NO. The latter question is the emotional appeal that is used to override and suppress the first question, thus forcing other people to pay for grandma’s surgery.
*I did not actually research the specific wording of the law - but this is the spirit. There are a number of midwestern states that have similar laws - many of them have private action groups that advertise to overturn the laws, since the lawsuits are driving various specialty doctors out of those states to the point where that type of care is no longer available.
Health insurance should really only be used for major things such as surgery or cancer treatment or something like that. Using insurance for just visiting your family doctor is crazy. I pay $40 to see my doctor and that’s not bad. It would probably be less if he didn’t need to pay crazy rates on insurance for himself. And in reality I could go to a nurse practitioner instead of a medical doctor. Instead of paying $40 I’d probably pay somewhere around $25. I figure if more people did that then the cost of health insurance would go down as insurers aren’t paying billions and billions of dollars every year just for someone to go have a routine check up. So basically pay for it when you need it.
But I think the single biggest factor in all of this is the value of your currency. A strong currency makes affording health care much easier. We all know this. If we had a commodity backed currency, such as gold or silver, then health insurance and health care in the US and other places would be cheaper. I think the single biggest factor in nearly every problem with have can be attributed to weak fiat currency.
Economics is not finance, which is why a lot of anarchists don’t understand insurance. The insurer underwrites the risk of a less-than-certain casualty. It does not underwrite the efforts to keep that casualty from happening. If it did, then the premiums would reflect not only the risk but the cost to run your life or your business as well. For example, an insurer that undertook to insure a trucking fleet and then proceeded to maintain and inspect vehicles, train drivers, etc. would no longer be an insurer. It would be a self-insured trucking company. There is simply no financial incentive for an insurer to get into the risk management business. To point to another real-life example, Underwriters Laboratories only tests existing products; it does not manufacture them.
The point again is that insurers compete for premium dollars from good risks; they are not in the business of managing risk. And to return to topic, health care in the US is increasingly expensive and inefficient because of public and private socialization of risk. And since insurers are not permitted to discriminate among risks or decline to underwrite bad risks, they have no alternative but to increase premiums, and doctors have no incentive but to increase fees.
I recall that he made a distinction between two broad types of insurance, pointing in the direction of which security would fall under. When I first read the book I couldn’t see why this mattered, but I suppose I can now. Apparently Hoppe and one of the Spanish “Austrians” (some of the most innovative members of the school) had a debate over the nature of private security, i.e. what form it’d take. Unfortunately, what came out of this is nowhere to be found online.
I like what Salerno wrote in the postscript of Economic Calculation in a Socialist Commonwealth
As the parasitic welfare state expands its power of monetary inflation and of regulating and intervening into its host “mixed” economy, we can expect productive activities to become more chaotic and guided less and less by socially-determined market prices. In fact, long before a state of complete socialization is achieved, economy and society will begin to disintegrate amid failure of markets to clear, increasing barter, less efficient sizes and forms of business organizations, misallocation, and technical inefficiency of productive resources and disastrous declines of gross capital investment, labor productivity, and living standards.
Another area in which we face the prospect of calculational chaos is health care. By wildly subsidizing and stimulating the demand for health care services of selected special interest groups beginning in the mid-1960s, the United States government precipitated a never ending and catastrophic upward-spiral of health care costs.
In addition, the irrational and labyrinthine structure of regulations and prohibitions imposed by government on the industry has massively distorted resource allocation, restricted supply, and further driven up the costs of medical care. The tragic but predictable result of such intervention is that many of the unsubsidized members of society have been effectively priced out of the market for health care. The simple and humane solution to this tragedy is to quickly terminate these antisocial subsidies and dismantle the destructive regulatory structure, permitting the competitive price appraisement and resource allocation process too operate unimpeded.
But, of course, the internal dynamic of the welfare state is never to retrench and risk disaffection of its pampered and powerful constituencies, for example, the American Medical Association, the American Association for Retired Persons, the entrenched bureaucracies of nonprofit hospitals, and so on. And so we face the prospect of “national health care insurance” which is a euphemism for the thoroughgoing socialization of the health care sector, with its resultant shortages, further suppression of competitive incentives, and deterioration of quality. But this is simply another example of the mad logic of the welfare state: since the government produces nothing that is valuable in terms of social appraisement, it can only supply welfare to some by siphoning off the resources and destroying the economic arrangements that support the welfare of others. In attempting to repair the politically unpopular destruction of its earlier policies, it is driven to further isolated acts of destruction until it arrives, with cruel and ultimate irony, at the policy for the systematic destruction of society and human welfare, that is, socialism.
some good reads I found…
A Four-Step Health-Care Solution
Socialized Medicine in a Wealthy Country
Why is Medical Care so Expensive?
Oh, and I really adore Dr. Block, this is a good listen Health Economics
Well, I wish full coverage meant just that. I’m afraid to seek medical help, the charged to the hilt non-competitive prices, make me dislike being practised on.