By Larry Marsh, Kansas City Star Midwest Voices columnist 2009
Elderly on Medicare and Social Security are not the only ones living with socialism in this country. In most urban communities if there is a fire in your home, you call the socialist fire department. If someone tries to break in, you call the socialist police department.
Why are there few, if any, book rental companies in America? That would be because of all those socialist libraries. Most people got their education in socialist elementary and secondary schools. Let's not forget all those socialist roads and bridges and that socialist military that some of us have served in. Then there’s that socialist worker who drops off the mail at your home six times a week. Is it time to stop the spread of all this socialism?
A close relative called me the other day gravely concerned about the rush towards socialist medicine. Her favorite talk radio show has been expounding on the evils of socialism again. She seemed beside herself with worry. I tried to calm her fears by pointing out that as a retiree she is already under socialized medicine. As a county social worker she spent her life as a socialist worker directing her clients to various county socialist services.
Conservatives and liberals have one thing in common. They are both worried about an evil authoritarian entity controlling them and exploiting them. For conservatives it’s big government. For liberals it’s big business. There is something about fear that causes careful, logical analysis to fly out the window. Reforming health insurance will require a great deal of thought and hard work by the moderate middle. It’s much easier to take things to extremes and talk in slogans, but it’s not likely to lead to an optimal solution for a very complex problem.
In general do public companies crowd out private ones? The history of the Brazilian economy is one where a substantial number of public companies successfully competed side-by-side with private ones for many decades. In many places such as Eastern Europe and China private companies have been crowding out unprofitable public ones. There is nothing inevitable about a public company crowding out a private one or vice versa. It all depends on the nature of the market and the rules of the game.
Consider how public and private companies have fared in America in the past. The post office dominated the mail delivery service until recent years when UPS and FedEx among others have taken over a great deal of the more profitable business and are gradually crowding out the public option which is constrained by the political necessity of providing home delivery to every citizen. The public library has prevented the development of an extensive book rental market, but, so far, has not done much to deter private DVD rental businesses like Blockbuster and Netflix although digital downloads could change that before long.
Throughout American history private schools have competed with public schools. Public education has certainly not crowded out private education. If anything it is public tax-supported education that is on the ropes and in danger of losing out more and more to its private competitors.
Private security services have maintained a strong presence in the commercial security business while the public law enforcement has focused on the equal application of the law to rich and poor alike. Volunteer fire services generally only operate in smaller, rural communities and private fire protection services of an emergency nature are not really viable for protecting the general public. Tax-supported public fire departments play a vital role.
The general conclusion is that the picture is very mixed with the socialist approach sometimes dominating and sometimes only filling in with necessary, but unprofitable, community services. The bottom line is that effective and fair competition is essential to controlling costs. If we are serious about introducing competition in health care, all providers of medical services should be required to post their prices before any service is performed.
Any health insurance system should be designed to maintain as much competition as possible with effective incentives to drive down costs while achieving key goals such as universal coverage (analogous to the post office’s universal delivery) and no rejection for pre-existing medical conditions. Left wing and right wing slogans will not solve this problem. Only a carefully designed, comprehensive health insurance system will fill the bill.
Also see:
We need to move beyond a one-size-fits-all health care system
To some libertarians even private health insurance is a bad idea
The incentive structure of our health care system is all wrong
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Too much fuzzy thinking, Larry
You are spot on regarding the simple and well-known fact that we encounter many socialistic enterprises in our lives. The question isn't about whether a socialistic extension into the rest of our health care system will work. I do not think for a minute that if we move along this path it will be our imminent doom. But it will be another step towards eschewing that which has made us great.
The postal service is a constitutionally authorized duty of the federal government. So is war. So is coining money. Perhaps the framers were just a bit wiser than you and realized, despite your promise to help craft a "carefully designed" insurance system, "comprehensive" too, that there are some things government can do well, and some not. And some, just maybe, that government makes far worse by its actions. Like health care? The other socialistic enterprises you mention are local in nature, though the feds, eager as always to spend money that is not theirs, have sought to please localities by "helping" with the cost of these things. Has this made them better? I doubt it.
It seems to me that any discussion over how to comprehensively reform an entire system said to be in crisis should begin with a retrospective look into how we got here. But that is not on your radar screen, apparently. Much better instead to simply compare one socialistic enterprise that people like, say libraries, with all others as if we should like those just as much. No, it would be too much to ask to have a debate with someone willing to admit that tax preferences and high marginal tax rates on incomes and wage controls helped to spawn this mess we now confront.
So here is the bottom line: Every "goal" the squishy middle or hard left claims to seek from reform can be accomplished without a great and comprehensive federal law. Tort reforms will help, no doubt. Anti-competitive regulations could be abolished, and the market could be entrusted to act. Tax preferences could be eliminated so that there is no inducement to want a health plan provided from your employer--you might actually want to buy your own. Can you imagine what might follow if consumers of care were somehow more directly connected to the cost of that care? Why millions of actors each seeking what is best for them might just contain costs without crippling innovation, all in the context of empowering people. Yep, expanding liberty. What a concept, huh?
Perhaps, just at a minimum, we could do with a little less conceit about one's thoughtful demeanor because one self-describes himself as a moderate? There are many ways this debate can go, but when you, Larry, begin by ignoring the past and how we got here, and then conclude the only way out is with a sober debate about how to craft a brilliant federal system, it seems to me we've already lost. Medicare, that program you mentioned? Well, it's broke (in all its manifest ways), and it was deeply considered and debated. What strikes me as most sad in all of our present political debates is the vast numbers of people who seem perfectly willing to entrust to government bureaucrats that which, history tells us, those bureaucrats do not understand and always make worse. I trust you, Larry, and people like you, to do what is best for you. Please return the favor.
Rich Davis
Sacramento, California
True competition requires effective representation
Rich Davis
Sacramento, California
I agree with this statement since individuals who negotiate for health insurance on their own can't compete with employers representing large numbers of employees. If you are out of work, working part-time or self-employed, it is hard to compete. Consequently, the large employers get the best deal for their employees and the cost is transferred to individuals with little, if any, market power. Those least able to afford it end up shouldering the heaviest burden. The system should ensure that all individuals are able to choose representation through cooperatives or other public or private entities that can effectively negotiate for them with insurance companies. Individuals on their own will be out-gunned every time. Let each individual select their own group representation in negotiating for health insurance.
A bit of hope?
Larry, I am glad you agree that tax preferences should be eliminated in order to produce something closer to a fair market place (this is one of the few things Obama has articulated which is reasonable), but I think you've missed much of my point. We need, if we are to allow millions of actors to do the hard work of cost control, a closer relationship between consumer and the cost for those things consumed. Now, we can go the governmental route, sure, and use the heavy hand of regulation to try to control costs. But, really, when does this ever work without creating greater problems? Remember that it is, at least in part, cost controls and regulations that helped bring us to this point which now motivates many on the left to want all sorts of more governmental activity to fix what is wrong.
We should be free, no doubt, to seek out whatever beneficial associations we want. But that doesn't translate into a federal solution since there isn't anything in the constitution to permit such a thing. But if you and I want to join forces to negotiate a better deal for ourselves, well, great. Far better for those of you wishing much greater governmental action to want it at the state level where such quaint constraints like the US Constitution aren't a factor. Some states have gone this route. Massachussetts and Hawaii come to mind, both of which are now grappling with the unintended consequences of their actions.
No, my point was rather to support and defend your liberty, as well as mine, by arguing that the federal government, in being denied this health care duty in Article I, should remain out of it except to produce greater competition and a closer relationship between prices and consumers. In other words, it's okay to set up some fair rules we all have to play by (we don't have that today) because of, say, the Commerce Clause, but it is not okay to get into the health insurance business at the federal level.
I lament the present interest many Americans have for liberty, and humbly suggest that its value is far greater than any comprehensive government reform could be. Plus, you have to admit I hope, our founders debated fiercely over that plan, and each of the states had to ratify it as well. On its face doesn't it seem that our comprehensive plan for personal liberty and limited government has undergone a much more critical debate than you think health care needs?