Comments (6)

• Ribald

  A few points about Hoppe's 4-point plan:

  1: "...Because consumers would no longer be duped into believing that there is such a thing as a "national standard" of health care, they would increase their search costs and make more discriminating health-care choices."

  Since the problem is supposed to be solved by a sufficient amount of labor to pay the doctors, it seems that non-doctors would be burdened by search costs, decreasing the amount of labor available to pay for doctors. On top of that, consumers would be at greater risk of deception by charlatans and their choices would be predictably irrational. Having little or no medical knowledge, they would be entirely unequipped to judge medical advice. Relatively expensive treatments would be avoided in favor of cheaper treatments, without proper regard to the benefits either provides. These effects may nullify any supply increases.

  2. It's certainly true that the regulations regarding production and sale of medicine need to improve, but it doesn't seem so simple as deregulating. For example, it would be impossible to litigate product liability if there were no laws concerning product liability.

  3. See 2. It would be trivially easy for insurance companies to deny the insurance claims of the gravely ill to boost their profit margins. Without laws restricting this practice, it is certain that those whose illnesses are costly to treat would be locked out of the insurance market altogether and would typically die and/or go bankrupt without a vast reserve of savings. A similar scenario plays out on the desert island, as was eluded to. As in (2), there would be little possibility of litigating without laws regulating insurance.

  4. I would laugh, if Hoppe's fourth idea wasn't so utterly bizarre. Contrary to minority opinion, people do not typically seek or avoid high-risk behaviors based on how much they can be compensated for being injured. Rather, their behavior is predicated on avoiding the risk. Furthermore, another name for "subsidies for illness" is "insurance". Yet, risky behavior is not in evidence among those concerned about risk (those who buy insurance). Rather, their use of medical care increases, which decreases the overall cost of their care over their lifetime.

  The scant few who act as Hoppe expects can't be depended on to avoid unnecessary risk in any sort of market. They are the sort that would purchase insurance in the expectation of injuring themselves, rather than to mitigate the risk of an unforeseen event.

  As Berdine says, these ideas appear draconian, but if you make very poor assumptions--assumptions that paper over the shortcomings of the ideas in question--then they are, indeed, the only way the problem can be solved.

  Published: October 23, 2009 2:50 PM

• Jorge Borlandelli

  Answer to Ribald:
  1. The unregulated market will develop specialists in advising about better doctors and treatments. The way rating agencies used to work before they were captured by the issuers of securities.
  2. Not true.
  3. A responsible parent would insure before conception and therefore before any illness is present. Those who are not insured and get an illness need to face the consequence of their choice. Of course, private charity organizations might help them.
  4. You are describing pre paid medical services and not health insurance. Going to the doctor should be paid by the patient. Health insurance should be for catastrophic illnesses and the insurance companies can lower your premium if you do the right things and increase if you the wrong ones.

  How long can socialists argue in favour on regulation without admitting its obvious failures?

  Published: October 23, 2009 6:51 PM

• LibertyCowboy

  I agree with Hoppe's plan.

  1. People purchase items and services ranging from landscaping to software without extensive regulation or education. It is simple enough to get a referral from a friend or perform a cost/benefit analysis.

  Currently, the most expensive treatments are chosen because someone else is paying. Just as we don't need PhD automotive engineers to change oil, doctor's need to delegate more and focus on medical research.

  2. The common law provides that people abide by their contracts and always has within the US.

  3. While there is a time and a place for charity, let me say this: there is a $300 way to treat any illness and a $30,000 way. For example, you can equip a hospital with expensive digital heart rate monitors and redundant power supplies, or you can take someone's pulse more or less for free. Once we price healthcare at a rate average working people can afford with their cash on hand, charity will be a non-issue.

  4. As a self-insured individual I avoid risky behaviors like motrocycle racing in large part because of the fees I might have to pay if injured. By altering insurance fees based on claims expierence, as in the case of auto insurance this could be extended to commercial insurance. My overall goal is to maximize expected lifetime wealth.

  Published: October 24, 2009 5:47 PM

• pbergn

  The author advocates for another extreme, which is essentially anarcho-capitalism, where individuals co-exist in minor groups, and interact with each other on on-demand basis, driven by the day's demands...

  This resembles a primordial society of pre-historic man, which lies in a stark contrast to the Fascism, Socialism and Communism, which are, the other extremes...

  Is it not self-evident that the individuals, given absolute freedom, will prefer non-productive means of subsistence by coercing them from the more productive ones, barring the existence of a power broker?

  Remember what happened when the North America colonies revolted against England, and there was practically no rule of law in certain neutral areas for a while... This gave rise to skinners, thieves and other kind of plunderers... Do you really think that the productivity of the settlers have increased due to overturning the authority of the land? And conversely, the authoritative coercive power of the kings has driven the settlers to revolt, in the first place...

  In other words, too much centralized coercive power decreases the productivity of the society, due to the decreasing of the vested interest to be productive of its members, and too little power, gives rise to various machinations, schemes and violence...

  On a final note, I would like to bring to the attention of the readers the fact that too fine-grained society has a very short time-horizon in terms of planning for the future, since the individuals are driven primarily by their own goals, and may easily overlook the bigger picture, resulting in extreme redundancy and duplication of work (e.g. due to lack of common standards, and lack of sharing the previous technological break-throughs by some parties with the others, being viewed as competitors)... It is easy to see that very fine grained society will spend most of its productive time either on settling the disputes or heavily defending against existing and potential ones...

  Much like the primitive tribes in remote corners of Africa and Amazon will eternally battle each other for control of the resources, the fine-grained society is limited in its development scope by design.

  Only the existence of a "fair" broker can ensure continuous development, which can be a weak government, for example...

  Published: October 25, 2009 9:36 PM

• Bala

  Jorge Borlandelli,

  You asked

  " How long can socialists argue in favour on regulation without admitting its obvious failures? "

  The answer is simple. As long as they think they are morally justified in doing so. Utilitarian arguments will not convince them off the "sound", "moral" path. Work out all the models you want to show the real alternative to regulation, but they will not even listen to, leave alone subsequently understand and finally accept what you are saying .

  You will be called a selfish, immoral person for stubbornly refusing to take responsibility for the suffering of your poor, less fortunate brethren. Your arguments and models will be called self-serving attempts at preserving your privileges.

  My simple point is that while articles such as these will give a person like me (who shares your premises on this issue) a picture of how healthcare will work in a free market, it will not convince a supporter of socialised medicine that his ideas are wrong and hence will not work.

  For that, you need to write to show why socialised healthcare is immoral and hence unworkable, like everything else immoral.

  Published: October 26, 2009 9:41 PM

• Luke

  The author offers the begginings of sound advice on the problems with health insurance (and thus healthcare demand), but, throughout his article, completely neglects -except by referencing Hoppe- the coercive forces in place which restrict the supply of health care workers and products (via the AMA, State licensure of pharmicists, FDA regulations on drugs - etc.). Take his conclusion for example:

  "It is not enough that people are available to do the healthcare work. Somebody else must divert leisure to generating real wealth (fish) to pay the healthcare providers. The healthcare problem cannot be solved by money. The problem can only be solved by people able and willing to generate real wealth in order to sustain healthcare workers."

  This is the most superficial solution to the most superficial statment of the healthcare problem. The surface healthcare problem is that "we" can't afford to pay for healthcare. The solution offered above just says that someone should divert more real resources to payments for healthcare. This logical chain utterly ignores the underlying causes of the high cost of care.

  In reality, the solution is to end the market distortions in supply and demand. Hoppe's plan is that solution. The author knew this, or seemed to, since he referenced Hoppe. So I must give him credit at least that far.

  Published: October 28, 2009 7:04 AM