It looks obvious

“Things should be made as simple as possible, but no simpler.” — Albert Einstein

Short note about the legend of not for profit prioritization

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One of the most compelling arguments, used by those who favored nationalized health care system, is that health is not profitable. Therefore leaving the sick and old in the hands of companies that tries to maximize revenue and profit, even in a competitive market, often leave those who are in need with less than desired service. The only way to provide good, and fair, health service is to remove the profit motives from the system - or in other wards make it a service provided by the state.

However what this argument doesn’t revel is the fact that nationalizing health care systems doesn’t eliminate the economical considerations,  it just shifting them to the government. After all, the fact that one doesn’t pay directly for health services, either through insurance or directly to the service provider, doesn’t make the service itself free of cost - it just shift the cost somewhere else. Even if we remove the doubt that governmental program will be more efficient in allocating resources, We cannot ignore the fact that the allocation of resources isn’t infinite. And as always, decision making about allocation of scarce resources requires prioritization. 

Such prioritization will include cost benefit analysis - or in other words which are the most important services we can provide with the budget we allocated for health care. And while nationalized health care might have some benefits of broader access, although I seriously doubt it, it is coming at a cost - setting the priorities for one’s health is invoked by bureaucratic system that might have different consideration about spending his/her tax money. 

It isn’t that the American Health Care system is working, evidence probably will suggest the contrary. However it is debatable if what we see is a cause (Free Market) and effect (low level of health care system).  However, arguing that nationalize health care system purify the decision making from economical decision is wrong. The prioritization of scarce resources leads to:

I asked them if they liked their health care system. They all said yes, very much, particularly for the day to day needs and common procedures like childbirth. However, they also told me the system breaks down when you get really sick. There’s just not enough money for treating terminal diseases and so they "just let you die".

How important is it, for the society as a whole, that an old women will get hearing device? how critical is it, for national health care? obviously, and understandably,  not so much:

A woman aged 108 has been told she must wait 18 months before the Health Service will give her the hearing aid she needs.

Former piano teacher Olive Beal, one of the oldest people in Britain, has poor eyesight and uses a wheelchair.

The delay could mean she will be unable to communicate and listen to the music she loves.  

But how important is it to the old lady? would she allocate her resources differently? most likely.

There is a lot to say about innovation, drug development and improvement under nationalize system compared with relatively free market system, but I’m trying to gather more data to demonstrate my point of view.

 

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Written by Rogel

July 30th, 2007 at 11:21 am

Posted in The Free Market

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    You clearly insist on portraying a "black & white" picture. Let's look at the case of that nice little old English lady for a moment. You eagerly that she'll have to wait 18 month for a hearing aid under the nationalized NHS. I don't of course have any other data to suggest otherwise. I do, however, know that private medical care is just as easily available in the UK as it is the US, or for that matter – In any other Western health system. So, let us suppose she does have private recourses… In that scenario, she can (and at a very similar price to that un the US) buy her hearing aid at the UK, just as she would have been able to in the US. Now, for the sake of argument, let's assume the opposite – she doesn't have that kind of cash. In the NHS she will need to wait 18 month. Perhaps she'll make it, perhaps she won't. Under the American system she is bound to die without ever receiving a publicly paid for hearing aid. So, let's assume a "perfect" solution is unavailable (one that will provide a hearing aid here and now) what system do you suppose our nice elderly lady will prefer? Which one will she benefit more from?You ask whether she'd allocate her resources differently. That pretty much shows your ignorance in health economics (nothing personal). There's no reasonable model of healthcare economics which is not insurance based. Health risks are unpredictable on the individual level, and therefore can not be rationally compensated for without risk sharing (insurance). The question is not whether this lady would choose otherwise, but rather whether a private, non-state, insurer would treat her better. Let's now treat the first example. People say they think there's just not enough money in the system. Ok… so is there? And is more money always a preliminary requirement for better care? Well… I don't know. I do know the health care literature claims otherwise. It is fairly agreed upon that there's an optimum spending level for healthcare after which considerably large funds are required to achieve marginal advantages. Doubling a country's (one of the western ones) health expenditure will hardly (if at all) be noticeable in the health of the population, nor is it likely to provide more patient satisfaction. Of course, if you ask the public, they'll always tell you they want more spending (as long as it's not their own). That's sort of an irrelevant question too. I don't know what point you're trying to make, but I'll be happy to aid you with data. If you're looking for data that will support the American health system model – good luck to you. American based economists have failed at that for over 4 decades…
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    There should be a law that  nobody will allow to ignore my point! :) <div>What I argued is simply that the claim that NHS decisions and prioritization isn't economically based is wrong. If the prioritization and level of service provided by the NHS is better than the one a Free Market will produce is entirely different discussion. </div><div>Here is the data I'm looking for: Pharmaceutical drugs  development is the US and Europe in the last 30-40 years, mostly major development. Do you have access for such data?  </div>
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    Someone else had a good point about the old lady story.
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    If your only claim is that the NHS, or any other state owned/regulated system makes decisions also based on economic considerations… then it basically an axiom. What is usually debated is quality of those decisions compared to those of "purely" economically concerned actors.
    What about Pharmaceutical drugs development? Scope (i.e. how much development was done in the US vs. Europe)?
    I hope your not going to try and link that to "better health"… no-one before you has ever seriously succeeded (and many have tried… that article I sent you last time, which I think is totally erroneous is an exception…)… In fact, most researchers suggest that the entire health care system is accountable for only 10-20 percent of measurable differences in populations' health… The rest is politics, economic prosperity, industrialization, environment… and the like.
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    The only thing suggested by that someone else is basic ignorance of health economics (sorry for being rude. But (a) that's true, and (b) I'm in pain). As already said, ALL health care markets are insurance based. Allocating the decision to that little old lady is no more than a fantasy. The question of who allocates is never an individual decision in insurance based markets.
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    I'm impress with the fact that you have patient to me with your broken shoulder. <div>I'll start with my humble request - can we start with medicine development by country, and if it is possible to eliminate the allergy drug etc. from the list. I don't need to build scientific thesis, just to get some good impression of this idea, it will be much more than Michael Moore ever did :)</div><div>I'll attribute it to your pain but you can do better than argue that:</div><div>1. The US is an example for the failure of Free Market to provide adequate health service. The US health care system is heavily regulated and heavily funded by tax money. </div><div>2. You argue that the choice is never for the individual,  while gracefully ignore the fact that  all western markets are heavily influenced by the monopoly of the state. But even then I have more choices than the old woman - I can choose a different insurance, and if government regulation about cross state choices will be removed - I will have more competition on my monthly payment. When Companies will need to compete to win customers, instead of satisfying regulators, I'll have more choices. We saw it in other markets, which were previously declared as "natural monopoly", and we can see it here as well. </div><div>The simple fact is that, as you mentioned your self, the differences aren't as big as people might think - the debate isn't really on health care but on wealth distribution. So if this is the case, why won't we debate the real issue?</div><div></div>
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    ... It is me again, and again I link to this guy that you don't like. But the fact is that he bring some interesting facts about how the Government, the American one, limits choices and make insurance premiums higher. Interesting reading.
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    1. I'll see if I can find you that data. No promises. 2. Funny how you claim I have a weak argument, while yours is based on no stronger base than: there's no country in the world where is has happened, but since it all seems logical to me... than it must be true.3. Besides blaming government, have you ever tried to consider why such an arrangement has never developed? I mean, if private insurers could indeed provide better coverage – why have none done so? Almost all national health care laws were initiated in the last two decades, and in light of market failure… why is there not a single health care system were market failure has not prevailed?  
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    I have nothing against that guy. I've just read, heard, seen such a magnitude of health economic literiture, health policy literiture & health management lituriture to safely say he's most likely to be wrong.

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