From: andy@SAIL.Stanford.EDU (Andy Freeman)
Subject: Re: Bush/Quayle's Health Plan -- vouchers?
Organization: Computer Science Department,  Stanford University.
Date: Tue, 15 Sep 1992 16:54:17 GMT

In article <92258.191030DGS4@psuvm.psu.edu> <DGS4@psuvm.psu.edu> writes:
>In article <1992Sep14.211721.10171@CSD-NewsHost.Stanford.EDU> andy@SAIL.Stanford.EDU (Andy Freeman) says:
>>>And I don't disagree.  Read what I've written.  My argument is that a
>>>policy that tries to make people pay the costs of their behavior will
>>>work better if it puts the future costs of needed health care into the
>>>the product price, rather than into the health insurance price.
>>
>>And, I've shown that that can't be done; so much for "work better".
>>Taxes are avoidable; ignoring that is policy-suicide.
>
>No, you haven't "shown that that can't be done." (At least I haven't seen
>any logical deductive proofs, or even very convincing arguments that it can't
>be done.)  Avoiding taxes costs time and money as well.  Even if avoidance
>occurs for some people, you have raised the direct and indirect costs of the
>good/behavior, which is the goal.

Shea's goals keep changing.  He insisted that his goal was to make
people pay for the costs of their choices, now he's satisfied if he
can increase their costs somewhat, which is a very different thing.

Tax-avoidance isn't a logical fact, it is an empirical one.  If Shea
can't see it happening ....  Since he can't see that some health costs
come from things not associated with single goods or services, that
isn't surprising.

>So far I don't find your arguments against the idea that national health
>insurance coupled with changes in taxes is a more efficient and more equitable
>way at producing desired health very convincing.

Perhaps because I'm uninterested in POLITICAL equity and efficiency.
Shea thinks that we can appropriately shift costs through the
political process; that's true politically, but not economically.  It
isn't even true of all things with health care consequences.  (Yes, we
can tax the bungee jump providers, but how are we going to tax things
I do to/for myself?)

>Unimplementable according to you.  The vast majority of health care problems
>are caused by 3 factors, excessive smoking, excessive drinking, and
>excessive consumption of fat.  You're telling me that we can't tax those
>three items??

The short answer is "no".  Prohibition proved it wrt drinking, we
already have cigarette smuggling, and it isn't obvious that taxing fat
will work out the way it must for Shea's system to work.  (Besides,
sugar is an adequate substitute as far as health goes.)

>BTW - "According to some estimates", cigarette smokers are subsidizing
>the rest of us.  I've seen studies that go both ways in recent years.

Yup; it's close enough that the subsidy probably isn't very big, no
matter what direction it goes, but that doesn't stop the anti-Smoking
Nazis from pushing for higher taxes.  Remember what I said about using
the political system to shift costs?  Shea insists that it works, but
then one of his best examples demonstrates that "works" is a political
definition, not an economic one, despite his claims.

>In any case, it requires you to calculate the pension costs, too.  If you'd
>like to talk pension policy, fine.  I'm talking about health care policy.

Money is money.

>Cigarette tax avoidance comes about primarily because of differential
>tax rates across state lines.  Remove the difference and, especially in
>a country like the U.S. with long distances between borders, tax
>avoidance drops.

Just like cocaine, mj, alcohol, ....

>What about those with genetic risk factors?

What about them?  We can't save everyone.  It doesn't make sense to
even try.  Any policy that assumes otherwise, or tries to do that,
is doomed.

>Multiply this by 10,000 different systems which collect almost identical
>information.

Except that NO hospital in the US has 10k different payers and no
hospital handles multiple systems the way that Shea insists they must.
Why can't Shea make his argument without strawmen?

Moreover, the Canadian system ALSO handles multiple payers yet doesn't
suffer from the problems that Shea assures us are inherent.  (Note
that in his description, the overhead costs are proportional to the
NUMBER of payer systems, not adjusted by usage.)  A low-overhead payer
would soon become dominant, if overhead is in fact significant.

-andy
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