Organization: Penn State University
Date: Wed, 26 Aug 1992 09:21:17 EDT
From: <DGS4@psuvm.psu.edu>
Newsgroups: talk.politics.misc
Subject: Re: National Health Care
Distribution: usa
 <1992Aug25.183354.15487@kadsma.kodak.com>

In article <1992Aug25.183354.15487@kadsma.kodak.com>, pajerek@telstar.kodak.com
(Don Pajerek) says:
>
>In article <92238.112556DGS4@psuvm.psu.edu> <DGS4@psuvm.psu.edu> writes:
>>In article <1992Aug25.010925.4041@brownfield.glv.com>, brownfield!jbrow (Jim
>>Brownfield) misrepresents my views by saying:
>
>[stuff deleted]
>
>>I've never said that government is a "model of efficiency", only
>>that in some cases, markets do fail, and society may need other institutions,
>                     ^^^^^^^^^^^^^^^
>>including government, to cope with that failure.
>>
>>Dennis G. Shea, Penn State
>
>I agree with this, but clearly many extremists in this newsgroup don't. It    s
>seem
>to me that a market system can only be used for goods/services that can be
>produced at a profit; there is no market for money-losers. Yet, sometimes
>those money-losers are goods or services that society needs. So, how to
>provide
>them, when the private sector can't and/or won't (and for good reason)?

Insured medical care may be one such good.  I've posted at length on this
before, so I don't want to do it again, but a combination of problems in
health care (uncertainty, externalities, moral hazard, asymmetry of info.,
and adverse selection to name a few) may make a sustainable competitive
market in insured medical care impossible.  The rising number of uninsured,
the decline in profits in the health insurance industry, the rising costs
of medical care may be signs that the market, as it has become MORE
competitive in recent years, is breaking down.  Insured medical care in
in the US flourished when BC/BS dominated the market, with shares of 50
to 75%.  That number has dropped steadily.  A number of economic studies
indicate that, because of the strange combination of factors in health
care markets, increased competition can raise costs.

There are a number of ways to try to provide goods that the private market
won't.  Almost all of them require the taxing authority of government, to
prevent free riders.  What I would prefer to see is a system funded through
taxes (I think this has merits on equity) rather than premiums, with some
limited choice of insurers (perhaps organized at the state level) with
payment rates established by state boards with representaitives from
insurers, providers, consumers, and businesses.  I'd prefer that the
federal government define some benefits that must be provided, some
limit on the growth of costs per year, some revenue sharing, especially
for poorer states.  Other than that, I'd prefer that they leave the details
to the states.

There are numerous states that are already experimenting with novel approaches
to health insurance under a program funded by the Robert Wood Johnson
Foundation.

Dennis G. Shea, Penn State
<<DISCLAIMER>>
Ain't nobody's bizness but my own. I'll be happy to accept all
the credit for anything I've written.  It's funny, however, how
employers only acknowledge the profitable ideas.
Newsgroups: talk.politics.misc