Organization: Penn State University
Date: Mon, 14 Sep 1992 19:10:30 EDT
From: <DGS4@psuvm.psu.edu>
Newsgroups: alt.politics.bush
Subject: Re: Bush/Quayle's Health Plan -- vouchers?
 <1992Sep14.163017.5798@CSD-NewsHost.Stanford.EDU>
 <92258.132750DGS4@psuvm.psu.edu>
 <1992Sep14.211721.10171@CSD-NewsHost.Stanford.EDU>

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.

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.  Maybe if you tried to
explain your reasoning, instead of simply saying prohibition didn't work,
thus, neither will this.  I certainly don't find this last type of
argument sufficient to show that it can't be done.

>Moreover, to the extent that certain costs are caused by behavior and
>not taxable goods/services, that approach requires intervention in
>that behavior.

Compared to what??  In the private market now many private insurers have
waiting periods of up to a year in which health care costs are not covered.
Don't you think that results in "intervention in.....behavior"?  I don't know
about you but I much prefer a system that says, "Go ahead and bungee jump if
you can afford it, but we are going to tax it so that we can cover potential
health care costs.  If you do have an accident, however, we will save your
life." to a system which says, "We'll keep the costs of bungee jumping low,
but those of you who are unwise enough to bungee jump without adequate
health insurance, we'll stand around and watch you bleed to death."

>>It's not a question of whether or not people should pay the costs of their
>>behavior, but how to assess those costs.
>
>Hint: unimplementable assessment systems can't be a solution.

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??


>My logic and examples are completely correct.  A ban is just an
>extreme tax.  MJ isn't banned at the federal level, the tax rate is
>merely very high.  (I think that cocaine is the same.)  Surprise - it
>is avoided, as much more modest cigarette taxes are avoided as well.
>Hiking those taxes isn't going to help.  (BTW - Cigarette smokers are
>actually subsidizing the rest of us now.  They die right after they
>start collecting their pensions, so the rest of us get "their" pension
>money and they don't incur higher life-time health costs.)

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

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.

You keep saying that this policy won't work.  I'll keep asking you,
"compared to what?"  You would make health insurance fully risk rated?
Let those who can't buy it because of their behavior die?  What about
those with genetic risk factors?  I think it was Canadian health economist
Ron Evans who wondered why Americans keep comparing the Canadian system to
some perfectly competitive market system which never existed and never will
exist.


>>All I've said is that we should tax the goods so that relative prices
>>reflect the additional health care costs likely to result.  The person who
>>undertakes the activity still can buy and sell the good (it's not prohibited)
>>but will also see the price reflect the future costs of health care which
>>will be paid for in a national health insurance system.
>
>>
>>Read my lips.  No single insurer can undertake to wipe out administrative
>>costs.
>
>To the extent that that is true, it applies to single payer systems
>as well.

Two insurers,  One hospital.  Each insurer requires the use of a different
PC package to process claims.  The same information is collected in each
package, simply in different orders, different menus, etc.
To the hospital each PC
program minimizes the cost of collecting the necessary information for that
insurer.  The hospital has to train 1 person to work with each program.  Only
collective action by the insurers to agree to use the same PC package will     r
lower the hospital's costs of training, without changing the insurer costs.

Multiply this by 10,000 different systems which collect almost identical
information.  The argument that everything that applies to multi-payer systems
applies to single-payer systems is a fallacy created by your own mind.
I really suggest that you go spend a day or two in the billing office of a
U.S. hospital and a day or two in a Canadian hospital.  If you can't tell
the difference, then you must have inhaled.


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.