Organization: Penn State University
Date: Mon, 14 Sep 1992 13:27:50 EDT
From: <DGS4@psuvm.psu.edu>
Newsgroups: alt.politics.bush
Subject: Re: Bush/Quayle's Health Plan -- vouchers?
 <1992Sep13.195519.25265@CSD-NewsHost.Stanford.EDU>
 <92257.175356DGS4@psuvm.psu.edu>
 <1992Sep14.163017.5798@CSD-NewsHost.Stanford.EDU>

In article <1992Sep14.163017.5798@CSD-NewsHost.Stanford.EDU>,
andy@SAIL.Stanford.EDU (Andy Freeman) says:

Deletions again made to clear up clutter.....D
>>
>>I would ask you what you think is the most effective and equitable
>>way of deterring unhealthy behaviors.  One option is to price health
>>insurance on the basis of risk.  I would argue that this is both
>>ineffective and inequitable.  It's ineffective because it is all too
>>easy for people to heavily discount the cost of unhealthy behaviors
>>which might increase their risks of being sick 20 or 30 years in the
>>future.
>
>It isn ineffective only because "we" insist on picking up the pieces
>for people who do that.  That's our fault.

No.  Humans are very myopic.  Even if they are well-informed of the
costs and benefits of the future, they tend to discount it.

>>It's inequitable because it requires health care workers to
>>ignore the needs of those who need their services most, because they
>>don't have money to pay.
>
>Evolution in action.

That's your personal opinion, which, in my personal opinion, is not held
by many.

>
>>If you want people to stop smoking, to stop drinking, to stop engaging
>>in unhealthy behavior
>
>I don't want people to stop smoking, drinking, eating fatty foods, not
>exercising, and so on.  I'm not a health nazi - if someone wants to
>swim with sharks, that's fine with me.  I'm just saying that they
>should pay the costs because they get the benefits.

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.  It's
not a question of whether or not people should pay the costs of their
behavior, but how to assess those costs.

>>t is far more efficient to raise the direct
>>price of the behavior, rather than raising the cost of health care
>>(through higher ins. prem.) to deter the behavior indirectly.  If you
>>want to deter smoking, and make people pay the full costs of smoking,
>>then you tax it like crazy.
>
>We tried that in the US for alcohol; it was called Prohibition.  We're
>trying it with cocaine and MJ; it's called the war on drugs.  That

Do you have a logic problem?  Prohibition is outlawing the sale of the
good.  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.


>approach does not work, so any system that depends on its success is
>doomed.
>
>It doesn't even apply to not exercising and other PRACTICES (not
>associated with products) that are unhealthy.

Every good and service has a price, so your argument is incorrect.
Besides, there are no good studies that show exercising
actually reduces health care costs over your lifetime.  In fact, by
living longer you are more likely to die of a lingering and costly
disease, raising your health care costs over the lifetime.

>If society wants me to pay for the health costs of people who don't
>exercise, I'm going to bring the power of the state down on people who
>don't exercise.  I'm going to institute standard diets.  If you don't
>want me to have this kind of control over your life, don't ask me to
>pay for it.

Read what I've written.  All I've suggested is that the government, if
it is going to provide national health insurance, can attempt to make people
internalize the health care costs of their behavior by adjusting relative
prices of key goods and services to make them reflect these health care
costs.  No mandatory diets.  No required exercise programs.  No
"controls" over anyone's life.  People are perfectly free to make their
choices within the framework of the market system.  The prices, however,
reflect the costs imposed on the rest of us through the health care
system.

>The difference will decrease rapidly if the people who believe in the
>"overhead is excessive" theory are actually correct.  That's what
>happens when superior producers come on-line; the inferior ones either
>change or die.

Read my lips.  No single insurer can undertake to wipe out administrative
costs.  It has to be done collectively.  I firmly agree that within the
current structure of our health care system, insurers and health care
providers are minimizing the costs of providing insured health care.
Our administrative costs will not decline until we reject our multiple
payer system.


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.
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