From: tcox@ssrl01.slac.stanford.edu (Tony Cox - (415)926-3105)
Newsgroups: talk.politics.medicine
Subject: Re: HIAA and Reform
Date: 14 Dec 92 14:12:57 -0800
Organization: SSRL, Stanford Synchrotron Radiation Lab
NNTP-Posting-Host: ssrl01.slac.stanford.edu

In article <92347.091708DGS4@psuvm.psu.edu>, <DGS4@psuvm.psu.edu> writes:
> In article <1992Dec11.153702.1@ssrl01.slac.stanford.edu>,
> tcox@ssrl01.slac.stanford.edu (Tony Cox - (415)926-3105) says:
>>
>>In article <92344.115628DGS4@psuvm.psu.edu>, DGS4@psuvm.psu.edu writes:
>>> In article <1992Dec8.171033.1@ssrl01.slac.stanford.edu>,
>>> tcox@ssrl01.slac.stanford.edu (Tony Cox - (415)926-3105) says:
>>>
>>>>   If you were to choose 2, as I would hope, you may end up
>>>>   concluding that a free market is the most effective means of
>>>>   providing the diversity required.
>>>
>>> {DGS}
>>> This presumes, of course, that a free and profitable market for
>>> health insurance will continue to exist....
>>
>>  {TC}
>>   Continue to exist eh? It doesn't exist now....
>>
>>   To show me that a free market system cannot deliver the goods,
>>   first give me a free market. Otherwise you should perhaps drag your
>>   ailing straw man somewhere else.
> 
> I wasn't aware I was talking straw men.  I was describing the current
> conditions in the private health insurance market.  I am curious why you
> think a private market will work in health insurance.

   Dennis. Your straw man is that the existing health care system is a
   free market. Having decided upon this particular fantasy, you then
   proceed to attack it using phrases such as 'market breakdown',
   which are supposed to justify your preferred scenario, even greater
   state interference in the market.

   I cannot answer your question about why I think a `private market'
   might work, because I have no idea what you might mean by the phrase.
   My dictionary has a gaping hole between "private law" and "private
   parts", and you have twice ignored my requests for clarification.

>>
>>   {TC}
>>   What do you mean by market failure? Seems to me like the market is
>>   responding in classic textbook fashion to the constraints placed
>>   upon it.
>>
>>   o - Doctors, through the medical licensing boards, control the
>>   qualifications and so indirectly the _number_ of new doctors
>>   entering the field. This, and the state granted monopoly that they
>>   enjoy, has generated salaries around 6x the average wage. (Cf.
>>   Canada 4x and UK 2x, neither free markets BTW, but clearly such
>>   practices never _decrease_ salaries).
> 
> {DGS}
> As I've noted elsewhere, licensing raises physicians income, but, in
> theory, cannot be traced to an effect on medical care prices, since
> it may also have an effect on the demand curve.  In practice, I would
> agree that it has raised prices, thus raising the cost of health insurance.
> By how much?  I don't know, but I should wouldn't want to base my
> argument on this.

   I love economists. Here for the layman is a translation:-
   "Doctors can jack up their prices to such an extent that people
   cannot afford to go to them anymore". If this isn't the populist
   justification for the current `debate', I'd like to know what is.

Tony Cox, Stanford, CA
Newsgroups: talk.politics.medicine