2017

A profit motive maximizes profit and reduces all other expenses. All other expenses represent resource use. By only maximizing profits in a competitive environment, services are delivered using the least amount of resources. Non-profit and government services providers don't have the same level of incentives. They have other incentives not to reduce their use of select resources. Politics play merry hell at keeping costs down in government. Padding salaries is an incentive against reducing costs in non-profits. There are others.

Competition reduces profits as other providers offer alternative services. The combination acts to reduce the amount of resources used to provide services, health services in this case, at the smallest profit margin the market will bear.

The alternatives use more resources to provide the same service. That means for a given level of resource, fewer people maybe served. There is an illusion that spreading the cost over a larger number of people makes it cheaper. It isn't. The total cost to society is higher, but lower to some individuals and higher to others. The same is true for a private system, but the private system has greater ability to provide medical services and so can help more people.

Offering financial assistance so that individuals can afford paying for privates services is what charities have been doing for centuries. That works in tandem with the profit system. I suppose governments can offer financial assistance too. That would be much better than destroying the profit system.

The US system has made competition difficult. They have regulated the means of paying for services to such a degree that makes it artificially inefficient. Prior to those changes back in the 60's and 70's, medical services were much cheaper and far more efficient. So, yeah, the US system is a complex mess that can be streamlined. Making it a public system lets our demonstrably untrustworthy pols run it for their profit. No thank you.

PeterZ wrote:A profit motive maximizes profit and reduces all other expenses. All other expenses represent resource use. By only maximizing profits in a competitive environment, services are delivered using the least amount of resources.

Etc... etc... etc...

And now here is the Econ 101 explanation of why everything you said *does not apply to health insurance*.

Let's take a look at that profit motive of which you speak in any regular marketplace for a good or service. Let's say I'm selling apples...

Do I want as a customer:

A: A person who needs truckloads of apples for their cider business.

B: Some guy who is allergic to apples.

???

Where is the profit motive going to push me to direct my apple supplying efforts? To the person who ACTUALLY NEEDS my product? Or the person who doesn't need it at all?


Now let's say I'm selling health insurance.

Do I want as a customer:

A: The patient with a really nasty brain tumor.

B: The healthy 20 year old with a low risk lifestyle.

???

Where is the profit motive going to push me to direct my health insurance supplying efforts? To the person who ACTUALLY NEEDS my product? Or the person who doesn't need it at all?



In case you haven't caught on yet, that profit motive drives efficient provision of goods and services to where they are needed in society in most markets. It drives them AWAY from where they are needed in society in a health insurance market.


Every developped nation on earth gets this, because it's really freaking obvious... to everyone except about half of America.

It's incredibly simple.

America values rights.

Most western countries value responsibilities.

Socialized health care, decent health care, is a responsibility.

PeterZ wrote:A profit motive maximizes profit and reduces all other expenses. All other expenses represent resource use. By only maximizing profits in a competitive environment, services are delivered using the least amount of resources. Non-profit and government services providers don't have the same level of incentives. They have other incentives not to reduce their use of select resources. Politics play merry hell at keeping costs down in government. Padding salaries is an incentive against reducing costs in non-profits. There are others.

Competition reduces profits as other providers offer alternative services. The combination acts to reduce the amount of resources used to provide services, health services in this case, at the smallest profit margin the market will bear.

The alternatives use more resources to provide the same service. That means for a given level of resource, fewer people maybe served. There is an illusion that spreading the cost over a larger number of people makes it cheaper. It isn't. The total cost to society is higher, but lower to some individuals and higher to others. The same is true for a private system, but the private system has greater ability to provide medical services and so can help more people.

Offering financial assistance so that individuals can afford paying for privates services is what charities have been doing for centuries. That works in tandem with the profit system. I suppose governments can offer financial assistance too. That would be much better than destroying the profit system.

The US system has made competition difficult. They have regulated the means of paying for services to such a degree that makes it artificially inefficient. Prior to those changes back in the 60's and 70's, medical services were much cheaper and far more efficient. So, yeah, the US system is a complex mess that can be streamlined. Making it a public system lets our demonstrably untrustworthy pols run it for their profit. No thank you.

In insurance, you get paid in advance and provide a service (payout, usually) at a late time. In order to maximize profit, the incentive is to provide the minimal and cheapest service and deny all claims you can get away with. The company actually has a motive not to provide you with service, so long as they can cover themselves sufficiently. Also, "spreading the cost over a larger number of people" is how insurance works; people who don't have incidents (of whatever kind the insurance covers) subsidize those who do.

I paid my Medicare levy for many years without getting much in return, then developed leukemia that eventually morphed into autoimmune haemolytic anemic leukemia a year ago, that ate the nerves in my heart along with almost all my red blood cells and bone marrow. A year later after extreme efforts I'm recovering from both the effects of the disease and six months of intensive treatment with three chemos simultaneously and a four way pacemaker fitted. Total direct cost to me $300.
The alt right approach to providing services to citizens misses the whole point that governments are not businesses. They should be there to protect and support all regardless of individual situations. Businesses quite properly produce goods and services, sell them, make a profit, then pay tax (unless they are Apple, Amazon, IKEA & co), the government then should distribute that tax sensibly.

Eyal wrote:

PeterZ wrote:A profit motive maximizes profit and reduces all other expenses. All other expenses represent resource use. By only maximizing profits in a competitive environment, services are delivered using the least amount of resources. Non-profit and government services providers don't have the same level of incentives. They have other incentives not to reduce their use of select resources. Politics play merry hell at keeping costs down in government. Padding salaries is an incentive against reducing costs in non-profits. There are others.

Competition reduces profits as other providers offer alternative services. The combination acts to reduce the amount of resources used to provide services, health services in this case, at the smallest profit margin the market will bear.

The alternatives use more resources to provide the same service. That means for a given level of resource, fewer people maybe served. There is an illusion that spreading the cost over a larger number of people makes it cheaper. It isn't. The total cost to society is higher, but lower to some individuals and higher to others. The same is true for a private system, but the private system has greater ability to provide medical services and so can help more people.

Offering financial assistance so that individuals can afford paying for privates services is what charities have been doing for centuries. That works in tandem with the profit system. I suppose governments can offer financial assistance too. That would be much better than destroying the profit system.

The US system has made competition difficult. They have regulated the means of paying for services to such a degree that makes it artificially inefficient. Prior to those changes back in the 60's and 70's, medical services were much cheaper and far more efficient. So, yeah, the US system is a complex mess that can be streamlined. Making it a public system lets our demonstrably untrustworthy pols run it for their profit. No thank you.

In insurance, you get paid in advance and provide a service (payout, usually) at a late time. In order to maximize profit, the incentive is to provide the minimal and cheapest service and deny all claims you can get away with. The company actually has a motive not to provide you with service, so long as they can cover themselves sufficiently. Also, "spreading the cost over a larger number of people" is how insurance works; people who don't have incidents (of whatever kind the insurance covers) subsidize those who do.

Agreed. Our system was moved into this pattern by policy makers. Now policy makers want even more control over health care. Now, those policy makers decide who gets service rather than private maintenance plan providers. Hell no! Better to have government acting to compel private providers to provide adequate service. Once government controls everything, who can compel government? Voters? Look at our VA system. That works swell....not!

Annachie wrote:It's incredibly simple.

America values rights.

Most western countries value responsibilities.

Socialized health care, decent health care, is a responsibility.

I agree there is a different outlook. Not going down the rabbit hole to argue what the difference is. The result is American pols will corrupt the massive entitlement true socialized healthcare represents to first benefit them and their donors. The amounts involved are much more massive than your entire GDP. That sized trough will lure the greediest pigs who will play serious hardball to control those funds.

American pols under that massive incentive will Fisk-up any system trying to make it serve their benefit in as many ways possible. Trust these pols to not do that? LOL!

Daryl wrote:I paid my Medicare levy for many years without getting much in return, then developed leukemia that eventually morphed into autoimmune haemolytic anemic leukemia a year ago, that ate the nerves in my heart along with almost all my red blood cells and bone marrow. A year later after extreme efforts I'm recovering from both the effects of the disease and six months of intensive treatment with three chemos simultaneously and a four way pacemaker fitted. Total direct cost to me $300.
The alt right approach to providing services to citizens misses the whole point that governments are not businesses. They should be there to protect and support all regardless of individual situations. Businesses quite properly produce goods and services, sell them, make a profit, then pay tax (unless they are Apple, Amazon, IKEA & co), the government then should distribute that tax sensibly.

You miss the point. Governments will use more economic resources to provide the same level of service. Depending on the government, a great deal more resources to provide that service, whether healthcare or street cleaning. A group of doctors, like in the VA, serve fewer people than that same group could serve in the private sector. Healthcare plan providers can perform their functions better in the private sector because they can be terminated if they don't work well. Terminating government union employees is nearly impossible. There are more reasons for government's lack of effiency. Some of them are admirable, but still reduce effiency.

My point is that profits and competition maximizes the services that can be delivered for any level of resources. Eliminating competition by making healthcare a government monopoly will mean we need more doctors to provide the same amount of services or fewer services from the current number of providers. How is society as a whole served by implementing a system that reduces the amount of services? It isn't.

Our benighted system has been hobbled by useless regulations that guarantees inefficiency and limited competition. Just like moneyed interests want it. Do you think those moneyed interests will be silent when designing and implementing a "government" run system? Ex-Goldman Sachs employees pretty much man the SEC. Healthcare will be no different. The healthcare industry's interests will have been seen to by bought and paid for pols. There is just too much money involved for any other outcome to manifest.

gcomeau wrote:

PeterZ wrote:A profit motive maximizes profit and reduces all other expenses. All other expenses represent resource use. By only maximizing profits in a competitive environment, services are delivered using the least amount of resources.

Etc... etc... etc...

And now here is the Econ 101 explanation of why everything you said *does not apply to health insurance*.

Let's take a look at that profit motive of which you speak in any regular marketplace for a good or service. Let's say I'm selling apples...

Do I want as a customer:

A: A person who needs truckloads of apples for their cider business.

B: Some guy who is allergic to apples.

???

Where is the profit motive going to push me to direct my apple supplying efforts? To the person who ACTUALLY NEEDS my product? Or the person who doesn't need it at all?


Now let's say I'm selling health insurance.

Do I want as a customer:

A: The patient with a really nasty brain tumor.

B: The healthy 20 year old with a low risk lifestyle.

???

Where is the profit motive going to push me to direct my health insurance supplying efforts? To the person who ACTUALLY NEEDS my product? Or the person who doesn't need it at all?



In case you haven't caught on yet, that profit motive drives efficient provision of goods and services to where they are needed in society in most markets. It drives them AWAY from where they are needed in society in a health insurance market.


Every developped nation on earth gets this, because it's really freaking obvious... to everyone except about half of America.

Yes, we get it.
The solution is to reduce the actors between the service providers and the patients as was the case prior to the 1980's.

Socialized medicine places MORE actors between a patient and service provider. Each layer of actor is motivated by incentives that are different than service providers and patients. Worse, those layers will be highly politicized. Politicized means subject to bribes.....er....lobbyists' donations. Those lobbyists will structure the system with inefficiencies that will benefit them.

At the very least in a private system, government is there to hammer egregious misconduct in the private sector. Who will hammer egregious government misconduct? Clinton now directly controls hundreds of millions in "contributions" to her now dissolved family Foundation made by people wanting access to the Sec State. Even if everything she did was legal, she embraced a conflict of interest worth a huge amount of money. Who was there to limit that conflict of interest? Certainly no one in government at the time nor democrat voters who put that administration in office. The media? LOL! Socialized healthcare involves much more money. Easily enough to keep the entire Congress bribed.

The rest of the world may get it about socialized medicine. What they don't get is just how massively corrupting control over government expenditures are because of its massive size. Now you propose to massively increase the amount those corrupt a$$hats play with? Are you INSANE?

PeterZ wrote:Yes, we get it.
Socialized medicine places MORE actors between a patient and service provider. Each layer of actor is motivated by incentives that are different than service providers and patients. Worse, those layers will be highly politicized. Politicized means subject to bribes.....er....lobbyists' donations. Those lobbyists will structure the system with inefficiencies that will benefit them.

In Ontario, if the care is covered under the provincial plan, the only person between me and my health care providers is the secretary. Do private doctors do their own scheduling in the US?

Not to mention politicians and bureaucrats have a strong preference to providing proper health care since denying coverage or excessive CYA testing are both recipes for PR troubles.