http://www.youtube.com/watch?v=imfuiaeg820.
http://www.youtube.com/watch?v=rkjbvfpjpje.
http://www.youtube.com/watch?v=iezhj13pun4.
cedars,
Please don't think I am nit-picking grammar, it is not my intent at all. I love your articles and your site. But here is a tiny mistake, I believe :)
In your article you state: " Pierce raised expectations at the start of the meeting by indicating that their would “absolutely” be “new light,” or “new bible truths” revealed. In the end there was nothing of the sort." (4th paragraph). I think the bold word should be "there" not "their".
MMM
they seem determined to undermine the us democracy and shut the government down hurting employees and veterans.. what a despicable bunch, hope they get their asses kicked for what they are doing..
DogGone,
Let me start out my addressing the very last part of your post. You said:
(Take all the time you need. My wife is expecting in the spring, so I’ll be in your boat shortly, if everything goes well!)
Congratulations! We just had a baby girl. I suppose it’s too early for you to know what you might be having? I do know you’ll be having some sleep depravation . Now, back to health care:
Always welcome a respectful discussion! I'm not trained in economics, just an armchair thinker. I'm fully prepared to be embarrassed by anything I write! In fact, I look forward to it.
Same here. I don’t feel it’s hard to understand the principles of economics – unless you are a Keynesian. Then for some reason, the world is upside down.
You are absolutely correct, I erred in comparing one component of "food", the tomatoes, with the entire category of "health care". Excellent catch and appreciate your pointing it out.
Ha, I think you caught yourself there. I don’t think I pointed that out, and if I did, it was by accident. What I was going for in reference to your comment: “Food DOES normally conform to law of demand.” It left me thinking what you thought “normally” meant? And why “normally” doesn’t apply to healthcare? Let me try to illustrate. Normally my illustrations don’t work out very well, but here goes:
Imagine a town in the desert. A man walking through the desert stumbles upon this town, thirsty. The town has water. One of the townsfolk explains that all he has to do to get water is go to the saloon and buy some. He goes there and finds a man with a lot of water, selling it to everyone in the town for a lot of money. It costs more to get water on a monthly basis than it does to own a house in this town. The man is dazed, but continues to pay to get his water. The man with water can raise his price all he wants (price does come into inelastic demand calculations, see below). The townsfolk need the water, and demand will stay the same. Now – the question: Should he ask why is it this man has a monopoly on water, which produces the high price? Or should he accept that water is intrinsically a unique market because of inelastic demand? Would he think it is yet unique if he learned that nobody else could drill a well in this town because the current well owner lobbied the town legislature and secured for himself exclusive well-drilling rights?
That leads me back to the original question: why is the price of healthcare so high? Is it really the case that it is a special market, or does it just look that way if you ignore the government’s involvement?
You are also correct that it is important to clarify what portion of "health care" we are talking about. For the purposes of this discussion, I suggest we start with "essential medical services" - ER, scheduled surgery, prescriptions, primary physicians, etc. That may be too broad, but do you think it is useful start?
I'll wait for your larger reply to fully comment. To help inform your reply consider that the issue of inelastic demand is related not to the quantity and availability of choices and competitors but to the flexibility of the demand. That is, it is not about the ability to make decisions on price (name brand drug or generic drug) but on the ability to reduce the quantity of the demand (drug, less drug, no drug).
Let me make sure I understand what you mean by inelastic demand. It was my understanding that elasticity is a measure of how demand for a good would change in relation to its price. The Wiki definition is here: http://en.wikipedia.org/wiki/Price_elasticity_of_demand.
What I gather from that definition is that if demand is “elastic”, it means that the quantity demanded of a good or service changes more than the price does. For example, if the price for a good or service drops 10%, but the demand rises 80%, then it’s an “elastic” demand. A “unit” demand would be a 1-to-1 scenario: If the price fell 10%, the demand would go up 10%. “Inelastic” demand would reference something where the demand doesn’t change so much in relation to price. For example, the price of a good falls 10%, but demand only rises 1%. Or if the price increases 50%, but the demand only decreases 1%. When demand doesn’t change AT ALL in relation to price, it’s perfectly inelastic.
The only situation I can think of where demand is highly inelastic (not even perfectly, just highly) is where there is a monopoly on a good or service. Like my previous illustration: the well owner has the monopoly. But should it be that way? If we see a seemingly inelastic demand scenario, like cancer treatments, do we assume it MUST be that way, or perhaps does that drug company have special privileges?
The money spent on healthcare in America, I think, does have a positive supply side effect for profitable elective surgeries. Wouldn't it be interesting to see two hospitals side by side compete for ER patients! Now, that might produce some interesting outcomes!
Yes it would indeed.
I'm very interested in having you expand on this: "Why is the cost so high now? If you say it is because of inelastic demand, I would say you are right only because government subsidies necessarily discourage people from the activities that would make it elastic." I think there may be some gread discussion behind that statement because it gets at incentives, i.e. economics, which I love talking about.
Ha, then you might already know what I was going for. If you separate the consumer from the cost for decades, it might very well look like the demand is inelastic (prices are going crazy, but people keep going to the doctor). But if you attach the user to the cost, well, then it changes. Here is a good example, a personal one. My wife just had a baby. When the pregnancy progressed into the third trimester, my wife started experiencing issues with her back. We have a high deductible plan, bascically a catastrophic plan. Our doctor referred us to a chiropractor that specializes in pregnant women. Now, most insurance companies view anything during pregnancy as essential medical. So we went there for the initial meeting/consult and found out a) that the meeting itself was $200, and b) we were getting signed up for 3 appointments per week for 8 weeks, at a cost of $100 per appointment. I objected on the cost, and the chiro looked at me with the strangest look. She mentioned that the insurance company would pick it up and the cost would be minimal. When I told her we were on a high deductible plan, she said that we would have to pick up the cost. So, we left. We found a chiro that wasn't a specialist in pregnant women, so he was expecting it to all be elective (out of pocket) anway. He had the special table and know-how needed to fix my wife's back. It cost us a total of $20 a visit, and the initial meeting was free. Yet! The first chiro had a room packed full or pregnant women. All of them *needed* the care, all of them were going to a doctor with massive prices, but it didn't change their behavior. Why? They weren't paying for it. The price difference was huge, and it shows how much removing people from the cost will screw up the pricing system.
Now, I've been on the defensive for this post. In summary, I do not think the "inelastic demand" argument works against the free market. BUT, I would say it could work against our current chrony capitalists system, of which the medical industry is a big part. I can see why people might think that healthcare *NEEDS* to be socialzied, but that is not so. If it is the socialization of an industry over the long term that caused the undesirable effects, why go for more of it? Is that not like trying to cure a poisoned patient with more poison?
In fact, the more socialized you get, the more the price from the providers will rise - UNLESS you price fix by law and ration care.
In a previous post you said:
"I don't argue with anyone's criticism of the ACA. After following this thread, I'm not informed enough to say it is the answer for my American cousins. However, although I'm free enterprise in many ways, I'll argue till I'm blue for universal healthcare (single payer, private delivery, public delivery, insurance exchanges, and single insurer... whatever gets it done)."
My question is why? You can see the cause and effect, and you can see it will cause a glut in services and an increase in price. The last thing we want then is price fixing, which will mean shortages. When that occurs, as I stated in the first post, everyone will be covered, but not cared for. Where is the moral thrust in that?
MMM
they seem determined to undermine the us democracy and shut the government down hurting employees and veterans.. what a despicable bunch, hope they get their asses kicked for what they are doing..
jgnat,
Let me watch the video, then I'll respond.
MMM
they seem determined to undermine the us democracy and shut the government down hurting employees and veterans.. what a despicable bunch, hope they get their asses kicked for what they are doing..
DogGone,
All good comments. I can tell I may enjoy talking this over with you. I do have some responses to them, especially your point about inelastic demand. I can't flesh it out in great detail right now because I have a newborn in the house (just a few days old), and its tough to timeslice. But to give you a preview of what I plan on writing:
When you say food is not inelastic because of competitors, are you saying then that I can't seek competitors for cancer treatment? Perhaps not for life/death emergencies (after all, I just need to get to the hospital now!!!) - but even then there are market forces that help reduce the cost, and these forced have been neutralized by goverment involvement. Let's be clear, and try to not obfuscate: What are we talking about when we say "healthcare"? When someone says, and rightly so, "you don't have to pay for emergency room care now", the normal response is, "well, what about non-emergency care? Well what is it? You can apply the inelastic argument to emergency care (and there are some points on this I wish to make later - hopefully tonight), but you can't on non-emergency care. For those services, people can and will discriminate on price. But that brings me back to my first point: Why is the cost so high now? If you say it is because of inelastic demand, I would say you are right only because government subsidies necessarily discourage people from the activities that would make it elastic.
MMM
they seem determined to undermine the us democracy and shut the government down hurting employees and veterans.. what a despicable bunch, hope they get their asses kicked for what they are doing..
I would say, it is essential to "life" as in "life, liberty, and the pursuit of happiness".
And yet, so is food. Should we socialize that industry too? Perhaps housing as well?
Hate to break this to you, but it already is rationed. It always has been and always will be.
Oh no, I am not arguing that at all. Even in a free market, good and services are rationed. It must necessarily be so because all goods and services are scarce. But that is exactly the reason why markets work. Markets work the best when there is a limited amount of something, and the price of any good or service contains a lot of information, among which is supply. Consumers adjust their behavoir on that, as do suppliers.
The problem is that central planners must necessarily do a poor job at rationing because they lack the information coming from the price. Don't you find it odd that these days central planning of any industry seeks to mimic the market?
Let me be very very clear here: I DO NOT LIKE OUR CURRENT HEALTH CARE SYSTEM, AND I AM NOT ADVOCATING IT. But the problems we have now can be traced back to the government getting involved with the market. We simply do not have a free market now. But we should. I am advocating that.
MMM
they seem determined to undermine the us democracy and shut the government down hurting employees and veterans.. what a despicable bunch, hope they get their asses kicked for what they are doing..
Just a side note to jgnat's comment:
Marvin, Alberta is represented by a single health care group. That's many, many hospitals. A corporation of this size can demand bulk discounts. The fractured system in the US can't.
This is not true. Private companies are started as "associations" for Hospitals. I know this because I develop software for these associations. There are actually many different associations, all competeing with each other. Their purpose is simple - pool the supplies orders for their members and get a discount for all. Hospitals are free to leave and join competing associations, or join multiple associations, to get the best price. Because the associations compete, it tends to drive down supply costs even further - probably much more so that Alberta's single care health care group.
But as you note above jgnat - "... American hospital costs should come down to be comparable with other developed countries." That is the real issue. Why are costs so high here? And how do you lower the cost of the actual care without price fixing or rationing?
MMM
they seem determined to undermine the us democracy and shut the government down hurting employees and veterans.. what a despicable bunch, hope they get their asses kicked for what they are doing..
This is the problem with 'mercans ... you just don't get that medicine needs to be socialized and you object to it simply because you've been indictrinated that "socialism is evil". For healthcare though, it's different and needs to be so.
With everything said on this thread, I think the above statement cuts to the core of it. Those that have fought and continue to fight against the ACA do not agree, with good reason, that medicine “needs to be socialized”. And the reasons stem from much more than a characterization of socialism as “evil”.
What exactly is it about the healthcare market that makes it a unique market? I would say that there is nothing unique about it at all – but perhaps it may seem so now only after years/decades of government modification. Absent the modifications, the market would lower the cost of the care itself – allowing greater access and better care.
The ACA, however, can’t bring down the cost of the actual care. It may seek to find a way to pay for it in behalf of consumers, but that won’t solve the real issue – overpriced care. People, no matter how much faith you have in them, will not spend other people’s money as carefully as they spend their own. And they will never ration themselves in regards to free goods and services. The consumers NEED to be connected with the cost of the services or else the prices will continue to rise (the providers have no reason to lower the price). As prices rise, the benefactor will start to cry uncle and demand the prices to be lowered by law. Or the care will have to be rationed.
No body argues with the noble intentions of the ACA. But the moral thrust of those intentions seems to evaporate when the actual effects of the law are almost exactly the opposite of what was intended, even if that takes 10 or 20 years to play out. Everyone is covered, but there is less care for all, and the quality will go down too.
MMM
this is a really great video about how the original pronunciation of a language, during the time a play was written and performed, can affect the feeling and meaning.
i thought it was interesting.
enjoy!.
This is a really great video about how the original pronunciation of a language, during the time a play was written and performed, can affect the feeling and meaning. I thought it was interesting. Enjoy!
MMM
i think they know what they don't believe in, like no blood, no hellfire, no trinity....but they really couldn't explain what their beliefs are and why they believe as they do.
do you agree?
Minimus: "I think they know what they DON'T believe in, like no blood, no hellfire, no trinity....but they really couldn't explain what their beliefs are and WHY they believe as they do. Do you agree?"
Most do not. By most I mean about 98%. The other 2% are the COs, DOs, Branch people (not all), etc. Being an elder isn't even a good guarantee that they actually know the up-to-date details of the doctrine.
i decided, for whatever reason, to go onto the goolge ngrams viewer tonight.
for those of you who have not played with it, its actually quite fun.
google has created a search for word seqences through hundreds of years of literature.
LG3 said: "A person cannot help but wonder whether the Witnesses taking it up has contributed to its decline elsewhere. Surely that must be the case, even if this chart doesn't indicate that real well."
Julia Orwell said: " People didn't want to use it because they didn't want others to think they were JWs, ie nutcases..."
Lakia said: " Perhaps the reaction to JWs is the reason?"
Witness 007 said: " The name is now associated with the Witnesses. How many non Witness buildings have the name now....none."
I agree with all of you. The name is associated with the WT, and everything that goes with it. For the atheist/agnostic, its associated with those nutjobs that come to your door on a Saturday. For mainstream Christians, the name is associated with that religion that bastarizes the entire NT.
LG3 said: " Now you know what a Witness would say about this, right? 'This is exactly why Jehovah directed his true followers to take it up and make it known!'"
Exactly! - to which I would repond with: "It seems it was doing alright until your organization came along and associated the name with being a nutjob. So the net effect is the name of Jehovah is known less than it might have been if the WT never really existed." :)
MMM
