Its time for Justin Dantonio and I to step into the ring again. Followers of this blog will recall that he and I discussed the evolutions of the music business and concert ticket industry, primarily in response to an extremely insightful article about Ticketmaster in the New Yorker. He and were primarily in agreement on several occasions---even though I felt, at times, he elided over some of the economic theories explaining the decline of the four major record labels and the enormous pricing power of Ticketmaster and LiveNation, he is generally more knowledgeable on the subject then me and his responses were very thoughtful.
But now, the gloves come off....
Once again, the impetus for this discussion is an article in the New Yorker about John Mackey, the enterprising CEO and founder of Whole Foods Market. With the debate over health care reform swirling, John Mackey wrote an op-ed in the Wall Street Journal (a quick note, the editorial page of the Wall Street Journal is considered the conservative intelligentsia of print media--low taxes, free trade, sensible regulations, and limited government)back in august briefly discussing Whole Foods's employer-based plan and then proceeded to highlight 8 reforms he thought would be crucial to controlling the escalating costs of health care. I will copy and paste them below:
• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees' Personal Wellness Accounts to spend as they choose on their own health and wellness.
Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan's costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.
• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.
• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.
• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.
• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.
• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor's visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?
• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.
• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.
These reforms perfectly echo the market-oriented ideas pushed by conservatives and classical liberals alike, and is therefore 100% endorsed by the Passing Scene Cafe. To my knowledge, the current reform efforts in both the House and the Senate do NOTHING to advance any of these ideas, let alone control costs or improve care.
For writing this article, John Mackey was absolutely savaged by the jack-booted left-wing shock troops and practically drowned in the fever swamp of the Left. Liberals all off a sudden discovered their hatred for organic foods and fruits sans pesticides and called for mass boycotts of all the Whole Foods stores. This particular piece of advice by Bill Clinton's counsel Lanny Davis is both illustrative and comical:
"Before submitting the op-ed, he showed it to Lanny Davis, the former Clinton White House special counsel, who represented Whole Foods in its antitrust battle. Davis told me that he “prodded John a little to think like a liberal,” and he reckons that the Thatcher quote was ill-advised. Still, he blames “left-wing McCarthyism” for the outrage that greeted the piece."
The overture by Lanny Davis is especially touching, isn't it? Can't you just hear him him saying, "Listen, John, I know you are doing a good job...but can't you just try and see the world like the rest of us??? Puhhhlleeaassee!!???"
Enter Justin Dantonio--Bob Dylan fanatic, North Carolina hoops enthusiast, and committed dyed-in-the-wool liberal---who has this to say about the aforementioned articles. I will comments in between his articles:
"Liked the article and like whole foods, specifically the way they treat their employees. I do think Mackey is right that a company can pursue profits and still better the lives of their employees & consumers and it is ultimately better for everyone than if the gvt steps in. Very Ayn Randian.
maximization of social/consumer welfare is often lost on large swaths of the Left and increasingly more on the Right. High five to Justin for acknowledging the connection. On on a side note, I bought Ayn Rand's Atlas Shrugged over Thanksgiving and I am not looking forward to reading 1000 pages of fiction."That said, I guess my question would be 'What should happen when the overwhelming majority of consumers do not feel like an entire industry is looking out for them?" I have no problem with megacoporations with what I feel is fair pricing and a product I want/need. If i don't want to shop there, i wont; freedom of choice. But insurance companies don't give you that choice to a large extent."
I took issue his contention that an "overwhelming majority of consumers do not feel like an entire industry is looking out for them." Polling by the Kaiser Foundation consistently shows that satisfaction with one's own health care is north of 80 %---and that includes two thirds of women. Even Ezra Klein, a liberal blogger over at the American Prospec, acknowledges this, and correctly highlights that the prospects for reform are quite dim as long as people generally regard their insurance coverage as sufficient.
After asking Justin to substantiate his claim, he pointed me to another poll which claims that 3 out of 4 people are dissatisfied with the overall cost of health care in this country. In fact, the poll results are slightly nuanced :
More than eight in 10 Americans questioned in a CNN/Opinion Research Corp. survey released Thursday said they're satisfied with the quality of health care they receive.
And nearly three out of four said they're happy with their overall health care coverage.
But satisfaction drops to 52 percent when it comes to the amount people pay for their health care, and more than three out of four are dissatisfied with the total cost of health care in the United States.
Note that over half of poll responders say that they are satisfied with what they pay for health. That 48% of people who are either dissatisfied or unsure. Furthermore, I hypothesized that that particular question polls highly because many folks are being fed a narrative by politicians and the mainstream media that there is a looming crisis when it comes to health care costs and the time for reform is now. He responded that an increased level of attention to the issue cannot account for all 75 % of that poll result. This might be a case where he and I are both right.
Look i don't think the health care thing has gone well AT ALL. Its a mess and its going to create more problems than solutions (my premiums will surely be going up quite a bit).
What he says is spot on. Little does he know that he would get vilified by his fellow travellers for acknowledging such an observation.
All I am saying is that in all the research I have done on insurance for my own personal benefit, I cant get what I feel is a fair shake and it doesn't seem like there are other companies I can turn to. The status quo was not adequate and hasn't been for some time (Nixon gave a big speech in the 70s about the problems w/ the insurance industry so its been on the radar for decades). That said, the proposed solution will not be adequate either (and yes, potentially worse)
I think all of John Mackey's reform ideas would help. The only phenomena that throughout history, has helped to lower costs and put downward pressure on prices over time are free markets, competition, and innovation. Despite what many people think, the private insurance market in this country is NOT an unfettered free market. It is a highly regulated market with price controls, 50 different sets of rules for each state, and numerous barriers to enter the market. The solutions seem obvious to me and to those endangered species of liberals who mistrust government.
To sum it up: We need outside the box thinkers. The things Republicans want and Democrats want are so by-the-book Republican and Democrat that this mess almost seemed inevitable in a depressing sort of way. Unfortunately outside the box thinkers have a tough time getting into and/or wanting to be in the government. So very Plato via Philosopher-Kings.
I'm not entirely sure I agree with all of this. Most of the reforms posted above are reforms that the right-wing intelligentsia has been touting for years. I consider them to be 'by-the-book Republican.' I don't know of any ideas that are MORE 'Republican' than these. Also, there exists some variation within the Democratic party about what the future of the health care industry should look like. Some Democrats want a single-payer system. The Clintons wanted "managed competition" between four big insurers. Others want a private market but highly regulated and micromanaged to suit their ideals--a market replete with individual mandates and compulsory enrollment.
As usual, Justin went over my head very quickly with the Greek philosophy reference.
Thoughts please....
"The things Republicans want and Democrats want are so by-the-book Republican and Democrat that this mess almost seemed inevitable in a depressing sort of way. Unfortunately outside the box thinkers have a tough time getting into and/or wanting to be in the government."
ReplyDeleteForget that headache that is the healthcare debate, let's discuss the migraine that is the inability to create a new political party in America.