Sunday, January 27, 2008

Universal Health Care, California Edition

Reuters has a story about the struggles of the new plan for universal health care in the state of California. I did some more reading and found a Times article from the early stages of the plan's development, as well as Health Care For All, the homepage of the plan's major supporters. Here's what I've taken from my reading:

I like the idea (from Reuters) that a tax on cigarettes would help to fund this system. Smokers are more expensive from a health care perspective, and this is an easy way to ensure that they contribute their share.

I also like the idea of focusing on preventative care as a way to lower costs. Of course, I wonder about preventative care as something that could be abused, i.e. people taking doctor's visits more often than they need because it's "free."

"This component seems intended to give employers an incentive to offer health insurance, and to level the playing field between employers that do not offer insurance -- and are therefore essentially paying lower wages -- and those that do." This is from the Times article. It seems to be saying that this plan artificially raises some wages compared to others. Making workers more expensive without adding to their skill set leads to lower overall employment (some workers will get fired because these small businesses cannot afford as many workers at the higher wages), and what good is universal health care if you don't have a job or source of income?

Finally, I don't like the assertion (on Health Care For All) that planning will lead to lower costs and bureaucratic cost controls will be beneficial. Bureaucracies by nature are cost-maximizing, because any money that is unspent is lost after the next reallocation of funds, while companies that operate by profit practice cost minimization and pocket the difference. To suggest that a bureaucracy can truly keep costs at a minimum just doesn't sit well with me at all.

2 comments: said...

I wonder why employers pay for health insurance rather than just paying employees more so the employee can shop for health plans that best meet their needs. Years ago it was decided (rather arbitrarily) that employers could deduct the cost of health insurance, but individuals cannot! Thus we have the system that exists today.

Anonymous said...

Healthcare as we know it has changed substantially. The most important ways to protect our health are through diet and exercise, yet our country is facing an obesity crisis. I believe the most economcally feasible answer is to restructure our delivery of service -- to allow for regular physical examinations at hospitals and clinics, to have each individual keep his or her own health records, and to utilize more volunteer and low cost services such as weight-loss accountability groups or diabetes clinics. Currently, there is much complaining about overuse of emergency rooms, but an examination of their use shows that it is more logical than having a primary care physician who funnels people to specialists.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty