The Impossibility of Privatized Health Care

I've been meaning to write a post about why health care and the concept of a "free market" just don't mix. My economic expertise is, admittedly, limited (having taken all of one economic course, and that on environmental economics). But even with the level of understanding I do have, the situation seems pretty obvious to me. What I didn't understand is why nobody was discussing the issue in these terms.

Then I did a Google search on "free market assumptions" to make sure I was getting my story straight, and discovered at least one other person thinking along these lines. Since they've already said most of what I was going to say, I'll just add a few comments.

Re: "Perfect information." I would argue that, especially with respect to health care insurance, the producers often do as much as they can to obscure information as possible. They have discovered that they can make more money by confusing consumers and just getting them to agree to whatever is put in front of them, especially during times of crisis. They have turned exploiting this discovery into an art form.

Re: "Consumers create demand" and "Willing buyers, willing sellers." These concepts are tied in with the idea that the price point for a service settles at what the consumer is "willing to pay." In order for that to happen, said consumer must have a choice to not consume the service if the price is set above what they are "willing to pay." In the case of health care, that isn't usually an option. Or at least it shouldn't be in most cases.

Re: "Justice." The other thing that the economic concept of efficiency doesn't deal with is distribution. An economic system can be considered perfectly efficient if one guy ends up with all the benefit, so long as that is the maximum benefit available under the system. Efficiency says nothing about who realizes the benefits from the system. In the case of health care, I would hope we would consider just distribution an important part of the equation.

Finally, the referenced blog concludes that insurance is the logical solution to this problem. I don't think that goes far enough. The health care insurance industry suffers just as much from failing to meet the assumptions for a free market as the health care industry itself does. My conclusion from all of this is that health care should be considered a public good. (Call me a pinko commie if you will, but note that my reasoning is based on capitalist economic principles.)

It's not so elementary

I have a new theory for the realms of personality types and learning styles: some people are deductive thinkers, while others are inductive thinkers. I'm one of the latter. This is something I have been vaguely aware of for some time, but it just recently crystallized.

I've spent most of the past month studying for my prelims, which has mostly involved vast amounts of reading. Now, in the final stretches, I am in the process of organizing and condensing the information and ideas. This is a process I've done many times in the course of my academic career, and I have to admit I'm damned good at it.

On the other hand, in the breaks from studying, I'm currently reading a rather complex novel. For the present topic, the relevant aspect is that the narrative is woven between three characters who are somehow related to each other, but their relationship is not explained. There are a number of subtle (to me, anyway) clues, and I've been struggling to put the pieces together and make some sense of it. This is not my forte. My husband, on the other hand, would have had the whole thing figured out fifty pages ago without batting an eye.

It dawned on me last night that these two things are related. The studying process is a case of inductive reasoning. The assembling of clues is a case of deductive reasoning.

Now that I've put the pieces together, a lot of things fit into this framework. As an inductive reasoner, I am really good at sifting through vast amounts of information, identifying organizing principles, and boiling it all down. That's why I'm so good at both sides of the academic game. I can pick up just about anything by distilling it to a few basic ideas (in chem101, for example, I figured out that all I needed to know was that electrons are negative, everything else fell into place from there). I'm also really good at explaining things to other people for the same reason, which makes me a good teacher.

On the other hand, my relative weakness on the deductive side is in line with my inability to solve the mystery before Monk does. (And the accompanying frustration when Eric gives me that "I've got it!" look twenty minutes into the show.) It also explains my struggles with the research side of the PhD process. The standard scientific method is structured around deductive reasoning, using a few ideas to establish a hypothesis and designing a way to test it. That's just not my thing. So the project I'm actually working on is designed inductively. Fortunately, I happen to be in an interdisciplinary informatics program in which that sort of thing is allowed, even encouraged (or at least it should be).