July 9, 2007

"Sicko"

From my upcoming movie review in The American Conservative:


Michael Moore's comic polemical documentaries have done more for his net worth than for his political causes. He attacked greedy CEOs sending American factory jobs abroad in 1989's "Roger & Me," gun sales in 2002's "Bowling for Columbine," and President Bush's war in Iraq in 2004's "Fahrenheit 9/11," leaving him 0-for-3.

In "Sicko," he has his ripest target yet, America's ramshackle health care finance system. Having come down with lymphatic cancer in 1996, I am sympathetic to Moore's bias against for-profit health insurance. I may still be here only because I had the kind of generous insurance that few employers provide these days.

Moore's centerpiece example is a young man battling cancer (at the same age as me) whose request for an expensive bone marrow transplant was denied. He died three weeks later. Moore blames his death on insurance company greed (although that brief interval suggests his condition was hopeless). If I'd needed a bone marrow transplant, I'd have wanted the law to align incentives by requiring my employer to buy both my health and life insurance from the same firm. The insurer would then have had to choose between paying my clinic or paying my widow.

Strangely, "Sicko" misses much of our expensive but stressful system's black comedy, such as medical providers mailing out heart-attack inducing bills demanding we pay their zany list prices, apparently in the hope that an occasional senile patient might dutifully ante up rather than forward it to his insurer. For instance, after a two night hospital stay costing $2,000 (according to the rate my insurance company had already negotiated), the hospital billed me for $34,000.

Unfortunately, Moore's self-promotion, disingenuousness, and leftist ideology leave his event movies being more about Moore than about their ostensible subjects. "Sicko's" underlying goal appears to be to use our absurd health payment system to persuade us that socialism in general is superior to capitalism, that innately evil tumor on humanity. That's not a debate he's going to win, so he's distracting from the reality that medical insurance is a big exception to the rule that the profit motive works best.


My published articles are archived at iSteve.com -- Steve Sailer

24 comments:

Anonymous said...

Tieing health and life insurance is very interesting. That might really be a good idea.

tommy said...

Jane Galt on Moore's questionable comparisons between American and French and Canadian health care.

bob said...

It's not clear to me that health insurance involves any market failures which would allow an increase in efficiency via an allocation method other than markets.

The existing inefficiencies are all, as far as I can see, due to government intervention. For instance I think that the peculiar fact that it's cheaper to have one's employer buy it traces back to WWII when wage and price controls lead employers to offer non-monetary remuneration like "free" rent or "free" health care. After the war the IRS insisted that all remuneration should be taxed but for some reason made an exception for health insurance. Obviously letting someone else do your shopping doesn't lead to best pricing. Moreover some states put byzantine sets of rules on the companies forcing up premiums e.g. a middle aged healthy female has a large array of choices starting around $100/month in PA but only a few choices starting around four times as much in NY.

Free the market and then redistribute wealth or income in order to allow the poor to participate is, I think, the most efficient way to go.

Incidentally doctors have quite a good union in the form of the AMA which results in them being able to overcharge to some degree ...... another part of the same swamp that needs draining.

bob said...

It's not clear to me that health insurance involves any market failures which would allow an increase in efficiency via an allocation method other than markets.

The existing inefficiencies are all, as far as I can see, due to government intervention. For instance I think that the peculiar fact that it's cheaper to have one's employer buy it traces back to WWII when wage and price controls lead employers to offer non-monetary remuneration like "free" rent or "free" health care. After the war the IRS insisted that all remuneration should be taxed but for some reason made an exception for health insurance. Obviously letting someone else do your shopping doesn't lead to best pricing. Moreover some states put byzantine sets of rules on the companies forcing up premiums e.g. a middle aged healthy female has a large array of choices starting around $100/month in PA but only a few choices starting around four times as much in NY.

Fred said...

Steve,

There are similarities between hospitals' "list" prices for care and the full-price tuition expensive colleges charge: in both cases, schools and hospitals are trying to charge whatever the deepest-pocketed payers can bear, but they often end up selling their services for less. Also, medical inflation and tuition inflation were both spurred by unprecedented gushers of federal money.

You also may be interested in this article from last year's WSJ, about how the uninsured Amish finance their health care: How the Amish Drive Down Medical Costs

tggp said...

Steve, shouldn't you be biased in favor of our health system, since it worked for you? You are disappointed that people who are not as lucky as you might not get the same treatment, but gloss over the possibility that in another system neither of you would have gotten treatment. I haven't read the whole review, but I think you need to provide more support for your contention that the profit motive does not work for health care. Your point about linking health & life insurance is a prime example of using the profit motive!

Anonymous said...

Socialized medicine is great if you have a hangnail, a small fracture, or a cold (primary care). But if you have to see a specialist, then strict rationing comes into force. Not economic rationing (i.e., it's too personally expensive), but compulsory rationing (i.e., care is limited by law). I too had lymphoma, five years ago. Had Hillary Care been in force then, I would either be dead now, or in prison for "black market activity" along with my doctor.

The real solution is to cut costs. After all, the real problem people have with medical care is that it's so dang expensive. How to cut costs? Get rid of Medicare, Medicaid, and shut down private health insurance. You'd pay for care out of pocket, like you pay for groceries. The law of supply and demand would come rushing in like a breath of fresh air, restoring equilibrium to a currently very distorted and sick system: most prices would plummet, most quacks would evaporate, most mercernary docs would go bankrupt (good), and in general everything would find its level. Add malpractice reform, and you're back to a sane, viable profession.

Unfortunately, this medicine would cause a temporary shock so great that no one wants to swallow it. For one thing, it would mean abandoning feudalism.

essex said...

The real solution is to cut costs. After all, the real problem people have with medical care is that it's so dang expensive. How to cut costs? Get rid of Medicare, Medicaid, and shut down private health insurance. You'd pay for care out of pocket, like you pay for groceries. The law of supply and demand would come rushing in like a breath of fresh air, restoring equilibrium to a currently very distorted and sick system: most prices would plummet, most quacks would evaporate, most mercernary docs would go bankrupt (good), and in general everything would find its level.

Oh, sure. That would be a great system if all medical care were equal in quality. Alas, it is not. And that is the rock upon which the ship of libertarian dreams invariably founders ... that and political reality. Let's consider a few points:

1. As stated above, all health care is not equal. Some is better, and some is worse.

2. The reason why one particular item of health care is better than another varies: it might be because the provider or facility is better qualified, or it might be that the better care is simply newer (and more expensive) than an older method of treatment. In many cases, it really is a matter of "you get what you pay for."

3. Even given enough information, the above questions are difficult for lay people to evaluate. In fact, they are often difficult for professionals to evaluate.

4. Choosing medical care is not like choosing a brand of toilet paper. It is, literally, a matter of life and death. This is an obvious but crucial point, because it underscores that the decisions people make about health care are of paramount importance.

5. In a pay-as-you-go system, patients (I will not call them consumers ... they're not buying groceries) will often have to choose between cheaper, but possibly less effective, care and more expensive but better care. Only a person who is very rich or absurdly confident of his own good health would actually WANT a system where he would have to make a choice like that.

Americans have decided that they do not want to have financial considerations affect their decisions about health care. Unfortunately, we fall far short of that goal for everyone, but it is indeed the goal that most people support in the abstract.

By the way, this is why we will always have a mandatory pension scheme in some form or other: Because without one, some old people would starve in the streets. We do not want to be a society that allows its old people to starve in the streets. Similarly, we will never have a purely pay-as-you-go health care system because we do not want to be a society where every decision about one's health is a cost-benefit calculation.

Give it up, libertarians. I did, years ago, when I realized that, to be a libertarian on issues of social welfare, one either had to be hard-hearted to the point of cruelty or else utterly delusional.

Anonymous said...

Here's a link to Moore on CNN w/ Wolf Blitzer http://video.google.com/videoplay?docid=-1642559010121577035&q=michael+moore+wolf+blitzer&total=63&start=0&num=10&so=0&type=search&plindex=0, but you have to put up w/ five minutes of blabber until he starts to get into anything substantive about healthcare.

Anonymous said...

The US medical system is not an exception to the rule that capitalism efficiently allocates resources according to supply and demand. It kills me that most doctors I know risklessly profiting off the socialist largess of govermental carveouts see themselves as private sector entrepreneurs.

The US medical system is a tightly organized guild that effectively limits supply, drives up demand and decouples consumers from payers via socialist goverment welfare programs (paying about 50% of all medical bills I believe), govermental tax breaks and corporate insurance programs.

If people bore the true costs of their own medical care as in a true free market system you would see dramatic changes (either people would demand dramatic changes that makes medical care widely affordable or it would become a semi-luxury item like vacationing abroad once or twice a year).

Martin said...

"Give it up, libertarians. I did, years ago, when I realized that, to be a libertarian on issues of social welfare, one either had to be hard-hearted to the point of cruelty or else utterly delusional.

By essex, at 7/10/2007 10:38 AM"

Actually, many libertarians manage to be both.

essex said...

If people bore the true costs of their own medical care as in a true free market system you would see dramatic changes (either people would demand dramatic changes that makes medical care widely affordable or it would become a semi-luxury item like vacationing abroad once or twice a year).

How does one make a PET scan or bone marrow transplant "widely affordable"? These are going to be expensive - very, very expensive, in the case of BMT - procedures no matter how efficient the health-care system becomes. In any case, since even experts who've been studying the issue for years disagree about how to make medical care more affordable without compromising quality (which includes access to high-cost procedures), how would ordinary people, working on their own, ever make such "demands" work?

As for the semi-luxury option, it is politically infeasible and morally reprehensible.

Minuteman said...

Actually the real answer to the healthcare crisis is to take better care of yourself and the body the good Lord gave you. Don't eat so damn much, don't drink, take recreational drugs, court venereal diseases, jaywalk, drive instead of walking or cycling... Morality and Common Sense 101.

But Americans are like gigantic kids in a playpen: cramming their bellies with gunk and braining themselves against the bars and then screaming for Mommy (private sector chiseler or tired socialist bureaucrat, the choice is yours) to cure the self-inflicted wounds of carelessness, stupidity and self-indulgence.

Pioneer spirit required, in this as in so many aspects of our decadent, faineant "lifestyle". But self-denial might bring the Bushocracy's big business and fiat money system crashing down- wouldn't that be just too terrible?

Anonymous said...

essex said:

"Americans have decided that they do not WANT to have financial considerations affect their decisions about health care." (emphasis added)

Tell me again: who is delusional?

Americans have decided no such thing - because there is no option such as "ignoring financial considerations." If you don't attend to your financial considerations, someone else will attend to them for you. With predictable results (predictable by mental and emotional adults).

These Americans have in fact decided they "want" to evade the necessity of considering finances by giving up their autonomy to a third-party sugar daddy. Except the sugar daddy - and all his buddies - is raping them financially. Quel shock!

Consider why an MRI is so expensive. Imagine that the govt. had undertaken to socialize shoe production and poured billions into the fanciest footwear, pledging to pay unlimited sums for the shodding of the people. We would all be wearing Italian leather, since our go-between could charge us only a nominal premium while wolfing down the govt. cash difference. But when the govt. encounters those icky "financial considerations" (see, they can't really be avoided...welcome to the world of grown-ups), it would tighten the belt. With less largesse available, our go-between must charge us more for Shoe Care; premiums go up, up, up. Ultimately, shoes have to be rationed. Those darned shoes! Everyone knows they are impossibly expensive by their very nature!

If an MRI is a mystical product such that it is subject to no economic laws and does not decrease in price over time even though remaining valuable to its purchasers or potential purchasers, then it must be intrinsically different from all other technological goods, such as personal computers, calculators, computer chips, etc. Or, perhaps an MRI has not been subject to supply and demand on a free market.

There is no such thing as a free MRI or a free BLT. There is only the choice of whether YOU will worry about how to pay for it, or whether someone else will take advantage of you even to the point of total destruction.

I don't WANT to worry about how to pay my rent. Maybe I can get Section 8?

Hey, after all, would a compassionate society let me be homeless? Well, see the state of apartment quality/availability in the former Soviet Union (or where rent control is practiced).

Anonymous said...

Steve, here is a revised Comment. Could replace the previous version profitably.

*

essex said:

"Americans have decided that they do not WANT to have financial considerations affect their decisions about health care." (emphasis added)

Tell me again: who is delusional?

Americans have decided no such thing - because there is no such thing as "ignoring financial considerations." If you don't attend to your financial considerations, someone else will attend to them for you. With predictable results.

These Americans have in fact decided that they "want" to evade the necessity of considering finances, by the expedient of giving up their autonomy to a third-party sugar daddy.

The problem is that the sugar daddy and his helpers are raping them. Quel shock.

The solution is not to reform human nature, since this is impossible, but to dismantle the whole crooked structure built by personal irresponsibility.

Consider why an MRI is so expensive. Imagine that the govt. had undertaken to socialize shoe production and poured billions into the production and distribution of the fanciest footwear, pledging theoretically unlimited sums to quality-shod The People. We would be wearing Italian leather for a while, since our go-between could charge us a nominal premium while wolfing down a nice slice or kickback of the difference. But then the govt. would inevitably encounter those icky "financial considerations" that we just didn't want to consider (would a compassionate society let people go barefoot?) and we would start feeling the pinch. With less largesse available, our go-between must charge us more for Shoe Care - premiums turn into plain gouging. Moreover, the go-between limits access to his services more and more. Ultimately, shoes have to be rationed and millions risk going barefoot. THOSE DAMN SHOES. Everyone knows shoes are always impossibly expensive by their very nature!

If an MRI is a mystically complex product exempt from economic laws such that it does not decrease in cost over decades even though remaining valuable to its purchasers or potential purchasers, then it is intrinsically different from all other technological goods, such as personal computers, calculators, computer chips, etc. Or, perhaps an MRI has not been subject to supply and demand on a free market.

There is no such thing as a free MRI or a free BLT. There is only the choice of whether YOU will worry about how to pay for it, or whether someone else will take advantage of you (even to the extent of total destruction).

I don't WANT to worry about paying my rent. Maybe I can get Section 8?

Hey, after all, would a compassionate society let me be homeless? Well, see the state of apartment quality/availability in the former Soviet Union (or where rent control is practiced).

The peasants have always allowed self-described lords to rape them financially, because most peasants don't want to grow up; they insist Daddy (the king) or Mommy (Hillary) must continue to take care of them. Feudalism lives.

Anonymous said...

Essex –

Relatively rare but expensive procedures like bone marrow transplants obviously need to be covered under a shared risk insurance system. Per individual, these things are no more unaffordable to the majority like $100k’s in life and auto insurance coverage. Those that cannot afford it could be subsidized by the state much more efficiently than the current system.

The huge low-hanging fruit to make health care affordable are obvious: (1) directly tie real payments closer to the consumer’s pocketbook, (2) accept more realistic expectations of health services (e.g. not to use public funds to artificially extend the last year or so of often very low-quality life at astronomical cost and focusing on avoidance/recovery rather than expensive/relatively ineffective stopgap treatment for individuals who adopt or are susceptible to costly life-long health habits like obesity, smoking, poor diet, etc), (3) reform medical tort and malpractice, and (4) reform the medical-industrial complex that is built to limit supply, drive-up salaries, ensure ever greater government handouts/subsidies, etc.

It’s laughable that vested interests speak of our current system as free market and make a boogieman out of socialized medicine. Our current system combines the some of the worst aspects of socialism (other peoples’ money) with capitalism (strong financial incentives by nearly all parties: patients, providers, hospitals, drug companies, etc to drive up costs).

As for semi-luxury nature of medicine, why do you view medicine as magically unteathered by real-world constraints unlike any other human need or desire (food, shelter, security, justice, education, etc)? It would be a wonderful world of happy endings and moral clarity, but life is not that way. In fact, we make such “cruel” logically necessary tradeoffs all the time under our current medical system. Most 63yr old long-term alcoholics die waiting for a liver transplant (unless you happened to be a rich famous ex-Yankee outfielder). Allowing vested interests to continue abusing the system in such a wasteful way behind such deceptive rhetoric is morally reprehensible.

Anonymous said...

since even experts who've been studying the issue for years disagree about how to make medical care more affordable without compromising quality (which includes access to high-cost procedures), how would ordinary people, working on their own, ever make such "demands" work?

This is called "the market". We don't have experts deciding what the cost of any number of things should be.

Artanis said...

Most old alcoholics who, unlike ex-ballplayers with power and influence and the same initials as the storied suicidal paramours of other old ballplayers, die waiting for transplants die not for lack of money but organ availability.

Just wait until cloning organs becomes possible.

Steve Sailer said...

Okay, I get the 50's icons with "M.M." initials references ...

Anonymous said...

Free market supply and demand can't work as long as the AMA has a stranglehold on the supply of doctors. The AMA prevented the opening of new medical schools for decades, claiming that there was going to be a glut of doctors. They only stopped claiming this a few years ago when the demographic fact of an aging population (with the inevitable increase in demand for medical care) became undeniable.

Another politically incorrect factor is the increased percentage of female doctors who work fewer hours, take longer leaves of absence and retire earlier than male doctors, while requiring the same lengthy doctor's guild mandated education as their more productive male counterparts.

Anonymous said...

Artanis,

MM received one of the scarce liver transplants over many more deserving and medically justifiable canidates (e.g. younger with many more years of productive life ahead and good chance of recovery) precisely because we rationed available organs by money as well as medical need and social morality (he was rich and famous).

Note that MM didn't make it far out of Baylor Medical Center (I think) after the transplant operation. Again, a good illustration of how we currently ration medical care (and sometimes very poorly).

Artanis said...

My little "initials" remark derailed Steve from the point, which is that given a sufficient supply of organs the costs to the system of transplant surgery would be much higher. The present supply limitation also limits the cost of the program since so many die on the list. If the operation succeeds, the long term costs only start-you have antirejection drugs, monitoring, etc. which can cost millions over a long lifetime.

Mantle lived long enough after surgery to have a press conference at which he jokingly offered his old liver to a notorious well-heeled collector in the audience, or just outside. The collector said, no, but he'd buy the scalpel. I think Mantle was dead two or three weeks later, maybe.

essex said...

Delusion is imagining that human nature is what one wants it to be rather than what it is.

In the first place, to be effective, a free market requires that consumers understand what they're buying well enough to make wise, rational choices. Consumer advice for electronic equipment abounds, and yet people buy crap computers every day. How much easier is it to choose a computer than to decide whether, for example, to have surgery or treat a condition medically – especially when one can find equally expert opinions on each side?

Nevertheless, let's pretend we had a truly free-market, libertarian approach to paying for medical care. Taxes would go down. So would prices. In less demand-sensitive areas, wages would go up because employers would pass along the savings to their employees in the form of higher wages so as to attract the best and the brightest … or so the theory goes.

Even allowing that such things really would happen, the delusion arises in the overly optimistic belief that everyone will use the resulting increased income to save for his future health care needs.

One ANON poster drew an analogy to housing. That’s a false analogy because, unlike medical costs, housing is a regular expense that can be budgeted and anticipated years in advance, and everyone’s housing need is basically the same. Nevertheless, many people default on their mortgages or can't pay their rent. If they can't save and plan for such a predictable expense, how can they be expected to save for something as unpredictable as the need for medical care?

What happens to these non-savers when high-cost medical needs arise? Back when we had a self-pay health care system, they died for lack of care or relied on spotty charitable services. Thus my Social Security analogy: It's pretty clear that Americans do not have the stomach for that kind of merciless, every-man-for-himself social policy, especially when they can easily imagine themselves as the person needing help. (Welfare reform, the only major rollback of social programs in this country ever, succeeded because the average voter could not identify with long-term welfare recipients. In contrast, almost everyone knows someone who has high medical needs.)

To be politically and morally palatable, there will always have to be some sort of subsidized program to help those who cannot afford care - and, once you have a government health-care program, it's Medicare all over again. You're just arguing about how much it should cover.

The core delusion is that people really want to take care of themselves. Sure they do, until something goes wrong - then they want someone else to take of them. That’s why we’ve had two huge and growing Federal/Federally subsidized health-care programs for more than 40 years, and that’s why we have not been able to agree on any sort of reform: Because people WANT to be taken care of in this respect; they just don’t want to pay for it in a way that forces them to make painful choices. They would rather the cost appear in disguised form than in out-of-pocket expense. If this wasn’t the public’s will, we wouldn’t have the system we have.

Anonymous said...

Essex, where there is no solution, there is no problem.

The reason we're stuck where we are is your "but we can't embrace social darwinism" mentality. Stalemate.

The middle ground between freedom and communism is what we have. It isn't viable. You seem to consider it inevitable. Maybe I'm wrong.