Big risks.

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36 Responses to Big risks.

  1. Zifnab says:

    But the alternative is SOCIA-MA-LISM!!!


  2. Alex says:

    Because capitalism values money over everything else (like health, safety and well being of people and the environment)?

  3. ondigo says:

    Yeah, ’cause unhealthy, unsafe and unwell people make the best customers, don’t ya know.

    Don’t you think it would be possible to reduce the cost of individual insurance policies using the market and without the gov’t taking over 1/7th of the economy?

  4. Mike says:

    @ondigo – apparently not. The Reagan/Bush/Bush eras have proved that. The liberals didn’t created this mess, conservative greed did.

  5. ondigo says:

    There’s plenty of blame to go around. Gov’t (Rs and Ds) created part of the problem by massively twisting the demand (Medicare, Medicaid, and tying private insurance to employment) while also restricting the supply (paying 40 cents on the dollar for services under Medicare/Medicaid discourages increase in performing services). Meanwhile, pharma companies charge **huge** amounts for medicines that cost pennies to make, using the excuse of R&D $$$ needed to bring good medicines to market. (And the FDA’s thumbprint in that process is also a topic for discussion.)

    My point is that we should be able to solve the insurance problem without throwing out the baby with the bathwater. We don’t want the gov’t to ration healthcare (do we?) and we don’t want to stifle the innovation that makes American medicine the leader in improved health care techniques.

  6. Chaz says:

    @ondigo: Of course unhealthy, unsafe and unwell people don’t make the best customers. However, in a purely capitalist sense, the people who can’t afford health care aren’t the “target demographic”. It’d be just as good, by capitalist dogma, to allow the poor to starve or die of curable diseases, freeing up the resources they’re selfishly grabbing at for use by the worthy — those with the money.

    In a system of pure capitalism, we’d eliminate ALL government-aid programs; that’s the real problem with the system as it is. We try to run the economy based on a system that’s intrinsically opposed to our “human side”, a system which considers caring for others to be a weakness that we should exploit, not a virtue to be extolled.

  7. (x, why?) says:

    Anyone without healthcare would be the target demographic. Unlike PCs and digital cameras and iPods where you could have more than one, or replace an old one, you either have healthcare or you don’t. You can’t get your customers to purchase a second policy. Plus, sooner or later, you’re customers will die off.

    You always need to expand your market to survive.

  8. ondigo says:

    @chaz: I think your characterization of capitalism is a bit off. It isn’t that we’re trying to run an economy ignoring our human side. What we’re trying to do is balance competing demands, and trying to do so without faceless bureaucrats telling us what we can and cannot have. During the 20th century, which system killed more people living under it: capitalism or communism? Control-driven economies inevitably wind up denying people the chance to make choices on their own because the politicians/bureaucrats “know better”.

    I’m not opposed to health insurance reform. But I fear we are being presented with a classic case of the Politicians’ Syllogism: “Something must be done. **This** is something. Therefore, we must do it.” (See PATRIOT Act, TARP, etc.)

  9. ISammael says:

    What concerns me is no one seems to have read it. First of all, anyone who opts for private insurance instead of buying into this will be charged a tax fee of $1000 per year.

    Furthermore, when this becomes effective, after January 1st, anyone who changes their job or (and this is what makes this pertinent to today’s Indexed card) wants to start their own business, they will not have the option of trying to find the cheapest or best health insurance, they will be forced to take whatever non-competitive dregs are left over in the government.

    I don’t know why people think this is such a fantastic idea. It hasn’t worked in France, it hasn’t worked in England, and it hasn’t worked in Canada, and their arguments for running the program sounded an awful lot like what we’re being fed today. We’re doomed to repeat their failures because no one is willing to admit the few can’t afford to pay for the all. It’s class warfare, plain and simple.

  10. Eric Meyer says:

    I keep making this point, and it keeps falling on deaf ears. I’m an entrepreneur myself, and so far a fairly successful one, but if my wife didn’t have insurance through her job I’d probably have to get a corporate job just for the health coverage.

    I’m also always fascinated by people who say “It hasn’t worked in France, it hasn’t worked in England, and it hasn’t worked in Canada”– because every Englishman, Frenchman, and Canadian I talk to says that for all they complain about their systems, they would never, ever want to be under the US system. The Americans I’ve talked to who have had experience with those countries’ systems (as well as our own) wish we had what they have. I know very smart people who won’t move to the US solely due to the health care situation here as compared to there. And yes, several of those have had job offers with very nice benefit packages. When they asked themselves what might happen if the company folded or had to lay them off, they balked.

    That said, I too am concerned that we’re facing a “Politicians’ Syllogism”, but I’m not sure what else we should expect…

  11. Kevin says:

    This is not only accurate, but ironic.

    Good on you, Jessica. Keep ’em coming.

  12. lefthomerow says:

    Woah! Why hasn’t this descended into childish name-calling? This is the INTERNET, people!

  13. Dour Old Man says:

    What a load of hooey. I’m in my late 40’s now, and am out of the game. However, I can say that when I was in the midst of startup euphoria (Silicon Valley in the 70’s and 80’s), I didn’t give a rats ass for health care, and certainly never paid for it. Why?

    Because I WAS YOUNG! If one chooses to have health insurance (a wise choice, without a doubt), one should factor in the cost.

    As far as anecdotal reports of English, Canadians, etc that don’t want our system — possibly, but Mr Meyer and I both know and/or know of a huge number of English, Canadians etc that come to this country strictly for health care (knees, hips, stents, bypasses, et al). Without a wait. With availability determined by ability to pay.

  14. Adrienne says:

    Exactly what I’ve been saying all along!

    You could also replace “entrepeneurs” with “Business’s ability to compete in an international market”.

    to ISammael, I think all the countries you’ve listed proove they DO work! Are we living on the same planet here?

  15. Briana says:

    I think it’s becoming clear that individuals, corporations, nor the government can afford health care, so why doesn’t anybody mention the elephant in the room? (Hint: Merck made $24.5 billion dollars in revenue in 2008).

  16. Mabande says:

    Zifnab’s comment cracked me up :D

    Dour Old Man – Of course there’ll be people from England et al coming over to use american private practice doctors: the systems allows them to since they’ve got the money. If they do not have the money, they won’t get the luxury treatment in the U.S.

    But what do I know, I live in “socialist” Sweden (sorry for my crappy english by the way) where it’s a nominal charge of 200kr (about $25) for a scheduled night in the hospital (i.e. surgery) or a meeting with a doctor ;)

  17. Mabande says:

    Briana – Seems to me that Sweden’s doing pretty well with the state-financed health care (although the financial crisis and the current government actively tries to dismantle it) :)

  18. Jack Vermicelli says:

    I wouldn’t be so dismissive of your out-of-pocket costs, Mabande. I don’t have any figures at hand, but don’t citizens of Scandinavian countries tend to pay about half of their incomes in taxes? The government extracting funds from the people to pay for services that the people and a free market could provide for themselves is far from transparent, and as usage versus taxation are unlikely to show a perfect correlation, not at all fair either.

    To paraphrase Ben Franklin, I’d rather have freedom (and choice!) than security.

  19. Louis says:

    Why do people complain that they don’t want Faceless Bureaucrats, i.e.Government officials, making their healthcare decisions, but are perfectly willing to let Faceless Bureaucrats, i.e.Corporate boardroom, make their healthcare decisions?

  20. Mike says:

    Amen Louis, Amen.

  21. don says:

    It is important to understand that the system in England and Canada is NOT like the system in France. The English and French have nationalized health CARE — that is, the governments run the hospitals. France has public health INSURANCE — that is, the government pays for the care, but the doctors and hospitals are privately owned.

    I am on the board for a French immersion school, and the ridiculous poor quality of and high cost of American health care is the single biggest complaint of the French teachers coming here. I know a number of Americans living in France and they all condemn American health care.

    The plan for the US isn’t final, but if there’s a public option it will provide government run INSURANCE, and it will compete with the private insurance. If all the conservatives are right, then clearly the private insurance will outcompete the bureaucratic government program, and they’ll be proven right for relatively little cost.

    But the reason they’re protesting so loudly is that they know they’re full of crap. The reason the government currently insures the elderly is that the private insurance companies refuse too: it costs too much. Private insurance is about turning a profit, which is accomplished by, as much as possible, only insuring healthy people. The sick people are pushed into the streets.

    Finally, as a current entrepreneur who lived through the tech bubble of the 90’s, I can tell you that hiring today is not like hiring then. It’s no longer the case that adding an “e” or an “i” before your name is sufficient for massive valuations and champagne baths. Offering health insurance actually matters, and is very expensive.

    Jessica’s chart is spot on.

  22. Anthony says:

    No, you can’t have healthy, happy customers in capitalism. The problem is that the system converges on products that are terrible for the consumer. The consumer always wants more. The company wants more money. The solutions is ALWAYS to make a cheaper product. This solves both problems, but devolves the product. Companies are not people in a capitalistic system. Their one overriding goal is money. Jessica is right.

  23. CR says:

    @Dour old man: One can choose to have health insurance, but one doesn’t necessarily get to choose whether they require health care. My prescriptions alone would take up a third of my income without insurance. I don’t choose to have health insurance, my health necessitates it. I’m sorry you’re old and grumpy, but I’ll bet my prescriptions (which keep me alive) that you have friends and likely family who are in a similar situation.

    But you can kill them off if you like when they get poor.

  24. Abstainee says:

    Here’s a great system, Germany

    Compared to the U.S., Germany with a population about 1/3 of the U.S.’ has an infant mortality rate which is better by 35% than the U.S. with life expectancies better by 1.1% and all that at a cost of just 58% what we pay per capita. In 1883, Germany was the first country to establish the foundations of a national health insurance system and has since gradually expanded coverage to over 92% of the population.

    Everyone in Germany is eligible for health insurance, and individuals above a determined income level have the right to obtain private coverage. The German health care system is predominantly characterized by Sickness Insurance Funds (SIF’s), which are funded by compulsory payroll contributions (14% of wage), equally shared by employers and employees. SIF’s cover 92% of the population and account for 81% of health expenditures. The rest of the population (the affluent, self-employed, and civil servants) is covered by private insurance, which is based on voluntary, individual contributions. Private insurance accounts for 8% of health expenditures.

    You can still have private insurance if you have money (really only people with money get good care in the US anyways) and everybody is covered.

  25. TBS says:

    …hmm, the higher “the cost of individual insurance policy”, the fewer “entrepreneurs”? WTF? I’m still not sure if I am too dumb to know what issue you are talking about, or you are too dumb to know how graphs work.

  26. Jim says:

    I find it ironic that the right to life in this country is tied to another debate and good health is not a function of liberty but of wealth. The greatest discovery in human health was not a single cure or drug but the concept that by protecting the poorest of a society you protect the wealthiest. If epidemics are stopped simply by providing clean drinking water and basic health care to those who cannot otherwise afford it then the country will be able to maintain a population and production rates. Who will do the hard manual labor if they’re all dying in the streets? Wealth becomes meaningless if there is no one beneath your wealth bracket.

    But of course, try telling anyone on the street that insurance is a mob-style racket and you’ll be laughed at instantly. Insurance as we have it today is a community-based payment option for accidents. The more people paying into the option the more claims can be handled. What is the government? Why it’s a community-based payment option. Surprise! Trade one mindless corporate drone for one mindless bureaucrat.

  27. Bret says:

    For the most part, a very cool give and take here. I’ve read better insights here on this topic than in any of the periodicals or editorials in recent memory. Everybody reward yourselves with something from the fridge.

  28. Tell me about it!

    Me? Self employed. Husband? Self employed with chronic pre-existing condition. Yeah. Effing ouch. Been holding breath for health insurance change since Billary’s 100 day promise.

    And we wonder why people have no savings?


  29. ondigo says:

    I particularly liked @Don’s explanation about the difference between the British and French systems. Given a choice between lousy alternatives, then I’ll go for the French one.

    @Louis: the difference between faceless govt bureaucrats and faceless corporate bureaucrats is that I can change insurance companies. I’m pretty well stuck with the govt (unless I emigrate). And changing partisan control changes nothing (as Obama, sadly, is finding out). Bureaucracies are forever.

    @Jim: You’re onto something in your description of insurance. But health insurance (HI) isn’t like auto insurance (AI). In the US, we use HI to cover the equivalent of an oil change. But part of the difference is no one’s long-term health is imperiled if AI refuses to pay for oil changes; it can be if HI won’t pay for ongoing medication. And whether the reformers like to believe it or not, there **will** be some form of rationing under a govt-run insurance or care system. (The current system isn’t so much rationing as based on ability to pay, which is different but the end effect is much the same if you’re the one who can’t get treated.)

    I’m not sure what the optimum solution here is. If govt-provided HI only were to cover only critical, life-threatening conditions (cancer, heart, etc.) then many people will not take actions that might preclude such problems. But if govt HI covers **everything**, no one has any incentive to limit their demands on the system. This leads to both explosive costs and draconian rationing by bureaucrats. I suppose I prefer the former option, because then at least people have the option of getting additional coverage for “oil change”-type treatments or can pay for them out of pocket.

  30. Marc André says:

    “During the 20th century, which system killed more people living under it: capitalism or communism?”
    Seeing as millions of children die every years of preventable diseases that could easily be eradicated if pharmaceutical and other companies weren’t so capitalist, it is fair to that that capitalism killed more people around the world. Remember also that most dictatorships are capitalist rather than communist. For example, more people died, every year in Chile, under Pinochet than Allende.

    As for State-sponsored health care, here’s a British take on the subject:

  31. J-Dub says:

    Exert from “Increase Your Financial IQ” by Robert Kiyosaki:

    “Just so you know, I am not Republican or Democrat, conservative or liberal, socialist or capitalist. When asked, I simply reply that I am all of the above. For example, as a capitalist, I want to make a lot of money and pay as little in taxes as possible. As a socialist, I make tax-deductible donations to charities and worthy causes, and I want my taxes to provide for a better society and care for those who truly cannot care for themselves.

    Many people believe that Republicans are better than Democrats when it comes to money. The facts do no support their belief. Republicans say, ‘Democrats tax and spend.’ Republicans, on the other hand, borrow and spend. The net result, regardless of party, is increasing long-term national debt, a debt that will be passed on to future generations in the form of higher taxes. This is a sign of low financial IQ.

    It was Democratic presidents Roosevelt and Johnson who are credited with creating Social Security and Medicare, two of the most expensive and potentially disastrous programs in world history.

    America was the world’s biggest creditor nation under Repbulican president Dwight D. Eisenhower. We were a rich nation. When Republican Richard Nixon became president, however, the rules of money changed, and the wealth of the U.S. began to change. As president, Nixon took us off the gold standard in 1971. This converted the dollar from money to a currency.

    Nixon allowed the U.S. government to print as much money as necessary to solved our money problems. This is the same as a person writing checks without having money in the bank. If we did what the government does today, we would be in jail. One of the reasons for the growing gap between the rich and everyone else is that most people are still working by the old rules of money – the old capitalism. After 1971, the new rules of money took over. The rich became richer and the poor and middle class worked harder trying to keep from falling between the cracks.

    In 1980, Republican president Reagan gave us supply-side economics, aka ‘voodoo economics’. The new economic theories promoted by the Great Communicator Reagan, an actor not an economist, were the illusion that we could cut taxes and continue to pay the government’s bills by borrowing money. This is the same as taking a cut in pay and using credit cards to pay bills.

    When Thomas Gale Moore, then a member of President Reagan’s Council of Economic Advisors, noticed that the United States was crossing the creditor/debtor threshold in the mid-1980’s, he said not to worry. ‘We can pay off anybody by running a press.’ Call me crazy, but usually that’s called counterfeiting.

    Because of the 1971 change in our money, and Reagan’s supply-side economics, the national debt of the U.S. exploded. By the end of Reagan’s reign, the federal debt was $2.6 trillion.

    President Reagan’s vice president, the first George Bush, realizing the national debt was exploding due to the loss of revenue from Reagan’s tax cuts, ran for president promising, ‘Read my lips, no new taxes.’ After he was elected, he raised taxes and was not reelected.

    Then President Clinton, a Democrat, entered the office. After having a little trouble with his zipper, he left office claiming to have balanced the budget and not increased the national debt. Of course, just as he lied about his sex life, he lied about balancing the budget. He ‘balanced’ the budget by counting tax dollars for Social Security and Medicare as income. Instead of the money going into the Social Security trust fund, he spent it. That would be like him taking money from his daughter’s college fund to buy a new dress for Monica.

    Clinton, however, did speak one truth during his term of office. He admitted that there was no such thing as a Social Security trust fund. During his presidency, Medicare began to operate in the red, meaning more money was going out than coming in. Soon, Social Security will be in the same predicament, as 78 million baby boomers begin to retire in 2008.

    Enter the second President Bush. Uniting the world after 9/11, he then used his popularity to wage war against Iraq, on unsubstantiated claims. Today, he is one of the most unpopular presidents in history. Not only was the war a disaster, but in order to prevent a disaster in the economy, the Federal Reserve Bank cut interest rates and flooded the world with funny money under his watch. After just five years in office, President Bush has borrowed more money than all other U.S. presidents in history combined. The current subprime crisis is the fruit of his economic policies.

    All of this is to say it doesn’t matter which party is elected into office. If it’s Democrats, they will probably tax and spend. If it’s Republicans, they will probably borrow and spend. The net result is the same: greater debt, bigger financial problems, and higher taxes. All funded by taking as much of YOUR money as possible.

  32. Jeff says:

    As an entrepreneur and a litigation attorney I find it disturbing that we refuse to assign responsibility for a big part of this problem- obesity. ELI Lilly is entitled to make as much as they can on drugs. That’s American capitalism. If it were Russia they’d be shaken down by the govt as some in this thread think is appropriate. Class warfare? Yes in part. But the easier you make it for people to be fat and unhealthy the more that will become do. It is called adverse selection. Rant at me if you like but it is the reality. Insurance cost should always be tied to risk.

  33. Jimmy says:

    The exerpt from Robert Kiyosaki is riddled with political bias in the way his ‘historical’ accounts are discussed.

    @Jeff is spot-on; risk is necessarily tied to reward, and insurers should have the right to charge higher premiums from persons who take greater risks with their health.

    The unfortunate truth is that in a Capitalist society, there will always be fluxuations in prices and stability. I like to surf, and sometimes I have to drain the seawater out of my nose, but that shouldn’t make ANYONE want to drain the ocean!!

    The U.S. Government’s attempt to regulate the instability out of capitalism is what has created the current tribulations. An unregulated supply & demand system will regulate itself.

    Any student of physics will see this as a large-scale application of the Heisenberg Uncertainty Principle; the more you try to identify (‘pin down’) one aspect of a particle (or in my example, supply and demand system), the more unstable and unmeasurable the rest of it becomes.

    Get the Government’s greedy and bumbling hands out of the cookie jar, and it will return to equilibrium.

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  35. p.m. says:

    not sure why people get in a tizzy over rationing health care. health care is already rationed, the new system would just attempt to ration it better. you know, at some point, all people do pass away. health care alters that point. doing nothing is implicitly rationing health care on your part, accepting the rationing that exists today. reforming the system is explicitly addressing the rationing issue.

  36. Jack Mender says:

    It seems like business is still getting hit hard. Is anybody seeing an upswing in their respective niches? Health reform seems like a mess. I generate long term care insurance leads and annuity leads for the insurance industry, but volume has been terrible in the last two months. I am afraid the worst is yet to come, but maybe it is just my attitude.