The Prepaid verses Postpaid Healthcare

http://theincidentaleconomist.com/wordpress/cnn-com-why-emergency-rooms-dont-close-the-health-care-gap/comment-page-1/#comment-27536

http://www.cnn.com/2012/05/07/opinion/carroll-emergency-rooms/index.html

There have been a number of stories in the media lately detailing how far hospitals will go to collect on unpaid medical bills.

Most of our insurance premiums is not insurance against above average cost but prepaid healthcare. So advocates of prepaid healthcare must explain why it s preferable to prepay than to pay after receiving care.

Problems with paying after care:

1: It can be difficult for the provider to collect.
2: Lack of ability to make decisions in certain emergency situations.
3. in some cases it causes people to wait longer than optimal to get treatment.

Problems with prepaying:

1. Encourages overuse.
2. Encourages quixotic attempts to extend the lives if the terminal.
3. Discourages self treatment.
4. Aligns providers and patient against payer.
5. Allows providers to more easily collect for care that failed to benefit the patient.

A benefit of paying in the rears is that should motivate the providers to get the patient back to a productive state.

Note the state could pay Providers after care in cases of bankruptcy putting certain limits on how the bankrupt can spend on other things .

Tyler Cowen has Another Post Saying that Euro is in Danger

Tyler Cowen has another post saying that Euro is in danger and that if it falls it could badly hurt the European and world economies.

It looks to me like central banking is at the root of the problem.  Central banking seems to me to be prone to crisis.
1. Central banking appears to have feedback problems.
2. It is not easy for the central banks to get the money into the economy where it is needed.
3. People trust the central banks so much that they prefer money assets to real assets in times of crisis. It seems to me that it would be better if they mistrusted money and so bought real assents instead.
4. Central banks are subject to the whims of the median voter, who knows nothing about banking.

Incidence of Taxation

Scott Sumner has another great post that includes this gem:

(I kid you not, many students think a tax will be passed on to consumers, but a subsidy will be pocketed by corporations.  Why you ask why, they actually think it’s in the corporation’s interest to pass on tax increases, and pocket subsidies.  By which logic a $20 tax combined with a $20 subsidy, i.e. a “nothing,” would cause prices to rise by $20.  Go figure.)

People are easily confused about the incidence of taxation.  I have a hard time convincing my fellow landlords that in our competitive market the renter pays the property taxes. The landlords are outraged at the level of the property tax and they seem to want to stay outraged.  On the other hand the renters, who should be outraged, are completely unaware that they are paying the tax but at least when I tell them the light comes on.  Much of the art of modern democratic politics is to hide the costs from the majority of voters and show the benefits.


As an aside, the other day I was listening to a local radio show and one of our local politicians was going on and on about how the property tax more progressive than the sales tax as a self evident given and so we should suport the optional discretionary millage, but here in Florida there is something called the homestead exemption.  The homestead exemption, exempts the first, I think it is $60,000 of the value of a home owner's primary resident from taxation but most poor people live in rentals which are fully taxed, there rental market is very competitive here so the renter pays every dime.  This makes the property tax more regressive that it otherwise would be. On top of that food is exempt from the sales tax and poor spend more on food than others.  Bottom line it is not clear that the property tax in Florida is more progressive that the sales tax and I bet that that politician does not know either.

Government and the Sub-prime and Financial Crisis

The left likes to blame economic freedom for the great recession and so they say we need more government control to avoid it happening again but Government is subject to the same problems that caused the sub-prime and financial crisis. Even getting some money from the federal Government and with the power to tax some local Governments are going bankrupt!


IMO the problem is that the current monetary system is not robust they disruptions.  It has serious feedback problems.  I think that we need to move to a competitive monetary systems were the incentives are to counteract a contraction.  

Medicaid and Marginal Tax Rates

Medicaid eligibility for a single parent with one child ends abruptly at about $18,000/year income.

Suppose having medicaid is worth $300/month to a person making $17,000/year.  $300/month is $3,600/year,  if the person earns $1,000/year more he is $2,600 worse off.

So why not offer all Americans health insurance with a deductible based on their last years income as outlined here.  That would eliminate the this big problem and perhaps push people to better control medical expenses.

One argument against such a system is that it would leave people with too little money in years with high medical expenses but Here is a story about a guy lives a middle class life on $7,000/year.

Governments Banking and a Famous Hayek Quote

Below is from a Tyler Cowen post:

5. Mind-numbing debates over banking, and a response from Krugman, and Nick Rowe.

It reminds me that our monetary and banking system is a great example of the famous Hayek quote:

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Back when Governments took over the monetary system even the experts did not understand much about it. Yet a government takeover in a democracy puts the monetary system under the control of the median voter. Yet the experts in the post do not completely agree.

In free banking even the bankers do not need to understand the system as a whole, with a Government controlled central bank the median voter needs to understand the Monetary system as a whole. How could that every work well?

Robin Hanson has a Post Suggesting Consulate Care

Robin Hanson has a post suggesting consulate medical care

Here’s another idea for medical reform: consulate care. Let countries like Sweden, France, etc. with approved national health care systems have bigger consulates, and open them up to paying customers for medical services. For example, you could sign up for Swedish Care, and when needed you’d go to their consulate to get medical care as if you were living in Sweden.

A more realistic step would be to get our states to respect medical Licenses from any developed country (and of course from any state) and allow free entry to practitioners (give all Dr and nurses green card automatically). Companies from France could then setup offices and even hospitals here. Providers might want to come and practice here as a sort of working vacation and see the USA.

Ads:
www.abs-usa.com
www.schedulebase.com