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Some of the Obama’s more incoherent detractors have labeled his health care plan as "socialized medicine." It is assumed, naturally, that socialism is Bad (with a big B).

While socialism may be less effective in many industries and fields (just look at the Soviet Union’s fate, after all), the insurance industry as a whole is rather different. Think for a moment – how is capitalism supposed to work? The company that makes the most profit wins. Companies make profit by selling goods and services to consumers; the better the product, the more consumers buy it, the more money said company makes, and the more effort said company puts into making an even better product. Society as a whole benefits from this invisible hand.

With insurance, on the other hand, companies don’t make profit by selling consumers the best product. Instead, they make money by denying insurance claims from consumers.

Continued below the fold.

The incentive is perverted; the insurance company that does the best denies the most claims. And because one has to begin with a lot of preexisting money to start an insurance company, it is very difficult for competition to emerge. Meanwhile, the customer is trying to make insurance companies pay for something (a medical crisis, for instance) he or she could not afford on his or her own. It is as if both sides are continually trying to rob the other.

Obviously, this is Bad (with a big B) for society.

Partly as a result of the above problem, the United States spends far more than its peers on health care and gets far less for its cash.

Does this mean that the United States ought to switch to a socialist health care system? Doing so would certainly constitute a wretching change. Terrible mistakes could be made with implementation; moreover, other failings of the U.S. system (e.g. malpractice lawsuit costs) are just as or even more responsible for its high costs.

Yet nations with socialist systems, such as Britain and France, tend to have far "healthier" health care by most measurements – especially cost per capita. As even the most persistent free-market advocates acknowledge, some fields  (e.g. the financial industry) are simply not suited to capitalism. Health insurance seems like one such domain.

To switch or not to switch? At the very least, it’s worth considering.

--Inoljt, http://thepolitikalblog.wordpress.com/

Originally posted to Inoljt on Mon Sep 14, 2009 at 07:57 PM PDT.

Poll

Should the U.S. switch?

94%17 votes
5%1 votes

| 18 votes | Vote | Results

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Comment Preferences

  •  Tip Jar (1+ / 0-)
    Recommended by:
    Marie

    Read my blog: http://thepolitikalblog.wordpress.com/

    by Inoljt on Mon Sep 14, 2009 at 07:57:09 PM PDT

  •  We could have both -- and let them (0+ / 0-)

    compete against each other.  Getting from here to there wouldn't be wrenching at all.  Would cost less than ObamaCare, increase access, and improve quality.

    The insurance as the payment mechanism for health-care add 20-25% to the cost.  Fee-for-service delivery adds 75-80% to the cost.   That's why we spend double what the UK spends.

    "Dulled conscience, irresponsibility, and ruthless self-interest already reappear. Such symptoms of prosperity may become portents of disaster!" FDR - 1937

    by Marie on Mon Sep 14, 2009 at 08:16:15 PM PDT

  •  Medical malpractice costs? (1+ / 0-)
    Recommended by:
    Ammo Hauler

    You're right to point out that there are other factors besides insurance industry overhead, but medical malpractice only accounts for a few percent of total medical costs. This is a myth perpetuated by certain doctors.

    Much bigger sources are unnecessary procedures and excessive doctors' pay. Both of those would also be cut down by moving to a single payer system, though.

    •  Besides which much of the justification for (0+ / 0-)

      large malpractice damage - the cost of corrective/continuous care - goes away with socialized or UHC since the injured party gets that care for little or no cost.

      Which leaves only punitive damages and those would likely be smaller and could be the responsibility of the doctor to carry coverage.

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