A “Can of Peas” explains the Healthcare Dilemma

I catch myself in frequent conversations trying to explain how competitive free markets create quality and affordability in products for consumers and how this relates to our healthcare dilemma.  If you don’t align stakeholder interests and motivations with desired outcomes,  then the process or system eventually cannibalizes itself.

I recently finished reading  “The Righteous Mind – Why Good People are Divided By Politics and Religion” and came across one of the best written explanations for this.   Kudos to both Goldhill and Jonathan Haidt whose combined work brought this to light so beautifully.  Enjoy!

In 2009, Goldhill published a provocative essay in The Atlantic Monthly titled “How American Health Care Killed My Father”.  One of his main points was the absurdity of using insurance to pay for routine purchases.  Normally we buy insurance to cover the risk of a catastrophic loss.  We enter an insurance pool with other people to spread the risk around, and we hope never to collect a penny.  We handle routine expenses ourselves, seeking out the highest quality for the lowest price.  We would never file a claim on our car insurance to pay for an oil change.

The next time you go to the supermarket, look closely at a can of peas.  Think about all the work that went into it – the farmers, truckers, and supermarket employees, the miners and metalworkers who made the can – and think how miraculous it is that you can buy this can for under a dollar.  At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you.  If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god.  You can begin to understand why libertarians sometimes have a quasi-religious faith in free markets.

Now let’s do the devil’s work and spread chaos throughout the marketplace.  Suppose that one day all prices are removed from all products in the supermarket.  All labels too, beyond a simple description of the contents, so you can’t compare products from different companies.  You just take whatever you want, as much as you want, and you bring it up to the register.  The checkout clerk scans in your food insurance card and helps you fill out your itemized claim.  You pay a flat fee of $10.00 and go home with your groceries.  A month later you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you’ll have to send in a check for an additional $15.00.  It might sound like a bargain to get a cartload of food for $25.00, but you’re really paying your grocery bill every month when you fork over $2,000.00 for your food insurance premium.

Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food or increase its quality.  The supermarkets get paid by the insurers, and the insurers get their premiums from you.  The cost of food insurance begins to rise as supermarkets stock only the foods that net them the highest insurance payments, not the foods that deliver value to you.

As the cost of food insurance rises, many people can no longer afford it.  Liberals push for a new government program to buy food insurance for the poor and the elderly.  But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts.  Before you know it, that can of peas costs the government $30.00, and all of us are paying 25 percent of our paychecks in taxes just to cover the cost of buying groceries for each other at hugely inflated costs.

That, says Goldhill, is what we’ve done to ourselves.  as long as consumers are spared from taking price into account – that is, as long as someone else is always paying for your choices – things will get worse.

We can’t fix the problem by convening panels of experts to set the maximum allowable price for a can of peas.  Only a working market can bring supply, demand, and ingenuity together to provide health care at the lowest possible price.  For example, there is an open market for LASIK surgery (a kind of laser eye surgery that removes the need to wear contact lenses).  Doctors compete with one another to attract customers, and because the procedure is rarely covered by insurance, patients take price into account.

Competition and innovation have driven down the price of the surgery by nearly 80 percent since it was first introduced.

And what do you think will happen to the price and quality of LASIK surgery when insurance covers it?

One important thing to remember is that in the book it states that liberals are motivated by the “care foundation” to provide services to people that can’t afford it, which I believe to be true.  However, in creating systems to do that we inevitably create the $30 dollar “can of peas” situation and a new evil surfaces.  This happens when stakeholder interests and motivations are not aligned with outcomes.  Free markets, though they have shortcomings, do this miraculously and you get a can of peas for under a dollar.

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Farewell IT….you have been good to me

As of today I accepted a new position at Concorde Career Colleges where I will be the VP of Marketing and Data Analytics.    In that new job I will manage Marketing, the National Call Center, and Data Analytics.   I am humbled and excited yet again that they have given me the opportunity to manage a different area of the company.  We really have some fantastic and talented folks in this area of the company.  Let’s be honest, I will always be an IT geek and I can’t say enough great things about my IT team.  This will be the first time I am technically not working in or managing your traditional IT department.

So what I think this means…….is that I am no longer an IT guy.   And with this I finally drop the dreaded IT guy curse.  Whats that you say?  I believe this means I no longer have to fix anyone’s computer! w00t!

Dealer of Folly in 2015

As I kickoff 2015 I have felt convicted to reflect on that which is important to me.  From the perspective of the world, people I interact with, some supposed friends, and just my general interpretation of the words I hear, I am tainted.     And though the word “tainted” may bring many things to mind, I am specifically referring to being infected with an undesirable quality.  It has become increasingly clear that I find myself in a place and time where I am viewed as a dealer of disgust.  Numerous are my symptoms. I am hypocritical, ignorant, uninformed, selfish, unloving, intolerant, and outdated to name a few.

This is not a recent onset of infection. The truth is that I have been ill since I was 13 years old.   Worst of all, I am also contagious by design and thus spreading the undesirable in multiplicity.  Don’t fear regarding this news.  The world has built up immunity and has suppressed this illness relentlessly, though a remnant still remains susceptible despite those efforts.  So the chances of you contracting this illness are probably not something to worry about.

Perhaps I am muddling intently or purposefully “stirring the pot” to say in different words, but what I am has become concerning to many.   I am a Christian.

There is a good chance that if you are reading this then you know me in some capacity.  If what I am has not been clear to you; shame on me.   I have seen better days where I was more contagious.  Given the political climate I have tried to bring to light here, Christians find themselves being comfortably Christian when amongst Christians, but comfortably normal and generic when not.  This dualistic lifestyle that I have been guilty of might just be the key to worldly success.  I need the courage, as do many Christians, to view worldly success and acceptance as having little value.

Matthew 6: 19. Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, 20. but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. 21. For where your treasure is, there your heart will be also.

Do not misinterpret my words.  I am not calling for divisive actions or a proud embrace of the symptoms I have highlighted. If you as a Christian were prepared to sound your war cry upon reading this, then pause for a moment to be certain we are in accord.  In fact, it is my argument that the infection I have described is perhaps a misrepresentation of genuine Christianity and more describes your average census survey Christian.  Otherwise my remnant statements seem yet again ignorant when looking at the below data.

So it seems that 31.7% of the world is census survey Christian and that number rises to over 75% for the US.  These people come in many forms and contribute to the worldly definition of a Christian.  And yet they all feel comfortable, at least on things like surveys, bearing the name of Christ.  To do something in someone’s name, or while bearing a label,  seems to be based on the discretion of the label bearer and not the label.  What does this mean?  It means that I could very well do something horrible in your name today while declaring it boldly.   And though you would likely not condone the activity, it seems that I have the discretion to do the unthinkable while bearing your label to bring taint upon you.  The ones whose activity you would condone and allow to bear your name are the genuine type.   Genuine Christians are only those that Christ has saved to bear his image, and I am fairly certain that percentage is much much smaller.   I think it is also safe to say that the worldly definition of a Christian is severely tainted since the law of numbers regarding false image bearers would prevail.

Matthew 7: 13. Enter by the narrow gate. For the gate is wide and the way is easy that leads to destruction, and those who enter by it are many. 14. For the gate is narrow and the way is hard that leads to life, and those who find it are few.

In 2015 it is important to me that everyone understand that I bear this image with humility.   I am a Christian and severely flawed.  I know the standard and fall short.  I often act in ways that my label would not condone.  In humility I claim Christ because my broken state leaves me undeserving of this love and favor.  This is the true illness and I have had this one since birth.  I am sinful but not a slave to it, nor is it an excuse.

Romans 6: 17. But thanks be to God, that you who were once slaves of sin have become obedient from the heart to the standard of teaching to which you were committed, 18. and, having been set free from sin, have become slaves of righteousness. 

It is my prayer in 2015 that everyone have genuine encounters with genuine Christians.  I am sure that the worldly definition will start to erode regarding these genuine people.  But at the end of the day, there is no guarantee that you will be susceptible to their message or that they will be bold enough to deliver it. Let’s hope the “illness” becomes the cure.

I hope everyone has a great 2015.  I will seek to be a dealer of folly.

1 Corinthians: 18. For the word of the cross is folly to those who are perishing, but to us who are being saved it is the power of God.

 

 

 

WATCHMEN: Awesome Graphic Novel

WATCHMEN Book Cover

WATCHMEN Book Cover

I just got back from a relaxing vacation and part of that relaxation time was spent reading WATCHMEN.  I went to a movie about a month ago and saw a preview for the WATCHMEN movie that is out in theaters now and that it was based on the graphic novel.   I haven’t ever read a graphic novel and immediately thought that this one would be a good one to read.  I picked up a copy the day before we left for vacation and I completed it today.  The book is awesome and I would highly recommend reading it if your looking for a great piece of fiction.  This book is outstanding from a literary and artistic viewpoint.   This novel really paints a picture of evil and how it decays the world. Though this book really didn’t strive for a hidden Christian message of any kind, I found the following quote from the text fitting:

“I guess I’ve just reached a point where I’ve started to wonder whether all the grandstanding and fighting individual evils does much good for the world as a whole.  Those evils are just symptoms of an overall sickness of the human spirit, and I don’t believe you can cure a disease by suppressing its symptoms.”  Adrian Veidt (Ozymandias)

Go out and grab a copy if your looking for an entertaining read.  I plan to read more graphic novels and I am looking forward to selecting the next one to read.