Viet-Justice

Get in shape or pay a price.

That’s a message more Americans could hear if the health care reform bills passed by the Senate Finance and Health committees become law.

This is CHANGE we can believe in.  The Senate is proposing that not everyone is equal in the health care debate.  Pressure will be on the workers to live a healthy lifestyle, or their employer can raise their insurance rate.  That’s right people it’s time to lose weight, stop smoking, and lower your cholesterol.

The proposal is backed by the US Chamber of Commerce and the National Association of Manufacturers.  Opposition includes unions, the American Heart Association, the American Cancer Society, and the American Diabetes Association.  No surprise that the unions are against the proposal.  Have you seen all the fat GM workers that were on television when the bail out was at its peak?

The incentives could attack a national epidemic of obesity. They also cut to a philosophical core of the health care debate. Should health insurance be like auto insurance, in which good drivers earn discounts and reckless ones pay a price, thereby encouraging better habits? Or should it be a safety net in which the young and healthy support the old and sick with the understanding that youth and good health are transitory?

Health insurance should definitely be like auto insurance.  It is a hedge against a potential bad outcome. If you are doing all the right things then you should be rewarded.    Instituting a system where those who are contributing to society and not over consuming are rewarded will make for a better world.

Valeo is a company that has some good ideas with regard to implementation of health standards.  You may get an insurance discount if you submit to tests proving your health.  If you choose to be anonymous then you pay a higher premium.  This concept is no different than drivers who allow their insurer to put a GPS in the car for a discounted premium.  Basically the message is everyone pays a certain price, but if you jump through hoops then you get a discount.

We are facing 10% unemployment, along with the rise of robotic factories, and information technology that reduces the need for manual labor.  A few less people would bring the labor market back into equilibrium. It would continue transforming the world workforce into intellectual laborers.  This would be progress from the industrial revolution where everyone labored in dirty factories.

What about the safety net for the old and the sick?  Since death is inevitable it would be illogical to expend resources on individuals where there would not be significant benefit.  The old have had their time in the spotlight and need to step off the stage of life and let a new generation take over.  The world belongs to the young and the ambitious, not the old, fat, and lazy.  This is not to say that we should stop research into life extending technologies.  If new technologies can extend the useful lifespan of the brain and body, thereby extending productive life years, then such research is welcome.  Research has shown that obesity and Alzheimer’s disease are related.  This shows that fat people will continue to be a drain on the system by taking up space in nursing homes at an earlier age.

What kind of world would your eyes prefer?

There should be some benefits for the obese.  We need a biodiesel commodity on the futures markets so that fat people can sell futures contracts to deliver a quantity of blubber for processing.  Considering that these people are irresponsible with how they live their lives today, they would probably sell more futures than they could deliver safely.  Which would mean that we would have to send some repo men to “collect” on the contract so the rest of us can drive our fine German or Japanese automobiles.  This is a good way to reduce unemployment, carbon emissions, and Alzheimer’s disease in one simple step.

There would be economic benefit from a futures market in fat.  Funeral homes could be transformed into biodiesel reclamation stations to provide our future energy sources.  This would be an economic shift and allow petroleum companies to get into a new market, thus creating jobs.  We could have Valvoline Haus or The Penzoil Home for the Obese as nursing homes for our large friends.  Monsanto could buy McDonald’s to create a new form of genetically engineered fast food for our livestock that will fuel the economies of the future.

McDonald’s macht Kraftstoff!

Brother Grim asks the question of who is better for you, the government or the insurance companies?

Or are you willing to rein in anarcho-capitalism long enough to come up with a solution that works for everyone? People who rail against “Socialized Medicine” live in constant fear of having medical decisions made by government bureaucrats, but would you rather live at the whim of insurance company executives who see you as nothing more than an account ID? Choose your poison folks.

Ironically he cites a life expectancy graph that has Japanese at the longest lived.  First of all, there is no comparing Japanese society to American society.  Diet is typically cited as the reason Japanese people live so long, not the kind of health care they have. As a matter of fact the Japanese system is more privatized than the US according to Professor Naoki Ikegami with 80% of hospitals being truly private with no government subsidy or subsidized workers.  Americans need to drop the burgers for some rice, tofu, and fish.  Then hit the gym more than they do to get the effect of walking everywhere like the French and Japanese do.

On the topic of which is better for you, the government plan or the plan of the big corporate insurance providers, we can take a look at the pros and cons of each.  Brother Grim says that the corporations will treat you like an account ID.  Well the government will treat you like a social security account ID, so there’s no difference with regard to identifying you.  Government is also a less trustworthy due to remarks that ignoring constituents because “they are just people” and the partisan closing of GM and Chrysler dealers.  It would appear that viability of the dealership was not a criteria, but who the owners donated to was.  This shows that government does not look at numbers only when making decisions, which is bad.  You know that the decisions made by government will be to the political benefit of who is in power.  Unlike China where there is only one party, you are at the mercy of your party being out of power when you have to depend on government.  So a government system is automatically stacked against 49% based on the consensus of the popular results of the general election.

How are the corporations superior to the government system?  Both identify you by some number and treat you like a number.  Where does the corporate system have greater benefit?  First, you get to choose which entity you want to go with.  I’m also including HSAs in the mix for young people who want to be self insured.  This lets the population choose which plan suits their lifestyle.  The next area that insurance companies excel at is data.  Actuarial tables and the Statistical Value of Life (SVL) can be used to calculate an appropriate payout.  This is superior to the government solution which relies on humans to make the decisions and puts these decisions in the hands of economists, mathematicians, and programmers.  If the formulas used by an insurance company are under change control and auditable then the consumer knows what circumstances they can expect the insurance company to pay and what circumstances the insured is better left to their fate.

This serves to enhance marginal private benefit by letting the formulas decide for families the appropriate time to stop throwing good money after bad.  There is no single formula for SVL, but many take into account occupation, education, hereditary diseases, current age, and other factors.  There are also general flat rate formulas such as the US DOT’s Treatment of the Economic Value of a Statistical Life.  If you’re in a plane crash you’re worth $6million.  Any way you calculate it, you can determine what is the best solution for your family.

How does this benefit a family?  If you have ever had to serve under medical power of attorney, you know that it is illogical to run a family into bankruptcy expending resources on someone where the computations indicate a lack of equlibrium between cost and benefit.  Americans unwisely bankrupt themselves on spending for end of life care.   If it makes little numerical sense to put grandma’s house on the auction block to pay for 6 months of chemo or dialysis then why do it? Another area is nursing home care which costs approximately $6000 per month according to the 2007 Genworth Cost of Care Survey.  It may may more sense to ship grandma to Portland Oregon or Beijing China where an honorable assisted suicide is legal, rather than wasting the family’s money on a futile effort or worse, allowing the government to seize grandma’s estate to cover her care costs, thus depriving the clan of resources.

That resource could be used to fund the college education of the children of the clan then why undertake such “heroic” measures as the medical care field says.  This leaves fewer resources to pour into a dynasty trust which in turn leaves fewer resources for education and betterment of the clan unit.  In one generation a clan can go from blue collar and poor to white collar through education.  We can also apply the same principals to child care as well.  If a very young child has a terminal disease the parents can always make another one.  This would be logical if the family has more than one child to care for.  With a minimum of $200,000 of child raising expenses, it’s better to reboot early on than spend a ton of money then lose out and have to reboot.

The corporate alternative provides us with a logical and auditable solution that doesn’t put families in the poor house, and maximizes marginal private benefit without the introduction of subsidies, taxes, and dead weight loss.  It also benefits the individual by creating the positive externality of reducing marginal social benefit that a government plan would introduce, thereby reducing competition for resources and enabling the individual to obtain said scarce resources in a more accessible fashion.