Obamacare

[Duel of Fates]

Obamacare might suck, but Americans voted for it and they have to pay for it.

We didn't vote for it. It was unpopular with most Americans when it was pushed through by liberals in control of both House and Senate. Please don't tell me that I voted for it.

[[NH]Mr.Yankovic]

Wonder what would happen if I could lock this topics ...

[CommanderOtto]

Obamacare might suck, but Americans voted for it and they have to pay for it.

We didn't vote for it. It was unpopular with most Americans when it was pushed through by liberals in control of both House and Senate. Please don't tell me that I voted for it.

I stand corrected then. But Obamacare still exists. Even if republicans come to office and they change the whole thing, the debt will still be there now.

[ProfessorDreadNaught]

I am sorry Dread, but you are wrong. taxes aren't bad all the time. I know what I am talking about. I am studying Economics. I don't study Health Economics and I could always be wrong with some stuff, but I know much more about it than most people. Taxes might cause "market inefficiencies" but people keep asking the government for more stuff... and they need to pay for it somehow. Obamacare might suck, but Americans voted for it and they have to pay for it. Hell, it sucks to pay taxes, but the government has to pay bills. Anyway, adding a tax to it is insignificant in the whole problem of healthcare. You are right, they will get more expensive for us, but the price will just go up regardless of a tax or no tax. Finally, I don't know why you said what you said, but I have a life and I do pay taxes and I do pay medical bills just like you.... and I have also worked with patent law myself.

Spend a little time on Ethics and you will agree, taxes are morally wrong. Without exception. A tax implies that if you don't give the money as requested, your liberties will be suspended/violated. This is unequivocally wrong. As a governed people we accept this immorality in exchange for some defined benefit it offers. What's debatable, but I believe is true and historically provable, is that there is a limit to the compiled immorality a people will suffer. Woe to those who would wield this wickedness with impunity when such a limit is reached.

patents are a legal monopoly, regardless of your or my opinion and a beneficial one. People who study Economics or International Trade know this. Patents are an essential part of any economy and they exist in most countries, very similar to patent law in the U.S. There are some differences, but believe me, the U.S is not the only place where patent law gives protection from competition for several years. In fact, if i'm correct, Brazil's patent law protects inventions for 20 years from competition... and medical devices are still cheaper there than here. My point is, changing patent law won't change the rising healthcare costs.

We agree on the effective definition of a patent. And I appreciate your burgeoning education in macro Economics (that's what they called it when I too studied it in College) What you seem to overlook is the possibility of its abuse. I am saying and can site a plethora of anecdotal evidence, that patent abuse is rampant in the Health Care industry and a major component to high prices in the U.S. where those patents are principally enforced.

Let me know if googling "medical patent abuse" doesn't return what i'm talking about. Here's one on me: Medical Patent Abuse

Finally, you say that the reason a medical product is more expensive in the US is because all health care in the US is expensive.

well, sort of. But there are some issues in the whole nature of the industry that simply make it different to other industries. It doesn't work like the commodities market or the labor market... I wish I could explain the whole thing here, but it is too long and it took me a whole semester to get to the point where I could understand it well. One thing for sure though... medical devices are not more expensive here in the U.S than in other countries because of "patent law". What I do know is that your idea of "rate of return" ceilings have been applied before and for good reasons (where I somewhat agree with you), but in other situations, not patent law lol.

Please spend more time with a different teacher on the subject. While it is clear (after TONS of investigation) where the real problems in health care costs lie, it isn't simply the nature of the industry or market. Medical patent abuse is one area that is a simple fix and can have a demonstrable impact on prices for things from artificial knees to AIDS and Cancer medication. I mentioned that I have other solutions I won't list in this thread. I only listed this one because it is so simple and obvious. The others I'll share with my local representative.

Meanwhile, I'll share with you the most potent lesson I learned studying macro Economics. "When studying markets and market trends, look for motivation and exploitation." Put it at the top of every paper you write and graduate with honors.

PS. I listed those bonafides so you know that when I say I think you don't know what you are talking about, that based upon that list of life experiences, you can be assured that I do.

[CommanderOtto]

I am sorry Dread, but you are wrong. taxes aren't bad all the time. I know what I am talking about. I am studying Economics. I don't study Health Economics and I could always be wrong with some stuff, but I know much more about it than most people. Taxes might cause "market inefficiencies" but people keep asking the government for more stuff... and they need to pay for it somehow. Obamacare might suck, but Americans voted for it and they have to pay for it. Hell, it sucks to pay taxes, but the government has to pay bills. Anyway, adding a tax to it is insignificant in the whole problem of healthcare. You are right, they will get more expensive for us, but the price will just go up regardless of a tax or no tax. Finally, I don't know why you said what you said, but I have a life and I do pay taxes and I do pay medical bills just like you.... and I have also worked with patent law myself.

Spend a little time on Ethics and you will agree, taxes are morally wrong. Without exception. A tax implies that if you don't give the money as requested, your liberties will be suspended/violated. This is unequivocally wrong. As a governed people we accept this immorality in exchange for some defined benefit it offers. What's debatable, but I believe is true and historically provable, is that there is a limit to the compiled immorality a people will suffer. Woe to those who would wield this wickedness with impunity when such a limit is reached.

patents are a legal monopoly, regardless of your or my opinion and a beneficial one. People who study Economics or International Trade know this. Patents are an essential part of any economy and they exist in most countries, very similar to patent law in the U.S. There are some differences, but believe me, the U.S is not the only place where patent law gives protection from competition for several years. In fact, if i'm correct, Brazil's patent law protects inventions for 20 years from competition... and medical devices are still cheaper there than here. My point is, changing patent law won't change the rising healthcare costs.

We agree on the effective definition of a patent. And I appreciate your burgeoning education in macro Economics (that's what they called it when I too studied it in College) What you seem to overlook is the possibility of its abuse. I am saying and can site a plethora of anecdotal evidence, that patent abuse is rampant in the Health Care industry and a major component to high prices in the U.S. where those patents are principally enforced.

Let me know if googling "medical patent abuse" doesn't return what i'm talking about. Here's one on me: Medical Patent Abuse

Finally, you say that the reason a medical product is more expensive in the US is because all health care in the US is expensive.

well, sort of. But there are some issues in the whole nature of the industry that simply make it different to other industries. It doesn't work like the commodities market or the labor market... I wish I could explain the whole thing here, but it is too long and it took me a whole semester to get to the point where I could understand it well. One thing for sure though... medical devices are not more expensive here in the U.S than in other countries because of "patent law". What I do know is that your idea of "rate of return" ceilings have been applied before and for good reasons (where I somewhat agree with you), but in other situations, not patent law lol.

Please spend more time with a different teacher on the subject. While it is clear (after TONS of investigation) where the real problems in health care costs lie, it isn't simply the nature of the industry or market. Medical patent abuse is one area that is a simple fix and can have a demonstrable impact on prices for things from artificial knees to AIDS and Cancer medication. I mentioned that I have other solutions I won't list in this thread. I only listed this one because it is so simple and obvious. The others I'll share with my local representative.

Meanwhile, I'll share with you the most potent lesson I learned studying macro Economics. "When studying markets and market trends, look for motivation and exploitation." Put it at the top of every paper you write and graduate with honors.

So you are saying, It isn't the nature of the healthcare industry? You don't know that healthcare market is actually an Oligopoly and that it is, by definition, impossible to set prices where Marginal Cost = Marginal Revenue? In a normal oligopoly, that would be mean prices would not go up like in a monopoly (Game theory makes it impossible)... and yet, the prices continue to go up because there is something different in how people "buy" a healthcare service:

1. You can't shop for the best price if you are having a heart attack.
2. People don't care what is the price of something if it means it can save their life. Life is priceless (that means, almost no limits in the price in the supply and demand curves).
3. There is a vicious circle that pushes prices up. Hospitals know they can charge high prices from health insurance companies because they have the cash. Health insurance companies then raise the premiums. People pay higher premiums because one illness will ruin you financially in this country. Then the health insurance has more cash and the hospital can charge a higher price next month.
4. healthcare is inelastic.

Hospital -> Health insurance company -> people -> Hospital .

This is what makes it unique. Other countries have opted for basically taking control of healthcare altogether, like Canada or some european countries. That will never happen here of course, but that will show you that even in some other countries or in Europe, where they also have outstanding economists, even they couldn't find a good alternative to adding rate of return limits or eliminating private healthcare.

As for the patent abuse... if someone comes up with a patent and they charge the highest price possible, that means they are maximizing profit (Marginal cost = Marginal Revenue)... basics of monopoly. Yes, that means less people can buy these medicines and medical devices, but if you touch that patent law, inventors will simply go to another country and patent it there. If I had made a patent and the U.S starts putting a rate of return (specifically on patent law) then I would simply take my patent to Europe and they will protect there for several years as well. Then I bring it to the U.S and charge whatever I want just the same. Or maybe it might be worse. If the U.S changes patent law here, people put the patent abroad because they have less confidence in patent law in the U.S. Then they simply sell lesser quality drugs or medical devices and only sell the new innovative products in the countries that actually protect them (so basically, less quality care in the U.S). So, you are right there is abuse, but that's how patent law works worldwide and it cannot be evaded by simply changing the law in the U.S.

as for the taxes thing.... you are entitled to your opinion. If you think it is not morally correct, ok then. And if people want no taxes on medical devices, then ok... but it's not going to change anything anyway. Prices will continue to go up.... and with the new laws that force everyone into insurance, that will shift the demand curve to the right (price X quantity)... so they will win more money and the tax is simply to reduce that excessive revenue they will gain with the new laws. It was made into a big issue for nothing. And if people don't want to pay more taxes, the Fed will have no other choice than to continue with an inflationary policy to pay for the trillions in debt. It's either taxes, or inflation. Basics of macro. This also shows us how deep in trouble the U.S economy is in regards to debt. People think you can have no taxes and no inflation... with that debt, the government has to choose. I don't want to sound like a showoff and I didn't want to get into detail others don't understand, but you asked me ok? I hope my explanations make some sense to you since you studied macro too...



.... lol, I hope someone understood the joke ...

[[NH]Mr.Yankovic]

So you are saying, It isn't the nature of the healthcare industry? You don't know that healthcare market is actually an Oligopoly and that it is, by definition, impossible to set prices where Marginal Cost = Marginal Revenue? In a normal oligopoly, that would be mean prices would not go up like in a monopoly (Game theory makes it impossible)... and yet, the prices continue to go up because there is something different in how people "buy" a healthcare service:

1. You can't shop for the best price if you are having a heart attack.
2. People don't care what is the price of something if it means it can save their life. Life is priceless (that means, almost no limits in the price in the supply and demand curves).
3. There is a vicious circle that pushes prices up. Hospitals know they can charge high prices from health insurance companies because they have the cash. Health insurance companies then raise the premiums. People pay higher premiums because one illness will ruin you financially in this country. Then the health insurance has more cash and the hospital can charge a higher price next month.
4. healthcare is inelastic.

Hospital -> Health insurance company -> people -> Hospital .

This is what makes it unique. Other countries have opted for basically taking control of healthcare altogether, like Canada or some european countries. That will never happen here of course, but that will show you that even in some other countries or in Europe, where they also have outstanding economists, even they couldn't find a good alternative to adding rate of return limits or eliminating private healthcare. As for the patent abuse... if someone comes up with a patent and they charge the highest price possible, that means they are maximizing profit (Marginal cost = Marginal Revenue)... basics of monopoly. Yes, that means less people can buy these medicines and medical devices, but if you touch that patent law, inventors will simply go to another country and patent it there. If I had made a patent and the U.S starts putting a rate of return (specifically on patent law) then I would simply take my patent to Europe and they will protect there for several years as well. Then I bring it to the U.S and charge whatever I want just the same. So, you are right there is abuse, but that's how patent law works worldwide and it cannot be evaded by simply changing the law in the U.S.

as for the taxes thing.... you are entitled to your opinion. If you think it is not morally correct, ok then. And if people want no taxes on medical devices, then ok... but it's not going to change anything anyway. It was made into a big issue for nothing. And if people don't want to pay more taxes, the Fed will have no other choice than to continue with an inflationary policy to pay for the trillions in debt. It's either taxes, or inflation. Basics of macro. This also shows us how deep in trouble the U.S economy is in regards to debt. People think you can have no taxes and no inflation... with that debt, the government has to choose. I don't want to sound like a showoff and I didn't want to get into detail others don't understand, but you asked me ok? I hope my explanations make some sense to you since you studied macro too...



.... lol, I hope someone understood the joke ...[/quote]
lol

[ProfessorDreadNaught]

So you are saying, It isn't the nature of the healthcare industry? You don't know that healthcare market is actually an Oligopoly and that it is, by definition, impossible to set prices where Marginal Cost = Marginal Revenue? In a normal oligopoly, that would be mean prices would not go up like in a monopoly (Game theory makes it impossible)... and yet, the prices continue to go up because there is something different in how people "buy" a healthcare service:

1. You can't shop for the best price if you are having a heart attack.
2. People don't care what is the price of something if it means it can save their life. Life is priceless (that means, almost no limits in the price in the supply and demand curves).
3. There is a vicious circle that pushes prices up. Hospitals know they can charge high prices from health insurance companies because they have the cash. Health insurance companies then raise the premiums. People pay higher premiums because one illness will ruin you financially in this country. Then the health insurance has more cash and the hospital can charge a higher price next month.
4. healthcare is inelastic.

Hospital -> Health insurance company -> people -> Hospital .

This is what makes it unique. Other countries have opted for basically taking control of healthcare altogether, like Canada or some european countries. That will never happen here of course, but that will show you that even in some other countries or in Europe, where they also have outstanding economists, even they couldn't find a good alternative to adding rate of return limits or eliminating private healthcare. As for the patent abuse... if someone comes up with a patent and they charge the highest price possible, that means they are maximizing profit (Marginal cost = Marginal Revenue)... basics of monopoly. Yes, that means less people can buy these medicines and medical devices, but if you touch that patent law, inventors will simply go to another country and patent it there. If I had made a patent and the U.S starts putting a rate of return (specifically on patent law) then I would simply take my patent to Europe and they will protect there for several years as well. Then I bring it to the U.S and charge whatever I want just the same. So, you are right there is abuse, but that's how patent law works worldwide and it cannot be evaded by simply changing the law in the U.S.

as for the taxes thing.... you are entitled to your opinion. If you think it is not morally correct, ok then. And if people want no taxes on medical devices, then ok... but it's not going to change anything anyway. It was made into a big issue for nothing. And if people don't want to pay more taxes, the Fed will have no other choice than to continue with an inflationary policy to pay for the trillions in debt. It's either taxes, or inflation. Basics of macro. This also shows us how deep in trouble the U.S economy is in regards to debt. People think you can have no taxes and no inflation... with that debt, the government has to choose. I don't want to sound like a showoff and I didn't want to get into detail others don't understand, but you asked me ok? I hope my explanations make some sense to you since you studied macro too....

Excellent. You understand WHAT an oligopoly is. Now ask WHY is it an oligopoly? Usually oligopolies exist when there are huge barriers to market entry, like capital expenditure or government sponsorship/approval. Rarely is R&D able to create this kind of market. R&D barriers almost always lead to a short monopoly until others divine the secrets of a product. This provides a short lead and usually a market leader but not an oligopoly. Health care is a market where nearly all R&D is conducted in the open with multiple peer reviewed research findings. Where federal mandate requires strenuous and transparent testing of products and procedures before profit making is allowed. What enables private companies to hold the market in their hands? As an aside, it is almost funny that these companies would prefer to conduct product trials in other countries due to favorable laws regarding litigation and disclosure and then patent the products in the U.S. where they can enjoy the most protection for product manufacture and sales. I submit that vigorous patent enforcement coupled with patent evergreening and other abuse is the ultimate cause of the different oligopolies in the Health Care sector. Also, changing the patent laws of the U.S. would necessarily require a change in how we respect patent laws of other countries and that WOULD affect prices in the U.S. market.

Next, review your numbered list with me.
I''ll accept point number one, though many people will ask to be taken to a particular hospital during an emergency and that actually IS shopping around.
Points 2 and 3 are incredibly superficial, but typical of average work. Check the logic flows of the two statements. Whether a person would pay any amount or not for a product or service, it does not mean that they can. Less than 5% of patients have liquid assets great enough to pay for even the most minor surgical procedure. Now proceed to your point number 3. Re-look at the cycle you describe. The key parts to your two-cycle engine are insurance companies and hospitals. Now take a couple of minutes and review the history of these institutions and how they are what they are today. motivation and exploitation Soon health insurance becomes the source of funds for medical service instead of the individual patient and so dies the normal fee-for-service health care market in the U.S.

The fuel for this engine is massive amounts of people buying health insurance plans that pay for everything with no out of pocket costs. (back in the 80's every auto union member had one of these plans) Or even better, large corporations paying for it as a benefit of employment or retirement. How did key players exploit this new motive power in the market? What is the natural market doing to correct the exploitation?

Your number 4 is DEAD WRONG. Healthcare IS elastic. It's stretched to the breaking point and is about to snap. It's a misfiring engine about to sputter to a stop.

Unless you fuel-inject it with "Obamacare". Increase the amount of money in health insurers pockets by mandating the healthy uninsured purchase health insurance, mandate all services be covered and no one can be denied. Don't fix the underlying problems of a market sector badly managed and make the problem worse because your political doctrine claims it will work.

Regarding taxes, the morality of taxes is not an opinion, it is an objective Truth. The weight you credit such an immoral discretion IS of course subjective. As I said we trade those moral transgressions for benefits they may afford. You fail to realize that the government has revenue sources other than direct or indirect taxes. Your neglect the most fundamental first step to paying off debt, stop spending more than you take in in revenue. Cut that spending even further to payback debt and interest. Introduce a currency buy back to reduce the inevitable inflation a more stable economy will cause...

Even if you assign no moral weight to taxes, consider them evil in any economic structure you would evaluate. Trust me they are the least desirable funding source for any policy or plan and can often do more harm than any possible benefit could offset.

[CommanderOtto]

I have class now so I can't respond everything.... but although healthcare has some level of elasticity, it is VERY inelastic. Are you going to say oil is elastic too?

[Bryant]

So you are saying, It isn't the nature of the healthcare industry? You don't know that healthcare market is actually an Oligopoly and that it is, by definition, impossible to set prices where Marginal Cost = Marginal Revenue? In a normal oligopoly, that would be mean prices would not go up like in a monopoly (Game theory makes it impossible)... and yet, the prices continue to go up because there is something different in how people "buy" a healthcare service:

1. You can't shop for the best price if you are having a heart attack.
2. People don't care what is the price of something if it means it can save their life. Life is priceless (that means, almost no limits in the price in the supply and demand curves).
3. There is a vicious circle that pushes prices up. Hospitals know they can charge high prices from health insurance companies because they have the cash. Health insurance companies then raise the premiums. People pay higher premiums because one illness will ruin you financially in this country. Then the health insurance has more cash and the hospital can charge a higher price next month.
4. healthcare is inelastic.

Hospital -> Health insurance company -> people -> Hospital .

This is what makes it unique. Other countries have opted for basically taking control of healthcare altogether, like Canada or some european countries. That will never happen here of course, but that will show you that even in some other countries or in Europe, where they also have outstanding economists, even they couldn't find a good alternative to adding rate of return limits or eliminating private healthcare.

As for the patent abuse... if someone comes up with a patent and they charge the highest price possible, that means they are maximizing profit (Marginal cost = Marginal Revenue)... basics of monopoly. Yes, that means less people can buy these medicines and medical devices, but if you touch that patent law, inventors will simply go to another country and patent it there. If I had made a patent and the U.S starts putting a rate of return (specifically on patent law) then I would simply take my patent to Europe and they will protect there for several years as well. Then I bring it to the U.S and charge whatever I want just the same. Or maybe it might be worse. If the U.S changes patent law here, people put the patent abroad because they have less confidence in patent law in the U.S. Then they simply sell lesser quality drugs or medical devices and only sell the new innovative products in the countries that actually protect them (so basically, less quality care in the U.S). So, you are right there is abuse, but that's how patent law works worldwide and it cannot be evaded by simply changing the law in the U.S.

as for the taxes thing.... you are entitled to your opinion. If you think it is not morally correct, ok then. And if people want no taxes on medical devices, then ok... but it's not going to change anything anyway. Prices will continue to go up.... and with the new laws that force everyone into insurance, that will shift the demand curve to the right (price X quantity)... so they will win more money and the tax is simply to reduce that excessive revenue they will gain with the new laws. It was made into a big issue for nothing. And if people don't want to pay more taxes, the Fed will have no other choice than to continue with an inflationary policy to pay for the trillions in debt. It's either taxes, or inflation. Basics of macro. This also shows us how deep in trouble the U.S economy is in regards to debt. People think you can have no taxes and no inflation... with that debt, the government has to choose. I don't want to sound like a showoff and I didn't want to get into detail others don't understand, but you asked me ok? I hope my explanations make some sense to you since you studied macro too...



.... lol, I hope someone understood the joke ...

I'm only really half in this debate now, but I wanted to add a few things:

1. You mentioned that you can't shop around when you're having a heart attack. While that is certainly true, I would bet that the majority of healthcare involves non-urgent/(urgent but not life threatening) services.

2. There is more than one cycle. For example, insurance companies are no doubt pushing people to use Urgent Care/Walk-in Clinics (which have been vastly increasing in the last 5 years) instead of general hospitals, because the prices are drastically less. This drives business away from the hospital, and is in the opposite direction of the cycle you show.

3. When there is big profit to be had, then historically that also means much competition will develop. Right now (looking toward my own area), small urgent care facilities are taking advantage of this. In my small town, there are a least 5 that I can get too reasonably. Most of this has sprung up recently with big companies like Walgreens, CVS, and walmart getting involved. This has taken effect first with the area of highest cost: ER. Why can't this happen with more hospital services(not saying it will be easy, or that there are not ways to help it happen)? Allowing competition of insurance companies across state-lines could help do the same for insurance.

3.5(added by edit). Given you description of healthcare, shouldn't food also be an inelastic market with costs that are driven up? I'm by no means an expert on food history, but I would guess that there would be something to learn there.

4. You say that "that will never happen here" when referring to a complete govnerment take-over. Yet the progressives in power have said time and again that Obamacare is just a stepping stone to that. You're also assuming that economists somehow have a deciding factor into how those European countries are run...It is always politics and money for themselves. In the UK for example, one political party added some hospitals, and then when the other got in power they began to close those down.

5. Regarding patents: I'm not sure the extent to what is being discussed, but there are some flaws with patent laws. The biggest one recently was with Apple and Samsung. Apple got awarded $1 billion because they had a patent of a "rectangle with rounded edges". That patent should have never been given, it is not unique or unobvious, and I'm sure there were many similar devices before it.

6. Dread's views on taxation are simply an extension of the social contract with the government (which is widely accepted, I think either you or I one are confused on Dread's view). Taxation is bad because it takes from you willingly or unwillingly. Taxation is necessary though, and acts through the social contract. It is part of the trade, one of the liberties given up to ensure others. It's all about compromise. It is unmistakeably bad (having your belongings taken from you), but it may be a price worth paying.

7. "It is either taxation or inflation". This is wrong, there is also spending less. Again this goes back to that social contract. What are you willing to give up, and what will you get in return? Do you want to choose what you do with your money, or have it chosen for you? Keep in mind that our government has proven itself time and again to be the most inefficient 'business' in the country. On top of that, private companies always have the government watching over there shoulders, but who will watch over the government?

8. Goes along with 7. All sources of power are corrupt, the government, being the largest, is thus the most corrupt. Politicians will always choose to 'give stuff' to voters in exchange for votes, and 'tax the unfavorable' like businesses - when all that does is indirectly tax the people.

[ProfessorDreadNaught]

I have class now so I can't respond everything.... but although healthcare has some level of elasticity, it is VERY inelastic. Are you going to say oil is elastic too?

I'm saying if you read the history link i buried in my post, you'll find that the market has changed over a 50 year period (which is a short time for the world's second oldest profession -medicine man) and has reached a point of clear retraction so severe it may collapse. Since 2000, so many people have given up trying to keep up with rising health insurance costs the insurance market is on the brink of collapse. If liberal idiots weren't so keen on fixing the sneeze instead of the disease we'd see a return of fee for service options and affordable prices. Charity cases would receive charity and preventative / personal health maintenance would be highly valued.