Why A Government Run Market Can’t Work

First we have to accept that there is no perfect system possible. People are people, for good and ill. All we have to work with are incentives.

People who gravitate towards working for, with, or through government almost all have an urge to power, to control what people do. Whatever area of power a government is authorised to operate upon, the boundaries of that area will do nothing but grow ... and grow and grow.

People who do not pay for what they get almost always abuse and/or overuse it, no matter how vital or trivial. Anytime you give something to people for "free," they will never say they've got enough of it. There will always be a demand for more.

Everyone as a buyer wants to get the most they can for the lowest cost. Everyone as a seller wants to get the most money they can for what they sell.

People also tend to be caring, to be generous when they can afford to be, to think they are doing good, not only for themselves, but for the people they care about and even people in general. But people think they know more and are more competent than they really are. They tend to oversimplify the complex and make the simple complicated. Either that or abdicate the authority to choose for themselves to those they deem smarter, more powerful, and better informed than they are. However, no one can know more or can be more concerned about any individual's needs, wants, and desires and how much they value what things, in what proportion, than that person themselves.

While there are always exceptions for every rule about human nature, these are pretty near universally true.

Anything that you try to set up that doesn't take *all* of these into account is going to fail to achieve its stated ends. It will do too much or too little. It will result in the wrong things being done at the wrong times done by the wrong people with wrong information. No one will be happy with the results.

Top down, command and control, never works in the long run. Even in the military, which comes closest, the best structure delegates detailed decision making to the lowest level possible, to the ones with the most knowledge about the actual situation at that specific place and time in the context of the operational goals.

Micromanagers at the top in the military get a lot of people killed. Micromanagers in any large organization waste assets and misdirect efforts, whether it's in a government bureaucracy or a company. They simply *cannot* know enough to make the best decisions for others. No one, even with the most powerful computer and big data, can. It's hubris to think otherwise.

The best system to get the most good for the greatest number is no system at all. To let those who know their own situation best make the decisions. Who know what they value and how much and what their own personal goals are.

Then use the general benevolence of people help those who cannot help themselves. Their desire to maximize their gains, even in the emotional sense, is tempered by wanting to get the most for their time and money and so weed out the grifters. To decide for themselves which charity is doing the most good in the particular area they care about with what they are given, which means low overhead and minimal waste.

Government, by its very nature, cannot be efficient. It cannot take individual situations into account. It cannot change directions swiftly under changing conditions. It cannot operate under anything but bureaucratic structures with all the power grabbing fiefdoms and resource wasting procedures that it inevitably results in.

To try to put something important under the control of a system that ostensibly tries, but simply cannot be, all things to all people, while wasting valuable and scarce resources in people, facilities, and money is an incredibly bad choice.

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Health Care Redux

Health insurance isn't health care. We've linked together two systems that really don't have anything to do with one another. Insurance is financial risk management based on risk pools and statistical analysis. Health care is what goes on between you and medical professionals. The only link is who writes the actual checks to whom.

Over the last 70 years, since allowing companies to offer pre-tax comprehensive health "insurance" as a benefit in a period of wartime wage and price freezes, the two have become so entangled that most people think they're the same thing.

The big companies that offered it during WWII were highly unionized and the unions, in their post war heyday, found it to be a popular bargaining tool. Still, it took over 20 years for it to start making its way into being a general employment benefit outside of union jobs.

Then we had the whole Social Security/Medicare mashup. Social Security was promoted as the equivalent of a retirement account that you were "owed" a return from. With plenty of workers and retirement ages not long past expected lifespans it was a cheap way to get more tax money (No - you don't have any legal right to one penny of SS. If Congress were to end it tomorrow, we're just out of luck).

Tacking on Medicare was just another way to take care of dear old Mom and Dad. It was touted as being the same as insurance. But it wasn't and isn't.

In the early days, just like SS, there were lots of people paying in and only a few taking out. They could afford to cover more and more things. It didn't hurt that the most consistent voting demographic is retirees either. Geriatrics was *the* medical specialty to go into.

But then reality started catching up. The population bulge passed. More expensive and better treatments were extending lifetimes far past what had been the case initially and that cost estimates were predicated on.

Then we added Medicaid as part of the "Great Society" and "War on Poverty" programs. The claim was that if we just spent enough money on taking care of everyone in poverty now, when they needed it, we would get them over their problem time and then they would no longer need assistance. Problem solved. The end of poverty. Needless to say, that didn't work either.

By the 90's over half of all medical costs were being paid directly by the government at various levels. Most of the rest was being paid by insurance company third parties. Almost no one paid for medical care out of their own pockets. And if you're not paying for something, you use a whole lot more of it and don't even bother asking the price, because, who cares, you're not paying for it anyway.

Over the same time span malpractice awards went astronomical. Anything less than a perfect outcome was grounds for a lawsuit. Since the lawyers took a percentage of the payout instead of having to pay them up front, we had another component where people weren't having to pay anything out of their own pocket. Juries know it's the big bad insurance companies that would have to pay, so huge settlements became the norm. My OB/GYN in the mid 80's was paying half of his *gross* for malpractice insurance because babies and pregnant women were especially favored for big jury settlements.

Then the third leg also kicks in ... So much money was being paid out to medical professionals (rightly or, in too many cases, wrongly) both the government and insurance companies started digging in their heels and denying claims on any basis they could find so they didn't have to raise premiums and taxes even higher. Doctors started spending as much or more time on paperwork as actually treating patients. Office staff levels exploded as did clerical workers at the insurance companies and government workers.

All of this additional expense has absolutely nothing to do with the actual delivery of health care, yet it all has to be charged as such. Is it any wonder that health care costs have exploded? Bloat and waste everywhere you look, all supported by what is called the generic health care "system."

The current course is unsustainable, but no one wants to go through the the time it would take to re-tool the whole mess. Free clinics and charity hospitals aren't going to immediately open up the day Medicaid ends. Voting seniors aren't going to give up their benefits willingly. Medical specialists won't be happy to see their clientele shrink. Doctors won't immediately go back to doing more pro bono work. Armies of clerical workers aren't going to be happy to find their services are no longer needed. Lawyers, especially lawyers, wouldn't be at all happy with what tort reform would do to their bottom line (and lawyers are, by far and away, the most common original profession of politicians).

There are no good solutions. One way or another there are going to be some really tough times ahead when it come to "the health care system."

People are going to get hurt. Those who lose their cushy jobs or benefits and those who can no longer get the timely care, if at all, they need, or some combination of the above, during the changeover in a return to a free market.

Otherwise it will be a loss of some cushy jobs and benefits and those who can no longer get the timely care, if at all, they need or some combination of the above from that point on if the government takes full control and resorts to rationing, which they've already admitted would have to happen and has and is happening elsewhere.

At least the first option has an end in sight. The latter doesn't.

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