Second Part of Richard’s NNN Interview

April 21, 2008

Part 2 - Compare and Contrast

Read Part 1 Here

At the debate you talked about how the competition provided by the free market was responsible for the quality of some of the care you received in the public system at the VA. How do you think this balance should apply to the health care system as a whole? What is the proper role for the free market, and when should the government step in?

In a free market economy, the role of a government is not to compete in the free market but to regulate it. That’s opposed to a socialist or a communist or what is known in economics as a “centrally planned” economy, where the governmnet makes all the decisions about what we produce, how we produce and who gets to consume it. In a free market, the market decides that, so the government’s role then is to regulate it and make sure it’s operating efficiently.

So would you be opposed to the government offering a national plan as an alternative to private plans?

No, not at all… as long as it makes sense, if it’s run efficiently then that would be a great alternative which would actually help competition, and I think that’s great. I think we need to have competition across the board. With doctors we should look at expanding medical schools and universities and actually create more doctors, we should expand the number of hospitals that we have and get them competing… but in a healthy, safe, regulated way, that’s really the key. Also key to understanding this, to have a free market running efficiently, you have to have what’s known as no external benefits and no external costs. In other words, you have to reap all the benefits of your decision, and you have to suffer all the costs. This is crucial to running a business. And what I’m afraid of happening, which government has kind of left out of the regulation part, is that businesses have been able to pass their costs off to others.

You have to understand how insurance works. When you buy health insurance you’re betting that you’ll get sick, and the company is betting that you won’t. Now if you do get sick they’re going to offset the costs with all they people they have that don’t get sick. If you don’t get sick, you’re better off not having health insurance because it’s money you don’t have to spend every month. But what we’ve seen happen, and I think this is what’s turned a lot of people off the free market approach, is that the insurance company makes this bet that you won’t get sick, and then when you do get sick they have all these exclusions where they say ‘oh, we don’t have to pay for this or we’re going to drop you because it’s too expensive’… so they’re externalizing their costs, and that’s where the government has to come in and say ‘no,no,no, you made a bet with them… they got sick, and now you’ve got to pay for them…’

The other issue that’s come up in the presidential contest is the question of individual mandates. How do you feel about that proposal?

I think we’re very fortunate that Massachusettes has taken the bold step on that and is kind of taking the experiment, so what I think we should do is wait a little bit, evaluate that system, see how it worked, and then if it worked very well then maybe we should apply that nationally. If it doesn’t work, then we should certainly not implement it. So I think that we’re very fortunate that they’re trying it out and we just need to watch it and observe it and see how it plays out.

What are the differences between your proposal and the Esch health care plan?

My plan is one that gets everybody health care coverage, it’s one that actually tries to lower costs. One of the big problems is that health care costs are so high that they’re probably doubled in the last ten years, they’ve increased four times as much as people’s real wages. I’ve tried to propose policies that would actually lower those costs through the competitive process I described, , where some of these other plans that are out there people talk about just taking that cost and having the government pay for it. But how do we get the government to pay it when we’ve already got a 500 billion dollar deficit?I still want to insure there is a public heath care system and feel that we should increase funding for the current system. But what is very upsetting for me, is you know me and Jim talked about his plan to kind of have this national health care… the next words out of his mouth were the things he was going to reduce, and it wasn’t costs, it was the benefits you would receive. He’d reduce the number of MRI machines, and he said that too many people are taking pills. Well I’d like to remind him that those pills were prescribed by licensed physicians who went to medical school, not by lawyers… we don’t need Washington politicians and lawyers and bureacrats determining the care for patients, and that’s what will happen under his plan. So that’s where we’re greatly different.

Going back to the debate, I think what Jim was saying was that one of the problems with the free market system right now is that it’s creating incentives that aren’t necessarily in the patients’ best interests. So we’ve got these overly aggressive drug companies trying to push their new product with doctors, and we have hospitals that have an incentive to always say ‘we’ve got the newest and best equipment, so you should use our services instead,’ etc. Do you think there are some valid points there?

No, not at all. I want to go to the hospital that has the newest equipment, and that’s what competition is all about… I want to go to the hospital that has the latest and greatest equipment, and I want everybody else to. Not just the rich, because I’m not the rich. [laughs] This year I’ll make $28,000 working for Metro, you know, so I would proudly go to the hospital that has the latest and greatest equipment.Talk about removing MRI machines, you know, there’s already a waiting period to get an MRI, so that means there’s probably a shortage. And hospitals absolutely have to have those because people that come in with an emergency situations where doctors need to see if there’s internal bleeding or some kind of damage, brain swelling or whatever… and making them wait for those or having to transfer them across town to a hospital that has an MRI, that’s going to cost lives. So that is absolutely something we can’t do. I’m very concerned with that, I don’t think it’s a valid point.

And we can talk about, when it comes to regulation, looking at the drug companies and making sure that everything they’re doing is honest and legit. We should be doing that, we shouldn’t be letting them have free reign. But if they’re trying to sell drugs that people don’t need, then the doctors won’t prescribe them, and this notion that they’re tricking the doctors or something, you know, doctors are very smart people and I think they would see through that. Some people get upset because maybe there’s five or six different medications to lower cholesterol, but ultimately that’s a good thing because some medicines might work better for some individuals. The human body’s different, and what works for one person doesn’t always work for another, so it’s good to have all those different pills so the doctor can decide which one works best for your body. I do not want to eliminate those, and what I think Jim is talking about there is another example where I just don’t think Jim understands the medical field. He needs to talk to some doctors.

I guess the other point of distinction that our commenters have really grabbed on to is the Social Security question -

Yeah, and I really want to talk about that one because once again I think this is Jim’s lack of experience or knowledge, he just doesn’t know how Social Security works. He said ‘I don’t know why it’s capped at $90,000, and if anybody could explain that to me, you know, I don’t think anybody can.’ And my response was: Jim, I’ll explain it to you.The reason why is that Social Security was designed to be a basic pension plan. However, it wasn’t allowed to stay that way. You’re not going to draw benefits over the $90,000, so if you get taxes over that $90,000 you’ll never recoup that money. This was a plan for individuals, and so there was no need to tax over that. Plus, there was plenty of money in the system without taxing those people, the reason why they need more money now is because the way the budget process works is that they take all the money they have and they put it in the general pot. And then they spend out of that general pot for all their other budget proposals.

So they have the budget proposal and they say ‘yup, this is what the budget’s going to be’ and then all the revenue comes in and they just take from that. With the exception of just three years out of the last forty, there’s been less in the pot then they’ve had for expenditures. So all the taxes they bring in, taxes on tobacco and firearms and alcohol and gasoline and the estate tax and import taxes and things like that… those all go in the general pot. If you would leave the money that’s being drawn out for Social Security in a separate fund, protected, there would be more than a sufficient amount to cover payouts for the program. Because historically there’s always been more people paying in than taking out, and that’s still true today, and there would be plenty of money in there that could still be used to make the system solvent.

Jim will raise the age requirement and tax level, and that if you keep spending the social security tax revenue on other budget expenditures there will never be enough money for Social Security. You will just have to keep raising the age and tax levels.

Second Part of Richard’s NNN Interview

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