Here is a link to my latest article...
http://www.morningsun.net/community_opinions/x2090110471/Oil-Housing-and-Health-Care
Tuesday, September 16, 2008
Monday, July 21, 2008
Updated Post...more goodness
There is a little dark secret that is sitting in the background behind the rise of the price of oil, the falling dollar and its inflationary consequences.
When the dollar falls against other currencies, it literally costs more dollars to purchase goods from other countries. That means that if you are looking to buy a BMW, for example, it will cost more dollars if the dollar falls against the euro and it will cost less if the dollar rises against the euro. The same is true of all foreign goods, including oil.
Why is the dollar falling? A very big reason for this is the housing credit crunch that we are currently going through. The Federal Reserve’s response to this is an effort to prevent a 'financial meltdown' by lowering interest rates and increasing the amount of dollars in the system. The problem with this approach is twofold. First, the Fed’s manipulation of interest rates is the source of flawed market signals in the first place. Lowering them further will only result in additional loans to those who could not afford them under normal circumstances, and therefore potentially more defaults. On top of that, more dollars always equals higher inflation.
A huge part of the credit crisis in this country is because of the incentives created by exactly such tinkering with the market. The individuals that were issuing the loans had very little incentive, if any, to ensure that the borrowers were actually credit worthy. Instead, they had the incentive to ‘churn and burn’ as many loans as possible. The buyers of these loans were eager to get as many loans as possible because a large pooled loan market existed. Once the markets stopped buying these ‘sub-prime’ loans and the originator of the loans started closing shop, however, a situation developed where a lot of credit was issued on assets that were not retaining their value on the open market. A credit crisis, in other words.
As is too often the case, the government’s response to a crisis created by market intervention is more intervention. Instead of letting the markets run the Fed has stepped in and lowered rates in order to 'soften the blow' of the imploding housing market it fostered.
This involvement by the Fed has serious consequences. One of these is the rise of oil prices. Granted, the rise of oil prices is not to be completely blamed on a weak dollar because other factors such as growing demand and limited supply play significant roles in our current situation.
The market has no emotion and action taken to off-set a market correction of government manipulation will be amplified in a different sector. If the market’s attempts to rectify previous errors is prevented from following its course, then the problem will only grow worse. In the case of the Fed’s response to the housing crisis, the supposed “solution” will further hamper growth and productivity across the market.
Health care is another example of where the government’s efforts to give us something for nothing will only backfire. As in the housing market, if the incentives in the health care industry are not aligned toward what market signals indicate, the results will be catastrophic. In the case of universal coverage, for instance, the perverse side effect will likely be that while coverage may exist for all, it will be at the expense of both the quality of and access to care. Just as the market could not support individuals that made $80,000 a year purchasing a million dollar home, the market will not be able to support free health care for all.
Many will comment that the rising price of oil, the housing credit crunch, and health care are independent of each other in terms of scope. However, it is my opinion that they all represent the same common flaw that is creeping into our society; a theme that resonates a tune of everyone is the victim and the only entity that can save us is the government. The cries for justice scream out when individuals feel victimized at the gas pump because their SUV manages a measly 8 miles to the gallon. Mobs rally demanding justice when their interest only non-conforming mortgages begins to rebound from historic lows believing that evil men in suits are putting the screws on their over leveraged self indulging lives. Those very faceless individuals suffering from type II diabetes that they propagated with each piece of candy or bowl of ice cream that they have convinced themselves they had earned have developed an entitlement that access to the wonders of modern medicine as their right.
All three of these examples exist in today’s society because the incentives of individuals are not aligned for a long-term efficient solution leaving a violent market correction and its rippling effects land soundly on the shoulders of the tax paying worker bee in the form of government instead of leaving it in the hands of the individual. The market if allowed to run its course will always find the most efficient solution over time. In the short-term markets may behave irrational and violently with great opportunities for tremendous gain and gigantic loss but in the long run the market with be a smooth slope that at a distance masks any dramatic changes. Unfortunately, we as a society have decided that we only want markets to run efficiently when tremendous gain is to be made and when the ‘bottom begins to fall out’ we look at the government to save us; creating a solution where benefits of long term market solutions are squeezed.
Healthcare unlike my other two examples provides and even more dramatic situation because of the fear stigma associated with individuals ‘going with out’ care could end up dead and as a civilized society we have decided we cannot allow for that to happen. Therefore, it is even more important that as a society we create an environment where individuals have the incentive to not only to take an interest, may it purely be a financial interest, in their health and well-being as well as cater to those individuals who are advancing the achievements of modern medicine. For example, American medicine has reached such a point of achievement because of a mentality of ‘doing well by doing good’ that huge medical crisis engulfs this country because individuals are obese (only in America where as a society we have so much wealth that the lower classes have a higher percentage of obesity which is tribute to our countries success and excess) and require a tremendous amount of resource from the medical system to maintain a life that allows for them to continue to over eat with little to none acceptance of personal responsibility for their current situation. Our duly elected officials present this infection of victimization as a problem that can only be addressed by more government interference that requires price controls and what will become rationing in a socialized system. One just has to look to our neighbors to the north and south to see what ill effects a socialized healthcare system will mean for the very ‘public’ is was initially installed to serve and ‘protect.’ For better or worse all living creatures require incentive to do anything; for example, a squirrel is incentives to bury acorns for the coming winter to survive for humans we have evolved to value pieces of paper with dead leaders printed on the front to embody our motivation. Individuals that enter the healthcare industry may they be nurses, doctors, chemists, and/or large entities filled with individuals that spend their lives developing medical solutions with the goal of ‘doing well by doing good,’ should be given the proper incentives through market forces to compete to deliver new and more efficient solutions to the marketplace that will improve the quality of life not just in this country but on this planet and be financial rewarded as determined by the market for what they produce. However, we are constantly being told that it isn’t ‘fair’ the cost of a life saving drug and it isn’t fair that a physician who went to school well into their thirties and have dedicated their lives to saving others earns a six figure salary yet we are quick to accept that actors and professional athletes who exist to entertain command seven, eight, and even nine figure pay days. I enjoy watching baseball and has a believer in the wisdom of markets relish in the fact that a man can make hundreds of millions of dollars to play a game, which I accept as an individual because that ball player can command such a payday because he has a skill the market has deemed to be worthy of such financial reward but we are quick to put a cheap value on life when we cry out that a ER doctor’s pay should be regulated by an independent third party; I would love to see that doctor try to hit a change-up but I would hate to witness that ballplayer scramble to save an eight year old child suffering from multiply gun shot wounds; we claim we should not put a value on life but we as a society we constantly discount it through inefficient third party intervention.
In a free society choices need to be directed by the choices made by the individual and with those choices consequences must be allowed to run there coarse. The role of government should remain as the great referrer only to protect the integrity of the markets but never deciding the out come of the ‘game’ being played.
“Those that are quick to sign away their freedoms for a since of security…loose both” ~Cato the Elder
The housing crunch and possibly the oil crisis should serve as a sobering reminder of what we may yet see in the health care sector should plans for universal coverage move forward. The American Dream may be everyone owning their own home, but the American nightmare could easily be foreclosures to access to needed care.
When the dollar falls against other currencies, it literally costs more dollars to purchase goods from other countries. That means that if you are looking to buy a BMW, for example, it will cost more dollars if the dollar falls against the euro and it will cost less if the dollar rises against the euro. The same is true of all foreign goods, including oil.
Why is the dollar falling? A very big reason for this is the housing credit crunch that we are currently going through. The Federal Reserve’s response to this is an effort to prevent a 'financial meltdown' by lowering interest rates and increasing the amount of dollars in the system. The problem with this approach is twofold. First, the Fed’s manipulation of interest rates is the source of flawed market signals in the first place. Lowering them further will only result in additional loans to those who could not afford them under normal circumstances, and therefore potentially more defaults. On top of that, more dollars always equals higher inflation.
A huge part of the credit crisis in this country is because of the incentives created by exactly such tinkering with the market. The individuals that were issuing the loans had very little incentive, if any, to ensure that the borrowers were actually credit worthy. Instead, they had the incentive to ‘churn and burn’ as many loans as possible. The buyers of these loans were eager to get as many loans as possible because a large pooled loan market existed. Once the markets stopped buying these ‘sub-prime’ loans and the originator of the loans started closing shop, however, a situation developed where a lot of credit was issued on assets that were not retaining their value on the open market. A credit crisis, in other words.
As is too often the case, the government’s response to a crisis created by market intervention is more intervention. Instead of letting the markets run the Fed has stepped in and lowered rates in order to 'soften the blow' of the imploding housing market it fostered.
This involvement by the Fed has serious consequences. One of these is the rise of oil prices. Granted, the rise of oil prices is not to be completely blamed on a weak dollar because other factors such as growing demand and limited supply play significant roles in our current situation.
The market has no emotion and action taken to off-set a market correction of government manipulation will be amplified in a different sector. If the market’s attempts to rectify previous errors is prevented from following its course, then the problem will only grow worse. In the case of the Fed’s response to the housing crisis, the supposed “solution” will further hamper growth and productivity across the market.
Health care is another example of where the government’s efforts to give us something for nothing will only backfire. As in the housing market, if the incentives in the health care industry are not aligned toward what market signals indicate, the results will be catastrophic. In the case of universal coverage, for instance, the perverse side effect will likely be that while coverage may exist for all, it will be at the expense of both the quality of and access to care. Just as the market could not support individuals that made $80,000 a year purchasing a million dollar home, the market will not be able to support free health care for all.
Many will comment that the rising price of oil, the housing credit crunch, and health care are independent of each other in terms of scope. However, it is my opinion that they all represent the same common flaw that is creeping into our society; a theme that resonates a tune of everyone is the victim and the only entity that can save us is the government. The cries for justice scream out when individuals feel victimized at the gas pump because their SUV manages a measly 8 miles to the gallon. Mobs rally demanding justice when their interest only non-conforming mortgages begins to rebound from historic lows believing that evil men in suits are putting the screws on their over leveraged self indulging lives. Those very faceless individuals suffering from type II diabetes that they propagated with each piece of candy or bowl of ice cream that they have convinced themselves they had earned have developed an entitlement that access to the wonders of modern medicine as their right.
All three of these examples exist in today’s society because the incentives of individuals are not aligned for a long-term efficient solution leaving a violent market correction and its rippling effects land soundly on the shoulders of the tax paying worker bee in the form of government instead of leaving it in the hands of the individual. The market if allowed to run its course will always find the most efficient solution over time. In the short-term markets may behave irrational and violently with great opportunities for tremendous gain and gigantic loss but in the long run the market with be a smooth slope that at a distance masks any dramatic changes. Unfortunately, we as a society have decided that we only want markets to run efficiently when tremendous gain is to be made and when the ‘bottom begins to fall out’ we look at the government to save us; creating a solution where benefits of long term market solutions are squeezed.
Healthcare unlike my other two examples provides and even more dramatic situation because of the fear stigma associated with individuals ‘going with out’ care could end up dead and as a civilized society we have decided we cannot allow for that to happen. Therefore, it is even more important that as a society we create an environment where individuals have the incentive to not only to take an interest, may it purely be a financial interest, in their health and well-being as well as cater to those individuals who are advancing the achievements of modern medicine. For example, American medicine has reached such a point of achievement because of a mentality of ‘doing well by doing good’ that huge medical crisis engulfs this country because individuals are obese (only in America where as a society we have so much wealth that the lower classes have a higher percentage of obesity which is tribute to our countries success and excess) and require a tremendous amount of resource from the medical system to maintain a life that allows for them to continue to over eat with little to none acceptance of personal responsibility for their current situation. Our duly elected officials present this infection of victimization as a problem that can only be addressed by more government interference that requires price controls and what will become rationing in a socialized system. One just has to look to our neighbors to the north and south to see what ill effects a socialized healthcare system will mean for the very ‘public’ is was initially installed to serve and ‘protect.’ For better or worse all living creatures require incentive to do anything; for example, a squirrel is incentives to bury acorns for the coming winter to survive for humans we have evolved to value pieces of paper with dead leaders printed on the front to embody our motivation. Individuals that enter the healthcare industry may they be nurses, doctors, chemists, and/or large entities filled with individuals that spend their lives developing medical solutions with the goal of ‘doing well by doing good,’ should be given the proper incentives through market forces to compete to deliver new and more efficient solutions to the marketplace that will improve the quality of life not just in this country but on this planet and be financial rewarded as determined by the market for what they produce. However, we are constantly being told that it isn’t ‘fair’ the cost of a life saving drug and it isn’t fair that a physician who went to school well into their thirties and have dedicated their lives to saving others earns a six figure salary yet we are quick to accept that actors and professional athletes who exist to entertain command seven, eight, and even nine figure pay days. I enjoy watching baseball and has a believer in the wisdom of markets relish in the fact that a man can make hundreds of millions of dollars to play a game, which I accept as an individual because that ball player can command such a payday because he has a skill the market has deemed to be worthy of such financial reward but we are quick to put a cheap value on life when we cry out that a ER doctor’s pay should be regulated by an independent third party; I would love to see that doctor try to hit a change-up but I would hate to witness that ballplayer scramble to save an eight year old child suffering from multiply gun shot wounds; we claim we should not put a value on life but we as a society we constantly discount it through inefficient third party intervention.
In a free society choices need to be directed by the choices made by the individual and with those choices consequences must be allowed to run there coarse. The role of government should remain as the great referrer only to protect the integrity of the markets but never deciding the out come of the ‘game’ being played.
“Those that are quick to sign away their freedoms for a since of security…loose both” ~Cato the Elder
The housing crunch and possibly the oil crisis should serve as a sobering reminder of what we may yet see in the health care sector should plans for universal coverage move forward. The American Dream may be everyone owning their own home, but the American nightmare could easily be foreclosures to access to needed care.
Monday, May 26, 2008
Oil, housing credit crunch, and health care same story...
There is a little dark secret that is sitting in the background behind the rise of the price of oil, the falling dollar and its inflationary consequences. For example, when the dollar falls against other currencies it literally costs 'more' dollars to purchase goods from other countries. Therefore, if you are looking to buy a BMW it will literally cost more dollars to purchase if the dollar falls against the euro and it will cost 'less' dollars if the dollar rises against the euro. The first step in our discussion revolves around the dollar falling against other currencies creating a situation where foreign goods, including foreign oil, requires 'more' dollars to purchase. Why is the dollar falling? A very big reason for this is the housing/ credit crunch that we are currently going through and the attempt by the Fed to curtail a 'financial meltdown' by lower rates and increasing the amount of dollars in the system; more dollars equals inflation.
A huge part of the credit crisis in this country is because the incentives of those issuing loans and those that were buying the loans, packaging the loans, and then selling them off to investors were not in line. The individuals that were issuing the loans had very little incentive, if any, to actually ensure that the borrowers were actually credit worthy but rather they had the incentive to ‘churn and burn’ as many loans as possible. The buyers of these loans were eager to get as many loans as possible because a large pooled loan market existed; however, once the markets stopped buy these ‘sub-prime’ loans, and the originator of the loans started closing shop a situation was created where a lot of credit was issued on assets that were not retaining their value on the open market aka a credit crisis. Instead of letting the markets run and those ‘that got caught with their hands in the cookie jar’ pay a price the fed has stepped in andlowered rates in order to 'soften the blow' of the housing market imploding. This involvement by the Fed does have consequences, which is being highlighted by the rise of oil. Granted the rise of oil is not to be completely blamed on a weak dollar because other factors, like growing demand, supply not being able to keep up, and the fact that a new refinery has not been built in this country for 20 years all have played vital roles in our current situation.
The market has no emotion and action that is taken to off-set a market correction will be amplified in a different sector. People need to take responsibility for their choices because the alternative will be a solution that will prove to be managed by a select few (in our example the fed) creating a situation where a supposed solution will only hamper growth and productivity (the effects of a central planning authority). Health care is another example of what people have come to believe should be a free indemnity but many fail to realize that if the incentives are not aligned for all involved parties coverage may exist for all at the expense of quality of care/ access to care. The market could not support individuals that made $80k a year in a million dollar house and the market will not be able to support universal free health care for all. The housing crunch and how everyone has reacted to it may only be the preamble to a larger crisis that has the potential of bankrupting this country and creating such a bureaucracy that basic freedoms will be lost in order to the support this system of socialized medicine.
A huge part of the credit crisis in this country is because the incentives of those issuing loans and those that were buying the loans, packaging the loans, and then selling them off to investors were not in line. The individuals that were issuing the loans had very little incentive, if any, to actually ensure that the borrowers were actually credit worthy but rather they had the incentive to ‘churn and burn’ as many loans as possible. The buyers of these loans were eager to get as many loans as possible because a large pooled loan market existed; however, once the markets stopped buy these ‘sub-prime’ loans, and the originator of the loans started closing shop a situation was created where a lot of credit was issued on assets that were not retaining their value on the open market aka a credit crisis. Instead of letting the markets run and those ‘that got caught with their hands in the cookie jar’ pay a price the fed has stepped in andlowered rates in order to 'soften the blow' of the housing market imploding. This involvement by the Fed does have consequences, which is being highlighted by the rise of oil. Granted the rise of oil is not to be completely blamed on a weak dollar because other factors, like growing demand, supply not being able to keep up, and the fact that a new refinery has not been built in this country for 20 years all have played vital roles in our current situation.
The market has no emotion and action that is taken to off-set a market correction will be amplified in a different sector. People need to take responsibility for their choices because the alternative will be a solution that will prove to be managed by a select few (in our example the fed) creating a situation where a supposed solution will only hamper growth and productivity (the effects of a central planning authority). Health care is another example of what people have come to believe should be a free indemnity but many fail to realize that if the incentives are not aligned for all involved parties coverage may exist for all at the expense of quality of care/ access to care. The market could not support individuals that made $80k a year in a million dollar house and the market will not be able to support universal free health care for all. The housing crunch and how everyone has reacted to it may only be the preamble to a larger crisis that has the potential of bankrupting this country and creating such a bureaucracy that basic freedoms will be lost in order to the support this system of socialized medicine.
Tuesday, April 29, 2008
McCain looks to the market for Healthcare help, a WSJ article
http://online.wsj.com/article/SB120947891869752797.html?mod=hpp_us_whats_news
Sunday, April 27, 2008
A nice break down of the basic plans that are being debated...
http://online.wsj.com/article/SB120934133175548483.html?mod=hpp_us_whats_news
Excellent Comments on the recent run at HSAs
http://online.wsj.com/article/SB120909058044243989.html?mod=googlenews_wsj
Friday, April 11, 2008
Becareful what you wish for
Recently, I heard Elizabeth Edwards (Sen. John Edward’s wife) speak on a radio program about her new healthcare blog that she is running that will appear on a website sponsored by the Center for American Progress. Mrs. Edwards is a breast cancer survivor. She has also endorsed Sen. Clinton’s universal health plan on the grounds that Sen. Clinton’s plan will give access to individuals who otherwise would not be able to receive the potentially life saving care.
In theory, socialized medicine or rather a socialized system of government really sounds like a great idea; “everybody will live in harmony and work not for themselves but will work for the greater good.” However, what socialists always seem to forget is that people need incentive to perform. Incentive can take on many forms and does not always have to been tied to a monetary reward; however, money is a great way to package a financially incentive into nice little crisp pieces of paper. The very basis of socialism says that a central planning authority will have the best interests of the collective because the individual only thinks of what is best for the individual; therefore, a socialistic system is more ‘fair.’ The word ‘fair’ is a superficial word that means a lot in terms compromise but very little in practice. For example, in professional sports we are willing to pay athletes based on their skill in a particular sport and by the very nature of randomness, or natural selection, some people are better suited for say basketball then others. An individual that is 6’10 is undoubtedly going to have an advantage over a 5’10 individual, holding everything else equal, in terms of being closer to the 10 foot rim and on average having a greater chance at being successful at the game. Therefore, is it fair that the 6’10 individual happens to be 6’10 and the 5’10 individual is a foot shorter in a game where height can prove to pay huge dividends? Yes, it is not ‘fair’ a central planning society could make this situation 'fair' by requiring the 6’10 individual to play on his knees but would anyone want to pay money to come see two guys play basketball with one guy playing on his knees? Of course, when it comes to professional sports the market is willing to pay copious amounts of money for individuals to play a game, which I am all for as long as the market will allow for such pay checks. Since the paying public wants to see a competitive product the professional sports world is extremely competitive and only the best make it with no regard to what is’ fair.’ A ‘fair’ solution would be extremely boring to watch because you would have to obviously create a situation where anybody and everybody had the opportunity to play leaving very little incentive for individuals to dedicate their lives to the athletic endeavor beyond just a love for the game. In conclusion, life is not ‘fair.’ As a society we need to create an environment where the drive of the individual has only the limits that the individual places on him/herself. The 5’10 individual might not be as tall as the 6’10 individual but through hard work and potential sacrifice he might be able to be more successful then the 6’10 individual in the game of basketball. Individuals need incentive to excel, to improve, and to produce.
An analogy between professional sports and healthcare in the United States may seem like far distant subjects; however, they both share a universal truth: incentive drives behavior. I am happy that Elizabeth Edwards was able to win her battle with breast cancer but I am afraid she is very shortsighted in her endorsement of the HilaryCare Universal Healthcare. Why is it that the United States is the undisputed leader when comes to cancer treatment including the treatment of breast cancer? Why have advancements in medicine predominately evolved out of this country? The answer lies in the very framework of this country’s affiliation with capitalism. The inherit beauty of capitalism is that it aligns the incentives of the individual to produce and when more goods and services are produced more can be distributed. Therefore, Mrs. Edwards was able to win her battle against cancer because thousand of individuals over the years had the incentive to devote their lives to help find treatments for an otherwise deadly disease. The universal coverage that she speaks of may deliver coverage for all but will only produce limiting care, and certainly not the level of care she received, because the same incentives do not exist in socialized systems as they do in capitalistic settings where the individuals not an ‘all knowing’ central planning authority can make decisions based on behavioral stimulation stemming from the motivations/ incentives that drive them. For example, a very good friend of mine grew up in Israeli where they have a socialized national healthcare plan. My friend’s mother even thou she was ‘covered’ under the national plan was not able to receive the needed care and died from the very same disease that Mrs. Edwards defeated and it was not because treatment options were not available at the time of her death but rather the system could not deliver to his mother the needed timeframes/ resources required to save her life.
Healthcare is a touchy subject to discuss because you cannot discuss healthcare without talking about people’s lives but it is a fact that the great advancements that this country has spearheaded is correlated to the work of countless individuals that dedicated their lives to discovering new medical advancements. The individuals dedicated their lives to medicine because they wanted to make a difference but assuming that they would do it gratis is a huge miscalculation; these individuals, as would anyone, should be able ‘to do well by doing good.’ Modern Medicine is very expense. The resources required to become a doctor or nurse are staggering. The R&D for a new drug is tremendous. However, to address the healthcare ‘crisis’ in this country we need to step back and look to the individual and ask the questions of how we can establish as system that aligns the incentives/ motivation for all parties involved. This alignment will also require the involvement from the individual patient to shed the concept that healthcare is an indemnity and be freed of the concept that the government or some other third party planning authority knows what is best for them and their families, which may require that planning for healthcare expenditures become part of the financial planning process. We are told that nobody should pay for healthcare because it is a right as told by the propaganda coming from the left but the inefficiencies associated with a central planning authority will create a situation through increased taxation where we will all pay for it ten fold and receive very little if anything in return.
www.doctorpricing.com
www.wcshort.com
In theory, socialized medicine or rather a socialized system of government really sounds like a great idea; “everybody will live in harmony and work not for themselves but will work for the greater good.” However, what socialists always seem to forget is that people need incentive to perform. Incentive can take on many forms and does not always have to been tied to a monetary reward; however, money is a great way to package a financially incentive into nice little crisp pieces of paper. The very basis of socialism says that a central planning authority will have the best interests of the collective because the individual only thinks of what is best for the individual; therefore, a socialistic system is more ‘fair.’ The word ‘fair’ is a superficial word that means a lot in terms compromise but very little in practice. For example, in professional sports we are willing to pay athletes based on their skill in a particular sport and by the very nature of randomness, or natural selection, some people are better suited for say basketball then others. An individual that is 6’10 is undoubtedly going to have an advantage over a 5’10 individual, holding everything else equal, in terms of being closer to the 10 foot rim and on average having a greater chance at being successful at the game. Therefore, is it fair that the 6’10 individual happens to be 6’10 and the 5’10 individual is a foot shorter in a game where height can prove to pay huge dividends? Yes, it is not ‘fair’ a central planning society could make this situation 'fair' by requiring the 6’10 individual to play on his knees but would anyone want to pay money to come see two guys play basketball with one guy playing on his knees? Of course, when it comes to professional sports the market is willing to pay copious amounts of money for individuals to play a game, which I am all for as long as the market will allow for such pay checks. Since the paying public wants to see a competitive product the professional sports world is extremely competitive and only the best make it with no regard to what is’ fair.’ A ‘fair’ solution would be extremely boring to watch because you would have to obviously create a situation where anybody and everybody had the opportunity to play leaving very little incentive for individuals to dedicate their lives to the athletic endeavor beyond just a love for the game. In conclusion, life is not ‘fair.’ As a society we need to create an environment where the drive of the individual has only the limits that the individual places on him/herself. The 5’10 individual might not be as tall as the 6’10 individual but through hard work and potential sacrifice he might be able to be more successful then the 6’10 individual in the game of basketball. Individuals need incentive to excel, to improve, and to produce.
An analogy between professional sports and healthcare in the United States may seem like far distant subjects; however, they both share a universal truth: incentive drives behavior. I am happy that Elizabeth Edwards was able to win her battle with breast cancer but I am afraid she is very shortsighted in her endorsement of the HilaryCare Universal Healthcare. Why is it that the United States is the undisputed leader when comes to cancer treatment including the treatment of breast cancer? Why have advancements in medicine predominately evolved out of this country? The answer lies in the very framework of this country’s affiliation with capitalism. The inherit beauty of capitalism is that it aligns the incentives of the individual to produce and when more goods and services are produced more can be distributed. Therefore, Mrs. Edwards was able to win her battle against cancer because thousand of individuals over the years had the incentive to devote their lives to help find treatments for an otherwise deadly disease. The universal coverage that she speaks of may deliver coverage for all but will only produce limiting care, and certainly not the level of care she received, because the same incentives do not exist in socialized systems as they do in capitalistic settings where the individuals not an ‘all knowing’ central planning authority can make decisions based on behavioral stimulation stemming from the motivations/ incentives that drive them. For example, a very good friend of mine grew up in Israeli where they have a socialized national healthcare plan. My friend’s mother even thou she was ‘covered’ under the national plan was not able to receive the needed care and died from the very same disease that Mrs. Edwards defeated and it was not because treatment options were not available at the time of her death but rather the system could not deliver to his mother the needed timeframes/ resources required to save her life.
Healthcare is a touchy subject to discuss because you cannot discuss healthcare without talking about people’s lives but it is a fact that the great advancements that this country has spearheaded is correlated to the work of countless individuals that dedicated their lives to discovering new medical advancements. The individuals dedicated their lives to medicine because they wanted to make a difference but assuming that they would do it gratis is a huge miscalculation; these individuals, as would anyone, should be able ‘to do well by doing good.’ Modern Medicine is very expense. The resources required to become a doctor or nurse are staggering. The R&D for a new drug is tremendous. However, to address the healthcare ‘crisis’ in this country we need to step back and look to the individual and ask the questions of how we can establish as system that aligns the incentives/ motivation for all parties involved. This alignment will also require the involvement from the individual patient to shed the concept that healthcare is an indemnity and be freed of the concept that the government or some other third party planning authority knows what is best for them and their families, which may require that planning for healthcare expenditures become part of the financial planning process. We are told that nobody should pay for healthcare because it is a right as told by the propaganda coming from the left but the inefficiencies associated with a central planning authority will create a situation through increased taxation where we will all pay for it ten fold and receive very little if anything in return.
www.doctorpricing.com
www.wcshort.com
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