“The Private Market is in a Death Spiral”

Now they tell us!  Earlier this week, Health and Human Services Secretary Kathleen Sebelius acknowledged that the private health insurance market is “in a death spiral.”  Take a look at the video and tell me if she seems at all upset by this development, which releases President Obama from his pre-Affodable Care Act promise, “If you like your health care plan, you can keep your health care plan.”  

As I pointed out in a

  1. Nick Stuart

    Obamacare delenda est.From your lips to God’s ear.My prediction: even if we get a filibuster -proof majority in the Senate, House majority, and the White House, the GOP will lack the moral courage to repeal.

  2. Mel Foil

    That’s like saying, “yes, we hit him over the head with a chair, but he was going to come down with a concussion anyway, so it has nothing to do with us.”

  3. DocJay

     You could not be more correct here.  The goal is to have single payer only through the destruction of the current system and prevention of any other systems  from being implemented. 

    [Edited to remove all caps, per CoC]

  4. Valiuth

    Let’s be honest here did we really have a free market for healthcare , before Obamacare? No, we had the half breed mule that took the worst features of a free market and the worst features of a Socialized system. No one will do what really needs to be done which is just level the whole industry and force it to start up again from scratch in an open market with few demands and restriction, and only one set of rules for the whole nation. The republicans aren’t going to want to do this, alas. 

  5. Mendel

    Actually, I agree that the private healthcare market was going downhill before Obama came into office.  And how could it not be?  Between skewed tax incentives for employers but not employees, antitrust exemptions, micromanaging on the state level, and an huge, bloated, underfunded government competitor (Medicare), the private healthcare “market” in America has been a farce for years.

    DocJay had a great post a few days ago pointing out how frightened Republicans are about discussing healthcare reform.  This reticence has left the right embracing the status quo as their default position, instead of admitting that our current system is broken and championing market liberalization as the only sustainable solution.

    To keep with the medical theme, it’s as though a patient has come to the ER with a tib/fib fracture.  The liberal doctor wants to amputate at the hip and replace the leg with some newfangled prosthetic, while the conservative doctor is quietly muttering “man up and walk it off.”  Just because we don’t agree with the solution doesn’t mean we can’t acknowledge that there is a problem.

  6. Mendel
    Valiuth: Let’s be honest here did we really have a free market for healthcare , before Obamacare? No, we had the half breed mule that took the worst features of a free market and the worst features of a Socialized system. No one will do what really needs to be done which is just level the whole industry and force it to start up again from scratch in an open market with few demands and restriction, and only one set of rules for the whole nation. The republicans aren’t going to want to do this, alas.  · 7 minutes ago

    Dang it, you beat me to it.  And written much more succintly to boot.

  7. George Savage
    C
    Valiuth: Let’s be honest here did we really have a free market for healthcare , before Obamacare? No, we had the half breed mule that took the worst features of a free market and the worst features of a Socialized system. · 5 minutes ago

    Absolutely correct.  The left has been working to sabotage the free market in healthcare for 80-plus years in order to build upon its grave a utopian–and politically valuable–single-payer system.  However, the private market has proven resilient enough to survive past “reforms.”  Not so Obamacare, which is why the left was willing to pass the bill in the teeth of overwhelming public disapproval.  Once the market is truly dead it will be well nigh impossible to resuscitate.

  8. DocJay

    Valiuth , of course our system is flawed.  I sat on the GOP sponsored Physicians Council for Responsible Reform and plenty of great ideas were bandied about.  Goal one was to repeal obamacare and goal two was to correct the current system.  

    The GOP has been lacking in addressing the problems but there has been more effort and thought in to this problem recently.

    [PDF] 

    PCRR QUARTERLY CONSULTANTS’ MEETING
  9. Mendel
    DocJay:

    The GOP has been lacking in addressing the problems but there has been more effort and thought in to this problem recently.

    Now that it’s too late.  Great job, GOP!

  10. George Savage
    C
    Mendel

    DocJay:

    The GOP has been lacking in addressing the problems but there has been more effort and thought in to this problem recently.

    Now that it’s too late.  Great job, GOP! · 4 minutes ago

    Not too late yet.  But we have to win the presidency, hold the House and take control of the Senate in November.

  11. Tenther
    George Savage

    Absolutely correct.  The left has been working to sabotage the free market in healthcare for 80-plus years in order to build upon its grave a utopian–and politically valuable–single-payer system. 

    This is exactly what Hayek describes in “The Road to Serfdom.” The state institutes “modest” restrictions or distortions on the market. The problems those cause are then used to justify further distortions. The process is repeated until it leads to a complete takeover by the state. As Glenn Reynolds says, some people use “The Road to Serfdom” as how-to manual.

  12. Mendel
    George Savage

     However, the private market has proven resilient enough to survive past “reforms.”  Not so Obamacare, which is why the left was willing to pass the bill in the teeth of overwhelming public disapproval.  Once the market is truly dead it will be well nigh impossible to resuscitate.

    I recall that there was quite a bit of closed-door negotiating between the Obama administration and the major health insurers/providers before the drafting of Obamacare, with the result that the industry came onboard with the proposed changes.  I wonder if enough promises of bakshish were made to the healthcare industry that it now has a strong stake in government-controlled healthcare and would fight against any market deregulation.

    Valiuth may be correct that the best theoretical option would be to raze the entire field, including the existing health insurers, and start from scratch. 

  13. George Savage
    C
    Mendel  Valiuth may be correct that the best theoretical option would be to raze the entire field, including the existing health insurers, and start from scratch.  ·

    Conservatives should never raze everything and start from scratch.  That sort of utopian engineering is the province of the Left–doesn’t it work great?  We should take what we have and make meaningful, liberty-enhancing reforms.  Then, over time, the forces of creative destruction will gradually but predictably improve our healthcare system, just as most other less-molested industries have improved with time.

  14. DocJay
    George Savage

    Mendel  Valiuth may be correct that the best theoretical option would be to raze the entire field, including the existing health insurers, and start from scratch.  ·

    Conservatives should never raze everything and start from scratch.  That sort of utopian engineering is the province of the Left–doesn’t it work great?  We should take what we have and make meaningful, liberty-enhancing reforms.  Then, over time, the forces of creative destruction will gradually but predictably improve our healthcare system, just as most other less-molested industries have improved with time. · 1 minute ago

    Correct again.  This was the premise at PCRR when beating obamacare was not the topic.

  15. Valiuth
    Mendel:  The liberal doctor wants to amputate at the hip and replace the leg with some newfangled prosthetic, while the conservative doctor is quietly muttering “man up and walk it off.”  Just because we don’t agree with the solution doesn’t mean we can’t acknowledge that there is a problem. · 42 minutes ago

    This comment made me laugh so hard…It reminds me of  G.K. Chesterton’s description of a progressive and a conservative.

    “The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected.

    Not much has changed in 100 years. 

  16. Mendel
    George Savage

    Mendel

    Conservatives should never raze everything and start from scratch.  That sort of utopian engineering is the province of the Left–doesn’t it work great? 

    Always true – point taken.

    George Savage

    We should take what we have and make meaningful, liberty-enhancing reforms.  Then, over time, the forces of creative destruction will gradually but predictably improve our healthcare system, just as most other less-molested industries have improved with time.

    Realistically speaking, this is the only way forward.

    However, we shouldn’t forget that Obamacare would have provided a potential windfall to several already powerful interests, such as the pharmaceutical and medical device industries (Dr. Savage please correct me if this is wrong), whereas opening the market will likely result in these same sectors seeing lower profit margins.  As so often, the fiercest resistance to market liberalization may come from the existing players, not the general public.

  17. Valiuth

    I think that our health care system is so calcified that any significant change will have the effect of killing it all off. It is a house of cards build on sand. If we wipe away all the needless rules and create an open market it will wash everything away. The GOP wants some sort of gradual method of doing this, but I don’t think this is possible. A gradual let down requires effort over time, and the one thing I know about politicians is they have no ability for sustained resolution and courage…

  18. George Savage
    C
    Mendel  As so often, the fiercest resistance to market liberalization may come from the existing players, not the general public. · 6 minutes ago

    Mendel, it depends upon where you sit in the industry.  For the top firms, you are essentially correct:  add a few lawyers to the staff, beef up the political contributions and you’ll be fine; and single-payer provides a one-stop-shop for the marketing department.  But this remains a disaster for entrepreneurial upstarts and even the also-rans amongst established companies.  Regulatory lock-in eliminates the opportunity for the sort of disruptive advances that we have come to expect from the computer industry, which unsurprisingly is about the least regulated business left.

  19. Valiuth
    Mendel

    However, we shouldn’t forget that Obamacare would have provided a potential windfall to several already powerful interests, such as the pharmaceutical and medical device industries (Dr. Savage please correct me if this is wrong), whereas opening the market will likely result in these same sectors seeing lower profit margins.  As so often, the fiercest resistance to market liberalization may come from the existing players, not the general public. · 10 minutes ago

    You come to the greatest problem Free Markets have, which is that Free Markets are bad for established interests, which is why these interests always move to abolish free markets when they reach a comfortable position. 

  20. Midget Faded Rattlesnake
    Mendel:

    To keep with the medical theme, it’s as though a patient has come to the ER with a tib/fib fracture.  The liberal doctor wants to amputate at the hip and replace the leg with some newfangled prosthetic, while the conservative doctor is quietly muttering “man up and walk it off.”  Just because we don’t agree with the solution doesn’t mean we can’t acknowledge that there is a problem.

    But I think many conservatives do acknowledge the problem.

    Just, conservative reforms would take us in the opposite direction of progressive reforms, so Republican politicians, in the fine spirit of compromise, agree to do nothing or to coopt progressive reforms for themselves.

    I’m exaggerating slightly. Some politicians do come out in favor of real market-based reforms, but Republicans as a group seem to lack the bottle to follow through on them.

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